- Credit: VW Image Gallery

Why a VW Polo would cost you more in Singapore than a Porsche in Germany

You will fly out of your socks when you read this!

What makes Singapore unique?

While Monaco citizenship is a dream that only a chosen few can ever turn into reality, Singapore can easily match and even surpass the European principality in luxurious lifestyle. But when it comes to cars, thing couldn't be more different. So why is that?

While considerably bigger in are than Monaco (the second smallest country), most of Singapore's area is spread between islands, leaving a small piece of mainland, where most of the population is living. And while the mainland is still bigger than Monaco, the population of Singapore is measured in the millions, without counting the tourists. It is very densely populated piece of land, which leads to some peculiar tax laws for cars.

Credit: Royal Caribbean

Credit: Royal Caribbean

Buying and maintaining a vehicle in Singapore is an expensive luxury due to limited road space. The mainland of Singapore measures just 50 km from east to west and 27 km from north to south. The population currently stands at around 5.7 million people, unlike Monaco's permanent population of around 40 000! It's no surprise that Singapore’s road density is much higher than most other countries. There is 493.5km of road per 100 km2 which makes it nearly 50-times higher than sparsely-populated Australia.

The roads occupy 12% of Singapore’s land area, compared to 14% for housing. This is insane! The number of cars per kilometre of road is much higher in Singapore too at 278 vehicles per square km. About 14-times Australia’s figure! Being a small city state means the number of vehicles per 1000 population is much lower than many large, car-reliant countries at 162.5, or compared to 805 in the United States. And here's why.

Credit: Flickr

Credit: Flickr

Taxation for . . area preservation

Let's start listing all the piles of money you have to pay in Singapore in order to own and drive a car. The very first thing is the Original Market Value (OMV for short) which is basically the price of the car before any taxes and fees. For a base trim VW Polo that's just around $13 432. So far - so good, but this is where things start to get expensive.

Excise Duty is the first tax to hit your wallet and it's 20% of OMV. For the Polo, that duty will be $2684. Then comes the Goods and Services Tax (GST for short), which is only 7%, but it's taxed on the OMV + Excise Duty! Basically paying a tax for your tax. This is $1127.50 out of your pocket. And that pocket better be mighty deep, because that's just the start!

The real sense of getting poor comes with the Additional Registration Fee (ARF for short). This one is depending on the price of your car as follows:

Up to $20 000 the ARF is 100% of the OMV

From $20 001 to $50 000 ARF equals 140% of the incremental OMV

Anything above $50 000 means 180% of the incremental OMV

So a base trim VW Polo fits in the lowest category and you just have to pay ARF like you're buying another Polo - $13 432. And options are taxed the same way as well, so you can forget those electric mirrors and learn to move them with your arms. By now this car costs $30 658. And that's it! But owning and driving your car in Singapore are two completely different things.

To do that, you need to obtain a Certificate of Entitlement. This will allow you to drive your car for up to 10 years. It's not a driving license, but rather a car permit. It has multiple categories and can vary wildly, depending on the engine displacement and power. Fancy a new Porsche Taycan Turbo S? Better stick to that 1.0 TFSI VW! Being that it fit in the smallest category, the small Polo will only set you back around $48 000!!! It's a piece of paper that is worth more than the actual car!!! By now this GOLDEN (as it seems) VW Polo would cost you around $78 600 (USD)!!! You want the bill for that shiny new Taycan? It goes just north of $600 000...

Credit: The Singapore Beacon

Credit: The Singapore Beacon

It seems absolutely insane, but taking into account the mentioned above population density and the lack of land area - it's a necessary evil. Although it's not entirely fair for the consumer to pay that price. People in Singapore are (mostly) not poor and they pay it to own and drive a vehicle. Probably nothing fully specced out, which in Germany won't cost you an arm and a leg, like a base trim Polo in Singapore, but people don't skip on mobility.

Do you know any place in the world with worse car taxes?

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Comments (56)

  • Didn’t realize Singapore was that expensive

      1 month ago
  • Cool article! I'm frm singapore and this is true. Don't have a lot of classic cars cos of the 10 yrs limit but it's quite a good place for super car spotting :)

      1 month ago
  • I live Singapore

      1 month ago
    • First hand information is the best! You are DT's eyes and ears on the ground in Singapore. If you feel up to it please do a post about Singapore and the driving scene as you live it. That would be incredibly interesting. I love to know how the rest...

      Read more
        1 month ago
    • Thank you

        1 month ago
  • Yeah I’m not moving to Singapore. It is so dumb why there are so many import taxes all over the world.

      1 month ago
    • import taxes is to protect a country's homegrown industry from foreign competitors. Not saying its good or bad, but its there thanks to our habits of drawing lines on the world map.

        30 days ago
    • They are just to large. They should be that you have to pay 1k usd to import a car, not these astronomical amounts.

        30 days ago
  • Not a car-centric country. The US has lots of distances to cover especially with suburban sprawl. It's a serious haul to go from one side to the other in the US. I could probably cross 13 countries in Europe in less time. That's why the US has such a car oriented culture. It's a necessary evil. Singapore is not a large nation and very congested. Simple - remove the cars. Bikes work just fine in that instance.

    I'm in a small city in southwest Virginia. To get around the belt loop on the interstate takes 20 minutes. That's at 55mph ish. You can't walk it. You can't ride it on a bike. There's no bus that goes all the way to the other end. You can drive or Uber. And this is a small place here. I've lived in Denver and Columbus, Ohio which are much larger and spread out. I've lived in the DC area which is outright insane. I won't live in LA but I have been on the 405 at rush hour. In that instance you can get out and walk faster at times. But that's and even different US problem. Same with DC. Cleveland and Dallas are other fun ones. Cleveland is actually one of the largest US cities in terms of area. If you add in the surrounding towns that are part of Cleveland it's geographically enormous. Plus Dead Man's Curve. Cars. Can't live with out them in the US. If you don't have one you better live where the public transportation is good. Singapore? They have a very different situation.

      1 month ago
    • Correction. Singapore has little to none congestion even with many cars around. Most people in Singapore are fairly well off and will even be able to afford a Lamborghini Aventador SV which cost about Β£800,000 in Singapore.

        1 month ago
    • Very little people bike to work since public transportation is very efficient and clean anyway

        1 month ago
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