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Cars in Singapore to become a greater luxury

While everyone was harping on the high Certificate of Entitlement (COE) prices, another spanner was thrown into the works with the recent announcements regarding cars.

 First, the Monetary Authority of Singapore (MAS) has limited funds for road vehicles. Buying a car now requires a down payment of 40 to 50 percent of the purchase price of the car in cash, including applicable taxes. In addition, the term of loans has changed to five years instead of ten. These changes apply to both new and used cars, but not for motorcycles and trucks.

During the budget speech, it was also announced that there will now be a tiered tax rate for passenger cars. Instead of all cars paying the same main vehicle tax (or known as additional registration fee or ARF) at a flat rate of 100 per cent of the car’s open market value (OMV), more A tire For example, a Mercedes-Benz E250 which has an OMV of above $50,000 will need to pay 180 per cent of incremental OMV.

These cooling measures make car ownership even tougher for the average Singaporean.

And not to forget that there is the Carbon-based Emissions Vehicle Scheme (CEVS) that will start imposing penalties for cars emitting above a certain level of carbon dioxide from July onwards.

MAS said its motor vehicle loan limits means “to promote financial prudence car buyers,” so people do not end up in the expansion itself, but some people believe that there is a social and commercial implications of this. These measures will only widen the gap between rich and poor.

People will be forced to rethink their priorities and the only one who can actually afford a car will be able to do it now.

Indeed, the most affected will be people who really need a car, such as children, the elderly or those who need a car for their business. Companies may be forced to receive commercial vehicles and people may have to start spanking their EZ-Link card more often.

Rental shop will also suffer, because these measures were so hard that left the industry players scrambling for the next few days.

COE bidding for the months of March and April have been revised to allow consumers and the motor industry more time to adjust to the changes. With the demand for cars down, COE premiums might drop. Hopefully in the long run, the COE prices will be brought down and help offset car prices.