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Car Insurance in Singapore Explained

Drive a car in Singapore, Own a car in Singapore

Car Insurance in Singapore

If you own a car in Singapore, you must have car insurance. It's not just a legal requirement; it's also a smart way to protect yourself and your car from unexpected accidents and damages.

But with so many different car insurance policies available, choosing the right one for your needs can be confusing. In this article, we'll explain everything you need to know about car insurance in Singapore.

What is Car Insurance in Singapore?

Car insurance is a type of insurance that protects you financially in the event of an accident. If you are involved in an accident, your car insurance policy will pay for the damages to your car, as well as the damages to other people's property and injuries to other people.

Car insurance can also help you pay for your medical expenses if you are injured in an accident.

Car insurance is important because it protects you from financial ruin in the event of an accident.

Even if you are not at fault in an accident, you could still be responsible for paying for the damages to other people's property and injuries to other people. If you do not have car insurance, you could be forced to pay for these costs out of your own pocket, which could be very expensive.

Types of Car Insurance Policies in Singapore

There are three main types of car insurance policies in Singapore:

  1. Third-party only (TPO) insurance,
  2. Third-party, fire and theft (TPFT) insurance, and
  3. Comprehensive insurance.

Third-Party Only (TPO) Insurance

TPO insurance is the most basic type of car insurance in Singapore.

It only covers damage or injury caused to other people or property by your car. This means that if you get into an accident and you are at fault, your insurance company will only pay for the damage or … Read the rest

Understand COE Price by 10 Simple Questions

Drive a car in Singapore, Own a car in Singapore

COE price history

If you plan to buy a car (even a pre-owned car) in Singapore, you cannot avoid the COE (Certificate of Entitlement). It is part of the car price you have to pay. But many people find it hard to understand the COE price, as shown above.

So, instead of a lengthy explanation which usually causes more confusion, I think these 10 questions can help you understand COE price fluctuations easily.

Is COE an investment or a disposable product?

COE (Certificate of Entitlement)  is definitely NOT an investment, although the price fluctuates as stocks do.

The value of your COE depreciates from the day you register the car.  Each day, you lose about 0.027% of the COE price you paid. Every COE shares the same depreciation rate, but not the absolute value, obviously. So, some car owners lose more money each day than others.

For example, if you get the COE at the price of $30000, you will lose $8.1 every day. If you got it at $60000, congratulations, you lose about $16.2 per day.

After 10 years, the value of all COEs, regardless of your cost of getting the COE, will be $0.

So, COE is not an investment.

In fact, COE is a disposable product:

  • It can only be used for up to 10 years.
  • It can only be used once.

Can I buy a second-hand COE?

One COE can and MUST be tied to one car only.  In other words, once used, the COE becomes an essential part of the vehicle.

So, you cannot sell a COE without selling the car. Similarly, you cannot buy a second-hand COE without purchasing the car.

For this reason, there is a market for second-hand cars in Singapore. But there is no market for second-hand COEs.

An imported second-hand car needs … Read the rest

Why are cars in Singapore so expensive?

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The breakdown of the car cost in Singapore

According to the Worldwide Cost of Living Report 2018 by the Economist Intelligence Unit, Singapore has held the title of the most expensive city for the fifth straight year since 2014. The top factor contributing to Singapore's ranking is the cost of car ownership.

Singapore is the most expensive place in the world to buy a car (and maintain a car), thanks to its successful car control policy. When you plan to buy a car, it is important to understand the breakdown of the car price you have to pay. If you are a foreigner and hold a foreign driving license, you need to convert your foreign driving license to Singapore driving license after 12 months.

As a highly populated city-state, Singapore cannot afford a massive traffic jam. So the government invested billions of dollars each year in the public transportation system to make it affordable, reliable (decreasing in recent years), accessible and efficient.

For car ownership, the Singapore government fabricated a complicated, fair, and effective car regulation system. Since 1990, the Certificate of Entitlement (COE),  complemented with tax and duties, has been introduced (and tweaked) to regulate the demand, and Electronic Road Pricing (ERP) to regulate road usage.

Today, when you pay the “purchase price” to the car dealer, less than 25% of the price is the actual car value. In simple words, for the same money you paid, you probably can buy 3-4 identical cars in the US.

So, why a car in Singapore is so expensive?

When you buy a car, you are not paying only for the car. The purchase also includes at least the following 10 items:

  • COE (you can bid one for yourself, but most dealers will mark up the car price);
  • Open Market Value (OMV);
  • Additional Registration Fee (ARF);
  • Excise
… Read the rest

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