Drive In Singapore

ERP

Singapore ERP (Electronic Road Pricing): 6 Facts You Need to Know

Drive a car in Singapore, Own a car in Singapore

Singapore ERP (Electronic Road Pricing)

Singapore is renowned for its innovative and efficient transportation system, and electronic road pricing (ERP) is one of the key components that make it work.

ERP is a system that charges drivers for using congested roads during peak hours, with the aim of reducing traffic congestion and improving overall road efficiency.

As a driver in Singapore, understanding the ERP system is integral to navigating the city's roadways effectively, avoiding fines, and saving time.

This driving in Singapore guide aims to provide a concise guide to the top 6 facts you need to know about electronic road pricing in Singapore. We will explore the role of ERP, how it works, and the various ways you can pay for it. Additionally, we will discuss frequently asked questions about the system, such as the fines for non-compliance.

1. ERP is an electronic toll system, not a tax.

Electronic Road Pricing (ERP) is a sophisticated electronic toll system introduced in Singapore in 1998 with the aim of reducing road congestion during peak hours. This system does not replace the traditional road tax, but instead charges road users a fee (currently from $0.5 to $6.0 per gantry) based on the electronic gantries they drive through and the time of day. So, the ERP system is designed to encourage drivers to avoid congested areas during peak hours, thus reducing traffic and improving travel times for arterial roads and expressways.

The ERP charges are automatically deducted from an in-vehicle unit (IU) that is installed in the vehicle, making it a seamless process for road users. ERP charges are reviewed and adjusted periodically based on the traffic conditions around individual gantries.

ERP has been successful in managing the traffic flow in the city-state and has since been expanded to cover more arterial roads and expressways, making it part … 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?

Own a car in Singapore

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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