Wednesday, July 20, 2011
So you want to buy an automobile...
For those of you in the U.S. and other locales complaining about the prices of fuel, the cost of an automobile, etc. take a look at this. The Singapore LTA (Land Transport Authority) just released the recent premiums for a COE (Certificate Of Entitlement). Yikes!
Singapore, being a small and densely populated city-state, cannot really accommodate a large fleet of autos traveling on its roads and filling its car parks, so it has adopted policies to encourage use of public transportation, and discourage private auto ownership. A quota system controls the number of autos in the city. It also makes a nice revenue stream for the government. The discouragement part of the strategy is apparently not working.
In order to purchase a vehicle, you must acquire a COE. This entitles you the privilege to buy and own a vehicle. A quota is established each year for the number of COEs to be issued, and it is necessary to pay the bid for one. A COE is good for 10 years, after which you must must export (sell) or scrap the vehicle, or purchase a new COE for the auto. With a limited supply, and an ever increasing demand (ask any taxi driver-- the roads are "getting worse", even with the controlled increase in autos) the COE prices continue to rise. The most recent prices were published in the news today (shown above). Note that this is the price for the COE-- in addition you would still need to purchase the automobile, and license it.
There is a growing demand for Category B COEs (1600cc and above engines). Category A includes small cars and all taxis (1600cc or less). There are a significant number of luxury cars here-- BMWs are very popular, as are Mercedes Benz. It is not uncommon to see Lamborghini's, Maseratis, and an occasional Ferrari. If you are going to pay a fortune to own a car (and you have the fortune to do so), you may as well own a nice one.
If you are whining about paying US$4.00 per gallon fuel in the U.S., be enlightened that fuel prices nearly everywhere else in the world are much higher. Singapore gasoline is currently about SG$2.00 per litre, which equates to about US$6.06 per gallon. Fuel is cheaper in Malaysia, just over the bridge. However, to leave Singapore you must demonstrate that your auto fuel tank is 3/4 full or more, or suffer punishment of a fine.
It doesn't stop there. Many of the roads have ERP (Electronic Road Pricing). Basically these are toll road areas. Everyone who drives in these areas must have an electronic reader in their vehicle and an account for billing (similar to the electronic toll systems now in use in the U.S.). The ERPs tend to be in the busier areas of the city, discouragement to drive in these congested areas, if possible. The prices vary depending upon the type of vehicle, and the time of day. Shopping centers and office buildings typically have car parks with fees as well (EPS or Electronic Parking System-- do you like the TLAs?).
Contrast that with the subway or bus travel (about SG$0.86 for short ride on the train, SG$0.75 by bus, up from there by distance). It's an outstanding system here! And no parking, insurance, or maintenance worries.