Vehicle registration fee to rise by 59%; some car dealers doubtful hike will affect sales

SINGAPORE: Vehicle registration fees are set to rise by 59 per cent from Dec 19, but some car dealers say the hike will not have a large impact on sales.

The fee, which is payable for every new vehicle registered for use in Singapore, will increase to S$350.

This is according to a circular issued by the Land Transport Authority (LTA) on Monday (Dec 5) to motor dealers and importers, as well as electronic service agents.   

Priced at S$220 currently, this adjustment is the steepest revision among the 25 services listed in the LTA notice that will undergo fee increments. 

These services include vehicle registration and its accompanying processing fee, vehicle type approvals, vehicle accessory approval and certificate of entitlement (COE) transfers. 

Most of the other fees will increase by between 10 and 25 per cent. 

"WON'T AFFECT MUCH"

The fee revisions come amid rising COE premiums, with Category A cars reaching a near 10-year high of S$90,589 in November's final bidding exercise.

The Category A premium has since dipped to S$88,503 in the latest bidding exercise on Dec 7.

The adjusted registration fee is about 0.2 per cent the average cost of a Category A car, an LTA spokesperson told CNA. 

LTA said the fee increase across the 25 services was because "LTA performs various vehicle-related services, and fees are charged for cost recovery".

"Many of these fees have remained unchanged since 2017, or earlier, while operational requirements, such as enhancing data security measures, have increased," added LTA.

"The fees are adjusted based on the administrative costs of providing these services to vehicle owners/users."

Managing director of ACM Automobiles, Arthur Wong, was quick to refute the suggestion of passing on the added costs to his customers. 

"It's not much, only over S$100. It won't affect me much," he said. 

Similarly, Mr Aaron Tan, co-founder of online car marketplace Carro, believed the increased fees would not affect immediate demand across the industry, although more observation is needed to pinpoint longer-term effects. 

"The amount is too small compared to a new car in Singapore. S$300 is not going to matter too much. Whether it's a used car or not, it's a small percentage; from that percentage standpoint, it's not going to change anything," said Mr Tan.

"The fee revision won't affect the demand. The people who are going to buy a vehicle anyway would not be deterred by the fee increase."  

A driver who spoke to CNA said the increase in vehicle registration fee was "insignificant". 

"The figure is insignificant compared to other things when the salesman shows you the price. It doesn't matter," said the man, adding that he has been driving for almost 40 years. 

"Percentage-wise, it is big, but it's a small amount," said the 65-year-old who declined to be identified. 

He added that he has not decided whether to buy a new car when his current COE expires. 

"There are people who pay to retain their licence plate on a new car, and even pay about S$1,000 to transfer their number plate to a secondhand car. So what is an extra S$100?"