Why Are Cars in Singapore So Flippin' Expensive?!

Welcome to another episode of Tell You First! So Darren, what are some things to import anything like expensive? I mean housing is expensive, food is getting more expensive, I mean cars, I was also very expensive. That's what we're known for. We are talking about cars today. You know growing up, what was your thought of cars? What do you see cars? I mean, Salimot atas kind of like transport, right? You would get your public transport, which was nice and efficient, but in Singapore's weather is so hot to get from point A to point B without sweating, we need to be a car. You see it's something quite, quite emotional. Yeah, that's pretty emotional. And I mean, like, you know, preparing for these cars, just understanding the situation of car prices right now. So I think the history is, the stuff I never knew about the whole car thing. And also they are very simple principles that I think govern the whole car pricing system in Singapore. Because I mean, it's a hot topic, because I think the past few years, the COE prices have been going crazy. Last year, 2023 was the first time it hit the record high. I mean, it was record, increasing was six straight times. And the COE for large cars hit a record high of 150 K. 150 K for a COE. Yeah, yeah. So since then, it has come down. But I think that was one of the things that made people go like, oh, shit, like, how is it going to be going forward? Right. And it just caused a lot of talk. And I mean, it's the fact that I hope people view cars also, the new cars, but when you go forward, even the simple things like, why is it so expensive? Like, everybody knows the COE. I've asked you, right, can you name like three other components or four other components of buying a car, a car price? You mean like what costs, what, actually costs people? Because I mean, there's a car value, right? Yeah. And that is the market value. But everything else at least to the sky high prices, do you know? Are you talking about the road tax or other things? Yeah. All other things. Yeah, just like road tax. I mean, obviously the cost of petrol. No, even before you, feel it with petrol use. Yeah, even before you feel it with petrol. I do maintenance of the vehicle. Orible answers. Okay. Orible answers. So you're saying maintenance. Yeah. So there's the original car value. There's maintenance and COE at least 250,000, 200 plus thousand. Yeah, yeah, yeah. No, no, there's a lot more to it. And like, why, because you know, car prices are a very sticky thing in Singapore. Like, even before I prepared for this podcast, I wasn't aware of the different pillars. Why do you think people don't know? I think, yeah, like you said, it's so aspirational and prices have gone up astronomically high. Yeah. And so, you know, I think it's a lot more than just the same thing. But I think it's a lot more than just the same thing. It's still cheaper. It's still cheaper to take a private hire. But then you also see so many cars on the road, new cars that make you wonder who are these people affording it. So, basically, just high level summary from the time there's the car value, right? Which is called the original market value. That is the additional registration fee, which is the ARF. Then there is the ARF. The ARF, which can go up pretty significantly. So, the ARF, it is, and these are all the cars, right? So, the ARF is a form of tax imposed on all cars during registration. And it's a percentage of the OMV. So, there's going to be a lot of acronyms. So, OMV is like the value of, you know, when you bring it in. So, for example, in 2024, Honda Civic has an OMV of about 25K. So, most other countries, the eventual car price is just higher than that plus the dealer, margins and all that kind of stuff. But the end price of this Honda Civic in particular will be 175K. Wow, 25,000 to 175K. So, how it gets there is the additional registration fee. So, I mean, the calculation for this is really like studying what exam. It's similar to, you know, the whole HDB model. There's so many different calculations, right? Because the ARF is also not a set percentage. There's the first 20,000, the next 20,000, the next 20,000 and it's different percentages. So, then there's the excise duty and GST. So, excise duty basically certain goods in Singapore have certain taxes. Like alcohol, cigarettes and petrol and it's not applicable to everything. So, cars have a specific excise duty. Then, of course, there's GST, which has also been increasing. So, that adds a bit more. Then, there's the COE and then there's the vehicular emission scheme, rebate or so-charge. So, this one kind of depends on your car emissions. Which is why buying electric car might, this might cost lower. But if it's a higher engine capacity, you know, this also goes up high. So, you get a small car lower, one of those biggest cars, higher. Then, there is of course the local dealer margins for cars in Singapore. So, once you add all that, then it comes to about 175,000. And that's kind of crazy for people. Because I remember back when I was studying in the US and everything, you could buy a second-hand car for four figures, low four figures. And then it would be a piece of junk, but it still did the same job. Getting it from pointing to point B. Whereas in Singapore, what you're saying is there's almost. Even if you buy the cheapest model of the car you can find, you still end up rising to somewhere in the six-figure range. And I think because we both grew up in the 80s, right? So, that's where the history of the car pricing and COE gets a little interesting. Because there were certain things there from the 90s onwards, change the damn game. So, I mean, even before that, just to give you a history of transport in Singapore. So, do you know when the earliest roads were in Singapore? I'm guessing the '60s. But, you thought my modern Singapore? Yeah. When the earliest roads were built in Singapore, well, is it even a record for it? Apparently. I guess after the British came that, right? 1819, 1820. Yeah, so, 1819, 1822. So, Singapore was from the 1819, then there was the Jackson Plan of 1822, which was in line with Stanford Raffles directions. So, there were standard roads, 15-meters wide, 15-meter wide for carriages, and those for horses were four yards wide. 15-meter wide. Yeah. That's pretty wide. Oh, no, sorry. A grid system was adopted. So, the grid system is 15-meters. And for carriages. So, I don't know how narrow the lanes were, but the system for horses were four yards wide. Okay. And this was all, I mean, that was the main mode of transport, like horses, right? Yeah. So, the roads were four horses. Horses, pulling carriages, then there were pedestrian parts. I mean, the measurements here are all in yards. So, pedestrian parts were two yards wide. So, horses were four yards wide. Carriages were 16 yards wide, and that's the grid system. Yeah. So, I mean, yeah, then there were, apparently the roads were advanced for that time, and they were slowly constructed. And they made the campings accessible by 1845. So, the first motocard in Singapore, you know when that was introduced, Terrance? Don't say that's 60s. No, I think it's the late 19th century. Yeah, 1896. Yes. Yeah, 1896. So, that was the gist of it. But I only found out, preparing for this podcast, that the vehicle quota system, right? Was introduced in, do you know where? No, I don't know. Yeah, so the vehicle quota system is essentially the whole system that determines how many cars are in Singapore. And it was only established in 1990. Oh, okay. So, you're talking about like almost a whole century later, after the first motocard introduced. Yeah, and I bring that up because you know growing up in the '80s, when you were young, like you talk about the inspirational dreams of owning a car, right? Yeah, car prices now are crazy compared to what it was when we were growing up. So, that's what I think for the generation of people in the '30s and '40s, there is this, you cannot connect here, like when you were younger, like, oh, it seemed plausible to have a car. But now cars are so out of reach. Because, I mean, right from the onset, there were issues with congestion in Singapore. So, way before the vehicle quota system was launched, there was the area licensing scheme. Have you heard of that? - Tak. - Tak. - Itu seperti yang pertama di YRP. - Okey. Jadi, apa yang berlaku di 1975? Kerana, seperti itu, ada banyak konjusnya dan semua yang berlaku di Singapore. Jadi, ada di CBD, tapi itu adalah bila kamu mempunyai pasis. - Kamu putih di tempat kawal. - Kera-kera, saya tak tahu, saya ingat itu. - Memangkan itu. - Tapi apa kamu ingat? Itu adalah cara saya dan itu akan jadi ini, seperti, hexagonal, sikit. - Ya. - Itu yang berlaku. - Saya rasa, sehingga, kamu harus berkata. - Ya. - Dan itu, yang berlaku di tempat kawal. - Ya. - Bagi kamu untuk berlaku di CBD. - Ya. - Itu yang kamu ingat. Tapi, ada yang kamu lakukan, kamu harus mempunyai di tempat kawal. - Dan kemudian, kamu mempunyai tempat kawal. - Kamu hanya perlu. - Ya. - Ya. - Terus. - Terus. - Terus. - Ya. - Ya. - Dan itu berlaku di CBD. Tapi itu, itu, itu adalah kawal yang berlaku di tempat kawal. - Kawal di CBD. - Ya, itu kawal di CBD. - Kamu ada di CBD. - Kamu ada di CBD. - Kamu ada di Singapore, ada di CBD. - Kamu boleh berlaku di tempat kawal. - Kamu berlaku di tempat kawal. saya, saya keluarga yg. car or something. It changes the way you go about doing things. And of course, of course, it sounds like a first world privilege kind of thing, but it is there. It just makes, okay, running errands, easier visiting family, easier. And then there's the bettable, is it a need or a want? I guess that also comes with where you are at life. Right? Yeah. If you've got, if you're young and you've got no kids and all, definitely, you could easily choose to walk to the bus stop and take the train. It's all quite comfortable. But once you start having, whether it's older parents, to take care of, or a young kid to drag around, that's where having a car, I think for some people, they still see that's like a non-negotiable thing. And that's why maybe they're so appalled by the high prices of cars compared to what it was. Just a year, 20, 30 years ago. Yeah, exactly. And I mean, you hear all these things. Productivity is a big thing in Singapore, right? And productivity, just layperson understanding, is that you make the best use of your time. Even though it's a nice state public transport, you can read, you can think, you can just observe. Having more control on your transport options is also helpful. But even when it comes to just ownership of cars in Singapore, like if you have to guess, right? What percentage of households in Singapore actually own cars at this point in time? I would say maybe 20%. About one-third. One-third, okay. That is three percent. That is three-third. Yeah, it's less than I thought. Okay, what were you expecting? 40 plus. Okay. But it doesn't make sense, like how many households, how many cars on the road? Generally, you don't see terrible traffic in Singapore compared to other countries. You still get traffic jams and all. And I mean, there has been stuff done to kind of like stabilize the COE prices recently. I think last year, and I mean, there's always this debate about private higher vehicles driving up to demand for COE. Because there's a company who has a fleet of cars, you do bid for COE's also. But apparently, it doesn't account for much, like 21% of CAD/ACOE's, 23% of CAD/BCOE's from February to October 2023. So it's still a minority. Most Singaporeans also, the largest driver of demands for COE is not foreigners. Because you know, there's always that discussion. And then the change of the way is calculated, like COE also, they move the average of the registrations in four-proceding quarters instead of only the preceding quarter. You hear that? I'm not sure what it means in detail, but it feels like the measures being taken are all kind of just slight nudges. So after doing all this and talking in, you know, it feels like in Singapore, right? The future, you're on a own a car. It's not going to be a given. Which I mean, in a way is a good thing. That if the public transport and all is wide enough then it's accessible. Yeah, I mean, I remember watching some videos of like the Singapore MRT network when it was first launched. And there's a, they literally had a shot of what the public transport map looked like. It was literally just one line across from left to right in Singapore. And you think about the MRT network today and you know, we still, we still feel like, there's certain parts of they are not served by the train system. But compared to what it was like 40 years ago, like in the 80s that when it was launched. Yeah. It would come a long way, right? And it's harder to, it's hard for people to say, "Hey, our public transport doesn't, doesn't give me enough options to get to where I want." So in some sense, like maybe that also contributes to people thinking that, "Hey, I don't necessarily need to have a car." When I start my family and everything. Yeah. But I mean, you're a driver. Why am I told you, Terrence? Tomorrow was no car. I guess I'll lose a lot of weight. There's one thing for sure. There'll be a lot more walking, a lot more sweating. But yeah, also another consideration is climate change as well. In the sense that, yeah, you have to brave the elements a lot more like, when you go out and take public transport as well. So it is, I'll admit, and my age is a consideration. It's an uncle. It's an uncle. Even half the life expectancy of Singapore. You still have your life to go. But the sun is not relating anytime soon. It's not like that. We're going towards extremes. It's getting hotter. It's getting colder. Then in winter, can you imagine Singapore cars having heaters? Oh, wow. They do that, right? I don't know whether they remove them. Because you don't sometimes they have these in the seats in the countries, right? But Singapore, you don't need to go. After the Akondale, you can go to the heat or hot air. Maybe. But not the heaters in the seat and everything that warm your butt. You're set in cars that warm your butt. Oh, yeah. Those are magical. The toilet seats in Japan. Imagine that when you sit down in your car in the hot and the winter. Winter countries, like the US and Europe. But it's not a standard issue. No, not standard issue. Depends on your car. For Kimi, Singapore, then it goes wrong then in the summer of Singapore, got warm seats. Warm seats. Or if something goes here, wire in car. Yeah, then they're probably not smelly. We kind of smelly. No, and when I'm sweating, if I go in a car, I will sit forward so my back doesn't hit the seat. Oh, yeah. Then it's a hot seat. So you're basically doing a squat in the car. Correct. The seatbelt was all right. The seatbelt presses against the clothes. Yeah, exactly. But you think there's something like primal about the Singaporean, right? That will never stop striving for a car. Yeah, I mean, in some ways, the high price of the car creates a slightly perverse incentive, right? That, oh, it's a status symbol that you can use for the car, right? So human nature, you can't get around it. At the end of the day, they look at the prices. If you've got money to spend, what do you spend it on? And there is something that is of practical use to your family as well, like a car. Yeah, that might actually incentivize people to want to own a car. But the truth is, at this astronomical price, they're not that many people that even with a regular job or that can actually afford a car. And that is the societal problem. Because you think about zero growth, right? Yeah. Okay. So that's one thing. And then you think about the COE if the prices go up. You know, like paying, like even between the different categories where the COE is constant, you get the higher price cars and the lower price cars. The more premium cars, the sports cars and all will always command more. So the percentage of the car that is the COE gets smaller the higher the price goes. So I will assume if you can afford a $700,000 car, a $100,000 COE is less than a dent. Then let's say the car is maybe like 100,000 and the COE is 100,000. Yeah. Right. So then we might just start trending towards only premium cars in Singapore. Because you know Singapore is the second largest exporter of use cars after Japan. Oh, really? Yeah. And that's partly to do with that. We have, I mean, this rules in place for how long it can actually, your COE actually lasts, right? Yeah. So I mean, we even send cars apparently to Trini Dad. No. Trini Dad. Yeah. Really? Because I mean, you have to send cars to like countries that have right hand drive, right? Yes. So it might just be the case where the only cars on the road in Singapore expensive a share. Wow. And that's where it feels like, oh, it might, it might be something primal that people have to deal with. Because there was also this professor, right? Yeah. Who got famous because he used to focus on the concept over 15 minutes city, where within a city everything is accessible by walking or bicycles within 15 minutes. So they are self-contained. And you know, he used to receive like death threats in where he was, he was a professor from South America, I believe. And when he first came up with it, he kind of like, yeah, he used to have a police escort in Argentina because someone literally threatened to cut him into pieces. Like he's been talking about it for a while. He first introduced it at the COP 21 in 2015. His name is Carlos Moreno. And he's kind of received threats around the world. And I mean, he's spoken about it. But I think it goes against the, of course, there were the critics say that you might like result in little enclaves of like high class, low class, you know, but he did also a loot to the fact that it's just something that people are not comfortable with. Not to say like cars are the same as guns. But you know, in countries where gun control is a problem like the US, you get these people who fight against, you know, gun control measures because it's part of the identity. And I don't know whether in Singapore, I won't deny that part of me also feels it. Like I would like to have a car someday. And if to accept that, oh, the future in Singapore, owning a car is going to be damn expensive to the point it might not even make sense. Yeah. Don't know whether it's easy to starmat. Yeah. And don't forget that cars historically, maybe not in Singapore, but in other places like the US cars have represented a milestone in a, in a person's life. Like you learn to drive, I think, right, right after high school, which is like for them is 18. dan itu membantu anda melihatkan kecil untuk menjaga kecil lebih baik dan kembali kecil. Tidak, anda akan berdua di dalam kata-kata yang anda boleh menjaga, dan anda akan menjaga kecil dan kemudian menjaga kecil. Jadi, itu berada di mana anda berdua di dalam kata-kata yang menjaga kecil. ke duni mereka buat kar. Para orang menangka ke like au pulang berkenasa, dan Lah, tersebut ke ministry types bertahan lalu dia beli kita sendiri untuk glo十nya. adakahなるほど ada orang naik yang maju dari kita tidak tulee kelas, di mana orang terlively jadi itu buat orang Ngamikan tetapi itu dia ia vowelsnya dan berdan Rosat ad watinya serasa beradasa dushur muah betul berdasarkan yang yang berlaku. Yang orang akan beri saya. Saya boleh beri saya. Saya rasa saya boleh beri itu. Jadi, orang yang berlaku ini juga saya ada banyak reaksi. Ada orang yang saya beri dengan zero growth. Ada orang yang zero growth, itu yang berlaku, yang penting, saya ada di dalam hidup saya. Dan jangan lupa, seperti. Rotes, sebenarnya menjelaskan terbaik, sangat lupa, terbaik, terbaik, seperti Singapore. Jadi, kalau kita ada keras keras, itu juga bisa berikan kita ada ruang. Dan itu sebenarnya membantu kita membuat other things yang kita findin pertanyaan. Tapi, sampai kita ada kebangan, kebangan, itu yang kita ada. Kita perlu berikan keras keras. Tapi mungkin kawunan akan menjadi kawunan kerana berbuka. -Mungkin. -Puan menjelaskan lain, saya hanya berikan keras. Jadi, awak ada yang baru kembali. Awak ada kembali soal, kembali soal. Jadi, kalau awak ada keras keras, awak ada kembali. Tapi, saya rasa awak ada kembali. Tapi, saya rasa, saya rasa awak ada kembali soal. Jadi, saya rasa lebih baik. Saya rasa, saya rasa. -Kita rasa awak rasa lebih baik. -No, saya rasa saya. I really brought me back to my childhood what you said about Hila? The feeling that a car was like, oh, once you have a family, you know, you have a car, you go invite us. The car, you go invite parking coupons and all. It's like you sort of join the club that, right? For Hiba. Like, oh, it's a pretty exclusive club. And maybe it still something worth joining, but you know, at what price, at what price. Yes. Right. What price? UFC think about, um, hopefully this give you an idea also of things you may not have known. And, well, we told you first. Alright, thanks everybody. Tell you first is produced by Ministry of Funny and brought to you by MediaHawk. This episode was hosted and produced by Terence Chia and Harish Tilani. Sound Engineering by Tristan Yek. Project management by Dominic Lee, with the special thanks to Danny Cordy from MediaHawk. If you're a fan of our work, you can follow the podcast on the me listen app, Spotify or Apple podcasts. Thank you for listening and see you on the next episode of Tell You First.