A friend and I were on the road when we saw a Volvo. He commented that it’s a great looking car; I reply that it’s true but it’s also a great waste of money.
He said that the COE (Certificate of Entitlement) for these vehicles is the same as any car above 1600cc. Also true, but he (like most Singaporeans) forgot one thing. The COE might be the same, but the registration fee for a Volvo is much higher than that of a Toyota or Hyundai.
When you register a vehicle in Singapore, the COE is not the only thing you will need to pay. There is another payment called the Additional Registration Fee (ARF). This registration fee is 100% of the vehicle’s Open Market Value (OMV), which for a Volvo can come to 6 digits. Although you will receive a de-registration value when you scrap the vehicle (called the PARF), that value at most 75% of your OMV.
That means the day you buy your car, the vehicle has already lost 25% of its value. Not only that, the COE is for 10 years so everyday, you are losing the value of your COE as well. Take the example of the Singapore Land Authority (SLA) fraud case involving Mr. Koh Seah Wee. The case was still under investigation and the authorities were already trying to sell Koh’s Lamborghini and Mercedes Benz cars. The reason is simple; those vehicles were losing money every single day so they need to sell them off as soon as possible.
Unfortunately, it’s difficult to sell such vehicles. Not just in Singapore but frankly everywhere else in the world. When was the last time you heard of anyone proudly proclaiming they have a secondhand Lamborghini, Volvo, or Mercedes Benz. There’s no resale value in such vehicles and that’s beside the point that anyone who can buy these vehicles would naturally want to have the latest model, not a used secondhand one.
Lamborghini, Volvo, Mercedes Benz. All great muscle cars, all look great and all great money drainers.