Friday, March 15, 2013

Still More Expensive

On Wednesday, COE prices showed a mark decrease in price for Cat B COE. This means that for big vehicles are now cheaper for small vehicles. Does this means it’s time to go and buy a big car for the family?

No! And it’s a BIG FAT NO!

Although the COE car for a luxury car like a Porsche is now cheaper than one for a Toyota, people need to understand one simple thing. The COE is not the only thing you need to pay to buy a car. Outside the COE, buyers also need to pay the registration fee, also know as the ARF (Additional Registration Fee).

And under the new rules, the ARF of a luxury car will be much higher than that of a small car. Take for example a car with the OMV (Open Market Value) of $75,000. In the past, the ARF is based totally on the OMV so a vehicle with the OMV of $75,000 will have an ARF of $75,000. This is what you pay to register the vehicle.

However, under the new 3 tier ruling, the ARF for this vehicle will be $107,000. So this means that although the COE for Cat B is $58,090, over $16,000 below Cat A, any money saved on the COE will be given back under the new ARF scheme.

That is even before you bring in the cost of the stricter loan policies that were announced along with the new ARF system. So before you go out there and put a down payment for a luxury car, do your sums. The COE is not the be-all and end-all in the price of a car.

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