Driving in Singapore - Singapore As A Car Exporting Nation

Singapore As A Car Exporting Nation

The result of the peculiarities of the Singapore car market has resulted in Singapore being the second largest exporter of used cars in the world after Japan. Approximately 100,000 cars are exported yearly. Cars are exported to many countries, including African countries. Used cars are often exported to other countries that have right-hand drive arrangements, but there are exports to left hand drive countries. New Zealand allows the importation of used cars previously registered in Singapore without need for any modifications.

Part of the reason for the high number of used car exports from Singapore is the reduction in the costs of the COE and PARF between 2000 and 2005. Previously, the COE and PARF might have represented 80% of the price of a medium priced car, such as a Honda Accord. With the COE and PARF less expensive that in the past, in some cases the yearly drop in the COE and PARF rebate begins to become significant compared to the pre-tax (OMV) price of a new car. Furthermore, with the PARF rebate starting to diminish after a car is five years old, the net amount of credit (similar to resale value or trade in value) compared to the OMV begins to become less favourable for the owner of an older car. In contrast, in countries with low taxes, such as a low VAT or low sales tax, the most economical ownership strategy is to keep a car as long as possible until the repair costs exceed the cost of depreciation of a new car or financing costs.