Green grin

Story by Peng Ming, pictures from Oneshift.com archive
7 Apr 2009
 

If you're asking yourself "what if i want to get something greener and more efficient?", then you should read this...

Purchasing costs and resale value

This will translate to lower base cost and also lower listed price for green cars.

So you've always wanted to change to a green car, but at the same time unsure of the incurred costs of driving something that's more environmental friendly. Whether you're truly an environmentalist or looking forward to save that extra dollar, the kind folks here at Oneshift.com have done the Math for you.

Here's an easy-to-understand breakdown of the possible costs and savings (if any) should you make the switch.

PURCHASING COSTS AND RESALE VALUE

The Singapore government offers a tax rebate of 40% for new cars using bi-fuel (CNG/Petrol), hybrid or electric propellants registered between 1 October 2006 and 31 December 2011 to offset the Additional Registration Fee (ARF) of these cars.

Green cars attract an ARF of 60% of its open market value (OMV) as compared to the normal 100% OMV for conventional cars whose COEs are obtained from March 2008's tender exercises onwards.

This will translate to lower base cost and also lower listed price for green cars. But do not rejoice yet - when it comes to selling off green cars, it will now fetch a lower price.

Why?

The value of a car in the resale market is largely influenced by its scrap value (this is the amount of money given to you by the government when you de-register and scrap your car). So in the scenario that you choose to sell off your green car at the end of its COE lifespan, the PARF rebate would just be 50% of your additional registration fee (ARF) - which is just 30% of your OMV, due to the 40% tax rebate given by the Government as mentioned earlier.

The lower PARF value means that the green car on hand will have a higher depreciation compared to a normal car. Simply put, the Government will pay you lesser when you decide to scrap your car because you paid less (in terms of ARF) in the first place!

Let's compare the depreciation of these two cars - Honda Civic Hybrid 1.3 (A) and the Honda Civic 1.8 VTI-S (A).

The Hybrid is retailing at $76,000, while the VTI-S at $75,000. Annual depreciation can be calculated using the formula as follow:

(Retail Price - PARF) divided by 10 years

Civic Hybrid: ($76000-$7475) / 10 = $6852.5
Civic VTI-S: ($75000-$13344) / 10 = $6165.6

The Hybrid depreciates at about $700 more than the VTI-S annually - translating to approximately $57 a month. We reckon you must be thinking that amount is not even enough for a single pump at the kiosk, so let's look at the other costs involved.

 


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