A Curious Case of OMV

With the change in Certificate of Entitlement (COE) quota policy, COE prices have risen significantly in the last three months. And with no sign of change of policy, COE prices have seemed to reach a new price plateau.

Therefore consumers would have to look elsewhere other than COE prices to obtain a car that is value for money. The next logical component of the car to look at is its Open Market Value (OMV).

The OMV is defined as the value assessed by the Singapore Customs, taking into account purchase price, freight, insurance and all other charges incidental to the sale and delivery of the car from country of manufacture to Singapore.

The OMV value is a critical component that is taken into consideration when a distributor decides on the premium to levy on a particular model of car. Therefore, a lower premium means you get more car for your buck. We’ve highlighted two popular groups of cars for analysis: Mid-level Sedans and Luxury Sedans.

Mid-Level Sedans

Luxury Sedans

In the Mid-Level Sedan category, we see more disparity in the premiums levied on each model. The perennial grouse of Honda pricing their cars above the competition suddenly holds no water as the City model, in May at least; seem to be priced below cost. The Civic model also turned up a surprise as the premium levied on it seemed to be only 60% of what was levied on the Hyundai Avante.

In the Luxury Sedan category, the disparity in premiums levied is smaller and hovering within the $50,000 to $65,000 range. The point of interest here comes with the OMV pricing of BMW’s 523i and the premium levied on it. It has the lowest OMV value but the highest premium levied on it in the table. Though this segment is typified by well-heeled buyers who generally behave in a more price inelastic manner, the difference between the OMV value and premium levied on the 523i does raise an eyebrow.

Though the list price stated usually never the final transaction price, knowing the OMV and the estimated premium levied on the model will empower consumers to make a more informed choice.

The graphs show that a car with a high OMV corresponds to a higher list price but a car with a comparatively lower or newly lowered (due to change of brand’s valuation status) OMV does not necessarily correspond to a lower list price.

Furthermore, the premium levied goes towards paying for the running of dealer networks, advertising budget, warranties for their cars and other operational costs.

The OMV values stated here have been obtained from the Land Transport Authority’s website (http://app.lta.gov.sg/motoring_vo_omv.asp). The values are estimates for cars imported in May 2010 and adjusted to reflect July Round 1 of COE prices. The values are also subject to change due to market forces such as foreign exchange rates.

Oneshift updates OMV values of all cars in the market on the 1st of every month and tracks the pricing history of new cars to allow buyers to make a more informed purchase. Vehicle OMV values are available here. (http://www.oneshift.com/pdb/selectcar.php?funcid=4)

Credits: Edwin Loh