Enjoy Driving These Affordable Cars Without “Virtual Gantries” Before ERP 2.0 Kicks In

It wasn’t long ago when a budget of less than S$9,000 annual depreciation yielded decent results in Singapore’s wacky car world context. Pre-loved compact hatchbacks in decent condition were available in troves and not yet due for the scrapyard. But as the saying goes, no point dwelling in the past - especially when we can’t yet see the light at the end of the tunnel. COE prices are seemingly on an uptick every cycle, making bang for buck finds feel pretty much like a lost cause.

Is Singapore preparing for ERP 2.0?

Well, yes but it remains to be seen how this will be implemented effectively. Will ERP 2.0 shake things up dramatically? Replacing the current ERP system with a satellite-based one, essentially creating “virtual gantries” allows the government to charge drivers based on a vehicle’s usage style and distance travelled. If this is in place (while COE structures remain unchanged), that should make the cheapest cars in the market equally unattainable, and crucially less desirable from a “freedom” standpoint.

What will happen if ERP 2.0 is implemented and COE is removed?

Having six figures worth of COE erased from a new car’s fee sounds too good to be true. For sure, the effects of this approach (if implemented) will take some getting used to. Imagine: S$70 “virtual gantry” charges at off peak hours might surge to S$120 on a rainy Friday peak hour traffic. If there’s a Blackpink concert? Create a virtual ERP 2.0 “radius” around surrounding roads to disperse traffic, and lower fees on roads near MRT stations on the far end of Singapore to encourage public transport. All these are possible, and it exudes Black Mirror vibes…

Were cars in Singapore cheaper one year ago?

Cat A and B COE premiums spiked more than S$20k and 30K respectively over a year (at time of writing), so it’s no surprise that dealers have to adjust prices accordingly. While that has a direct impact on new car purchases, used cars are more tricky. High COE premiums often persuade new car buyers to look elsewhere - zoom in either on “cheaper” COE bands like Cat A (if they were previously eyeing Cat B vehicles), or explore the used car market. The latter gives used car dealers the edge here - the trickle down effect from potential new car buyers now widening the buying pool for pre-owned cars.

Can I afford the cheapest new vehicle in Singapore?

If you swear by not buying used cars and want to take up a loan, be prepared to declare information to the bank like your total debt servicing ratio, income and credit score. Sure, you can loan up to 70% of the OMV of the vehicle. The current market suggests that the “cheapest” crop of four-wheeled vehicles fall under the Cat C (commercial vehicles) bracket. Parallel importers might still have their warehouse stocked with the BYD T3, Toyota Townace and Honda N-Van, just to name a few.

ERP 2.0 distraction aside, what cheap used cars can I buy now?

There’s quite a few to be had with a budget of S$700 depreciation per month. A funky Fiat 500 (on its second COE spell) is one of those that grows on you with time. A stick-shift Nissan Sunny seems to be ever present in this price bracket too - at S$660 monthly depreciation it sounds like a real bargain. If you’re a business owner and require cargo space, Honda’s N-Van would suit you to a tee. If short term ownership makes sense for you, this Kia Koup works a treat.

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