How The Latest VES Scheme Will Affect Car Buyers In Singapore
Cars affected by the Change in VES come 1st July!
Currently the VES banding is based on 4 pollutants namely carbon monoxide(CO), hydrocarbons(HC), nitrogen oxides(NOx) and carbon dioxide(Co2) but by 1st July 2018 a 5th pollutant known as particulate matter(PM) will also be factored in and how is this going to affect car buyers? Which are the models affected and after 1st July, how much more do you have to pay to own that same model which you have been planning to buy?
Let’s start with the Toyota C-HR Hybrid S.
| Pollutant | CO (mg/km) | HC (mg/km) | NOx (mg/km) | Co2 (g/km) | PM (mg/km) | Banding/ Surcharge/ Rebates Before 1st July 2018 | Banding/ Surcharge/ Rebates On or After 1st July 2018 | Difference |
| Result | 52 | 12 | 5 | 87 | 0.9 | A1/ $20,000 Rebates | C1/ $10,000 Surcharge | $30,000 |
| Banding | A1 | A1 | A1 | A1 | C1 |
As you can see from the table above, the current VES banding of the Toyota C-HR Hybrid S stands at A1 which gives it a $20,000 rebates but it will fall to C1 which will attract a surcharge of $10,000 instead. Yes, the difference is a massive $30,000.00 and most if not all of this $30,000 will probably be passed on to the buyer. Based on current emission test result, this is the amount that we are looking at and it’s not looking good, right?
Our second example is the very popular Honda Shuttle 1.5G Petrol.
| Pollutant | CO (mg/km) | HC (mg/km) | NOx (mg/km) | Co2 (g/km) | PM (mg/km) | Banding/ Surcharge/ Rebates Before 1st July 2018 | Banding/ Surcharge/ Rebates On or After 1st July 2018 | Difference |
| Result | 19 | 14 | 2 | 123 | 4.0 | A1/ $10,000 Rebates | C2/ $20,000 Surcharge | $30,000 |
| Banding | A1 | A1 | A1 | A2 | C2 |
Again, the difference is a massive $30,000.00 which is about 37.5% of its current retail price of $80,000.00. Crazy but it’s true, you probably have to buy your Honda Shuttle now or look for a Pre-Owned unit after 1st July which of course will be quite pricey also due to limited supply. The only thing which will save you, of course, will be COE premiums tumbling down to less than $20,000.00 to cushion off some but not all of this “PM” effect. But what is the chance of it happening? Good Luck!
Now let’s take a look at a few other common models, their shift in the new banding and of course the likely increase or decrease in retail price.
| Make | Grade/ Package | Banding/ Surcharge/ Rebates Before 1st July 2018 | Banding/ Surcharge/ Rebates On or After 1st July 2018 | Difference |
| Honda | Shuttle 1.5G | A2/ Rebates $10,000 | C2/ Surcharge $20,000 | $30,000 |
| Honda | Vezel 1.5X | A2/ Rebates $10,000 | C2/ Surcharge $20,000 | $30,000 |
| Honda | Fit Hybrid | A1/ Rebates $20,000 | A2/ Rebates $10,000 | $10,000 |
| Honda | Grace Hybrid DX | A1/ Rebates $20,000 | A2/ Rebates $10,000 | $10,000 |
| Honda | Shuttle Hybrid | A1/ Rebates $20,000 | B/ Neutral | $20,000 |
| Honda | Freed Hybrid G Sensing | A1/ Rebates $20,000 | A2/ Rebates $10,000 | $10,000 |
| Toyota | C-HR Hybrid S | A1/ Rebates $20,000 | C1/ Surcharge $10,000 | $30,000 |
| Toyota | Prius 1.8S | A2/ Rebates $10,000 | A2/ Rebates $10,000 | $0 |
From the table, you can notice that most of the cars, if not all, will have their rebates reduced or will incur surcharges come this July. None of the cars will benefit from this change in the VES and the only model which is not affected by this change in July is the Toyota Prius 1.8S.
Buying a car is probably the second biggest investment in Singapore and I am sure you do not want to make the wrong decision which could turn out to be very costly. More often than not the timing of your purchase is very important because car prices fluctuate according to the COE trend and of course changes in policy which will increase or reduce the total car cost.
So what should you do now if you are thinking of buying a car soon or if your car is due for scrap and you don’t intend to renew the COE further? Well here are some considerations to help yourself make the right decision.
Firstly, find out the difference in the VES banding of the vehicle you are interested in and see what is the difference in car cost after the shift in the banding comes 1st July. Next, you will face the following 3 scenarios:-
- The difference is $20,000 – $30,000. It makes sense to buy it before 1st July because any drop in COE premiums is unlikely to cushion off such a big difference and your dealer might not have such a huge profit margin to help you either.
- The difference is $10,000. You might want to take a chance. It’s entirely your own call. If you think that after 1st July the COE is going to come down by quite a substantial amount and that the drop is enough to cushion off the “PM” effect then you probably want to wait. But if you think that the COE is not going to drop or might even rise then you probably will want to lock in the price before 1st July.
- There is no difference in the VES rebates/surcharges before or after 1st July. It makes sense for you to wait as there is no reason to rush and there’s no need to compete with others who need to buy their car before 1st July. Unless you strongly feel that the COE is going to rise, it makes more sense for you to buy after 1st July.
Lastly, you may want to act fast because there are not many stocks left and some dealers may not be bringing in any more of those models which attract a hefty VES surcharge or which no longer enjoys a good amount of VES rebates.
Still in doubt? Feel free to call or email us at 6282 8800/ [email protected].
**Disclaimer: Emission Test Results correct at press time. Any change in the Emission Test Results might result in a different banding for a particular make and model under the VES**