Every time I test-drive a car, my heart will get what we in Singapore like to call the “itchy feeling”. If only one can change cars as easily as they change – say – bags … Well, in Singapore, owning a car is not only ridiculously expensive, it is now also made more difficult. As of June 2013, buyers of new and used cars are unable to take any loan higher than 60 percent of the car’s total value (inclusive of COE). And, to make things even more untenable, the loan period is capped at a maximum of five years.
Allow me explain this in another way:
When I bought my Volkswagen Polo in August 2011, I paid a deposit of something like less than $2,000, and took up a seven-year loan to cover the rest. Currently, my monthly car loan is about $1,200.
Now, if I wanted to buy a car, I would need to pay IN CASH 40 percent of the car’s price. It means if I wanted to buy a car that is priced at $100,000, I have to cough up some $40,000 first. Servicing a $60,000 loan over 60 months with interest will lead to a monthly repayment amount of roughly what I’m paying now, if not more. That’s just ridiculous.
Who has $40,000 spare cash lying around?!?! Oh wait! Let me go check my piggy bank, shall I???
Yes, yes … I know what many of you are going to say next:
1. “Don’t drive!”
2. “Take public transport!”
3. “That’s the whole point, isn’t it? To curb the number of cars in Singapore!”
Sorry. Not possible. If I took a cab everywhere and spend about $100 (5 trips a day, each trip roughly $20) on cabs every day, my monthly transport bills for 20 working days would be about $2,000. And I can’t leave bags of products, my laptop, and all the heavy stuff inside a cab while I go for a meeting or attend an event, can I? And this is just for weekdays!
While it’s true I have to pay ERP, pay for petrol, pay for parking etc … the convenience that comes with having a car is – as Mastercard says it – PRICELESS.
So in a conversation with Volkswagen last week, I was told about this leasing programme that VW (along with a number of other car brands in Singapore) has launched. Called the Volkswagen Care-free Ownership Programme, this basically lets you have the convenience of having a car without actually owning it.
Every month, you pay Volkswagen a fixed sum of money (based on the prevailing COE price at the time of you starting this programme) for a model you want to drive.
1. Zero downpayment (you don’t have to cough up 40% cash)
2. Zero servicing charge
3. Zero insurance fee
4. Zero road tax
This programme is available for all models in Volkswagen. Sounds too good to be true? Well, I did a bit more prying and got some of my questions answered:
Q. What is the minimum and the maximum length of contract?
Between 3 and 7 years. How much you pay each month for leasing the car will also depend on the length of your contract.
Q. What is the termination penalty?
Half the cost of the time remaining on the contract. So if you are paying $2,000 a month for a 3-year lease and want to stop after a year, your penalty is roughly 50% of $2,000 X 24 months.
Q. So I don’t own the car, what happens if I get a fine?
The fine will be sent to the leasing company and the company will then inform you.
Q. How does insurance coverage work then?
Normal car insurance coverage procedures apply. You’ll be informed of the “out of pocket” component of any repair costs incurred, the rest is covered by insurance.
Q. So roughly how much will it cost to lease a car from Volkswagen?
Assuming you are taking a 5-year lease, it will cost you $2,108 to lease a Polo 1.2 TSI and $2,319 to lease a Golf 1.4 TSI. These rates are valid only until TODAY (new COE prices will be announced later so these rates will be adjusted).
A number of car brands in Singapore have also launched similar leasing plans. Mercedes-Benz reportedly offers the longest lease period in the market (also 7 years like VW), while Suzuki offers an attractive monthly rate of $998 for its leasing programme. To find out more about Volkswagen’s programme, call +65 6474 8288.
About The Author: Deborah Tan is a founder of Material World. After 10 years of working in magazines Cleo and Cosmopolitan Singapore, she is now a freelance writer/editor who works on this website full-time. She likes liquid eyeliners, bright red lipsticks, tattoos, rock & roll, Mad Men, Suits and thinks it’s ridiculous that cars in Singapore cost the same as a flat. Follow her on Twitter @DebTanTweets.
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