Going green: Car owner's guide to buying an electric vehicle

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Environmental concerns are increasingly taking a front seat in public discourse. Singapore has created the lofty goal of phasing out internal combustion engine (ICE) vehicles by 2023 and reducing peak land transport emissions by 80 per cent by 2050.

To encourage car owners to go green, banks are also offering loans at lower interest rates for EVs than for regular and even used cars. If you’re planning to get an Electric Vehicle (EV), this article will guide you through the process of picking the right EV for you.

Costs involved in getting an EV

Before you start picking out your desired model, here are some things you should know about the costs involved in buying an EV.

Insurance

Once you have selected the right vehicle, you might be concerned with finding the best car insurance for you. On the DBS Car Marketplace, you are able to get a quote for their DBS DriveShield insurance which allows you to tailor your policy to best suit your needs, with optional benefits you can choose to add on if you wish.

Road tax

Do note that the road tax imposed on electric vehicles differs from Internal Combustion Engine (ICE) vehicles. Road tax for an EV is calculated based on the EV’s power rating.

Furthermore, ICE vehicles incur fuel excise duties through fuel consumption. As EVs do not consume fuel, they are not subject to said duties. Hence, in order to achieve balance, an additional fixed tax of $700 a year will be imposed for EVs until the government is able to convert all vehicles to a distance-based tax. This additional tax will be progressively phased in and will only take full effect in 2023.

The tables below demonstrate how road tax is calculated:

Power Rating (kW)	New 6-Month Road Tax Formula
PR ≤ 7.5	$200 x 0.782
7.5 < PR ≤ 30	[$200 + $2.00(PR - 7.5)] x 0.78 8.
30 < PR ≤ 90	[$250 + $3.75(PR - 30)] x 0.78
90 < PR ≤ 230	[$475 + $7.50(PR - 90)] x 0.78
PR > 230	[$1,525 + $10(PR - 230)] x 0.782

Licensing Period	Annual Additional Flat Component
Jan 1, 2021 – Dec 31, 2021	$200
Jan 1, 2022 – Dec 31, 202	$400
Jan 1, 2023 onwards	$700
Source: Land Transport Authority

So with these costs in mind, just how much loan would you need to buy an EV?

How to calculate your car loan

There are a few factors that determine how large of a loan you are eligible to take out. These factors include your monthly income, current financial commitments such as other outstanding loans, and your repayment ability and credit scores. DBS’s car loan calculator can help you determine how much you are able to loan.

The car loan amount is dependent on the net purchase price or net valuation amount of the EV, whichever is lower. The net purchase price is derived as the advertised price of the car minus any benefits or rewards received. The maximum approved loan amount is capped at 60per cent of the net purchase price. This means that you will only be required to make a down payment of 40per cent to purchase an EV.

DBS car budget calculator

An extremely helpful tool available on the DBS Car Marketplace is the inbuilt car budget calculator. You can put in your monthly income, monthly financial commitments and desired loan period and the budget calculator will give you an estimate of your total budget to buy a car and your car loan amount. The calculator then selects and showcases the cars that fit within your estimated budget.
EVs do not come cheap, with vehicle prices ranging anywhere from $100,000 to $400,000. As such, many EV buyers choose to take out a car loan to help finance their purchases.

DBS car loan

DBS offers a comprehensive car loan for both new and used EV purchases. You can apply for a car loan through DBS Car Marketplace or through their car loans promotion page.

To qualify for the promotion, you need to make a minimum loan of $10,000 with a minimum loan tenure of one year. You can apply for a loan on their website using digibank or Singpass.

For second-hand EVs, the loan tenor will depend on the registration date of the car and hence the remaining years on its COE. For example, if the vehicle was originally registered in 2016, the EV would be six years old. Hence, you would be able to take out a loan for up to a maximum of four years to finance the purchase.

Once you've calculated the loan amount you will need to take out, it's time for the fun part: choosing your EV.

Choosing your electric vehicle (EV)

There are a few considerations when it comes to selecting the right EV.

Firstly, the most obvious consideration is the price. As electric vehicles have not yet reached the scale that ICE vehicles have, they tend to be slightly pricier than their ICE counterparts. Check out our previous article on the average cost of EVs in Singapore for more in-depth information.

Secondly is the range that the EV is able to cover. The range of an EV represents the distance that you are able to travel with a single recharge. If you are planning on driving within Singapore, the range might be less of a concern as charging ports are increasingly readily available islandwide. If you are planning on driving your car into Malaysia, the range of your vehicle would be more important as you would have to consider when and where you are able to recharge your car on your trip.

Ready to get started on your EV journey? Then we've got a nifty tool that will help you make the best choice for you.

DBS car marketplace — A helpful tool for your EV-buying journey

Finding the right EV can feel like an overwhelming task. DBS car marketplace is here to make that process as effortless as possible. With a variety of industry partners, DBS Car Marketplace is a one-stop shop that allows you to select the right EV for you.

Here’s a step-by-step guide to navigating the Marketplace.

1. Check out what’s on the market

DBS Car Marketplace partners with direct sellers and dealers to provide a variety of EV options. You are able to filter by individual partners or view all EVs across all partners when browsing on the market.

2. Pick your ideal model

Using the toggles on the sidebar, you can filter your search by car type, car price, registration year, depreciation, mileage and owner number. You can also filter to show only EV options to better streamline your search. For example, the MG ZS Electric Deluxe with eight years and four months left on the COE offered by SgCarMart is available for S$137,000.

3. Customise your vehicle

On top of all that, you can also access exclusive deals to customise your vehicle. DBS and POSB Credit and Debit card-holders get to enjoy the available promotions with partners such as TOMO-CSE Autorim, a leading passenger vehicle interior modification service provider.

You can also customise your EV to match your exact needs, from Euro-style leather upholstery to installing an in-vehicle digital video recorder.

Buying your electric vehicle (EV)

1. Do your homework

When buying a new car, you should always try to negotiate a better deal. This might be a little harder with EVs due to their limited models and supply on the current market as compared to ICE vehicles. However, there are still ways to ensure that you get a good deal for your new car.

For more negotiating power, you first need to have a clear understanding of what models, specifications and deals are on the market prior to going to the seller. Gathering as much information as possible will allow you to make a more informed decision. Having a good grasp of the current market prices for the cars you are exploring will ensure that you will not be misled during the negotiation process.

That being said, be flexible in what you are looking for. If you are willing to accept slightly different specifications on the car, dealers might be able to give you a better discount on the inventory they need to move.

2. Test drive the car

If you are a first-time EV buyer, it is especially important to test drive the car to ensure that you enjoy the driving experience.

As the EV does not have an engine or exhaust, it is whisper-quiet, which might be slightly off-putting to drivers who enjoy the sound of a revving engine. Furthermore, EVs typically have single-speed gearboxes. This means that you will not feel the sensation of a gear change while driving the car.

EVs also deliver 100 per cent of their available power immediately. This means that they are able to accelerate very quickly, which could cause the car to feel “twitchy” when driving during your initial adjustment period. These factors, amongst others, mean that it is especially important to test drive any EV you are interested in buying to ensure that the driving experience is to your liking.

ALSO READ: EV Weekend 2022 boosts consumer awareness on ownership and topics on electric motoring in Singapore

3. Take advantage of existing rebates

Enhanced Vehicular Emissions Scheme (VES)

Under the enhanced VES scheme, buyers can either get a rebate or have to pay a surcharge for the car they are buying based on the pollutants said car emits. The four pollutants being assessed are hydrocarbons, carbon monoxide, nitrogen oxides and particulate matter. Depending on the level of pollutants the car emits, it will be graded within a band.

The rebates for the Additional Registration Fee (ARF) on vehicles that fall within the two highest bands A1 and A2 have been increased by $5,000 for personal cars as of Jan 1, 2021. Cars that are classified as band A1 are considered the ‘cleanest vehicles’ — i.e. the more efficient fully-electric cars.

Cars that are classified as A2 are EVs with higher power consumption and hybrid cars. The rebates for band A1 and A2 cars now stand at $25,000 and $15,000 respectively. Conversely, vehicles that fall within the two most polluting bands C1 and C2 would incur a surcharge of $15,000 and $25,000 respectively.

EV Early Adoption Incentive (EEAI)

Buyers who register a fully electric vehicle will receive a rebate of 45 per cent on their ARF, with the maximum rebate capped at $20,000. This incentive is set to be valid until Dec 31, 2023 and can be used in conjunction with the aforementioned enhanced VES.

With most vehicles, there is a minimum payable ARF of S$5,000. However, for fully electric vehicles, the ARF floor has been reduced to $0. This has greatly alleviated the upfront cost of buying an EV for buyers who have been waiting to pull the trigger.

Conclusion

Singapore’s shift to greener roads means that EVs are here to stay. With the current incentives and promotions available, you probably don’t want to miss your chance to jump on the EV bandwagon and play a part in minimising Singapore’s carbon footprint for a more sustainable tomorrow.

This article was first published in ValueChampion.