A Guide to Buying A Commercial Vehicle In Singapore (2022)

Guest Contributor
Last updated Apr 21, 2022

COE prices, taxes and other costs of owning a commercial vehicle in Singapore.

A commercial vehicle could be the boost your business needs. Commercial vehicles can help cut costs, save time on deliveries, and make processes more efficient, increasing productivity and helping you meet targets on time.

In addition to the tax and fees, there are various other factors that you need to consider when buying a commercial vehicle. We take an in-depth look at what such a purchase entails.

Here’s a rundown of what we’ll cover: 

Source: Nissan

How to own a commercial vehicle in Singapore

In Singapore, only registered companies are allowed to buy commercial vehicles.

Individuals are not allowed to purchase commercial vehicles unless they possess a hawker licence from the National Environment Agency. When purchasing a commercial vehicle, here is what you need to note:

  • Every commercial vehicle requires a Certificate of Entitlement (COE). Commercial vehicles can be registered under category C – Goods Vehicle & Bus, or category E – Open (Except Motorcycle).

    As of January 2022, COE for category C is S$42,200, while those in category E pay S$82,501. 
  • Commercial vehicles have a maximum life span of 20 years. You can only renew the COE after the first 10 years; after 20 years, you can’t continue using the vehicle.
  • The vehicle registration fee is S$220 for all commercial vehicles.
  • If you want to purchase a commercial vehicle, you can get up to 90% financing.
  • Commercial vehicles have to adhere to a different set of speed limits in Singapore. For example, buses and light goods vehicles generally have to keep to around 50 km/h on roads and 60 to 70 km/h on expressways.  
  • Heavy goods and very heavy goods vehicles should only be parked at designated spots when not in use at night between 12:00am and 6:00am.
  • For heavy and very heavy goods vehicles, if your vehicle’s width and the roads you will be travelling on require it, you may have to apply for an oversized vehicle movement permit.

Types of commercial vehicles in Singapore

There are four main types of commercial vehicles in Singapore. These vehicles are generally classified according to their Maximum Laden Weight (MLW), with the exception of Goods-cum-Passenger Vehicles. The MLW then determines the road tax payable. The vehicle category also determines the Additional Registration Fee (ARF). Here’s a breakdown of the different categories.

Light Goods Vehicle (LGV)

MLW: Up to 3,500 kg 
Purpose: Transport goods; if small bus, can carry up to 15 passengers
Examples: Nissan Cabstar, Volkswagen Caddy, Toyota Hiace Commuter/Van 
ARF: 5% of vehicle’s Open Market Value (OMV) 

Vehicle type Road tax (six-monthly) 
Diesel and diesel hybrid  S$213
Petrol and petrol hybrid  S$170
Electric  S$170

Diesel and diesel hybrid goods vehicles benefit from road tax rebates of 50% from 1 August 2021 to 31 July 2022, while petrol and petrol-hybrid vehicles get 100% road tax rebates for one year over the same period. 

An Additional Flat Component (AFC) of S$190 has been applied for electric LGVs from 1 January 2021 onwards. If your vehicle was registered before then, the AFC is waived till 31 December 2023.

For vehicles registered after 1 January 2021, the AFC will vary from S$50 to S$190, depending on when the vehicles were registered. 

Heavy Goods Vehicle (HGV)

MLW: 3,501 kg to 16,000 kg
Purpose: Transport goods, e.g., truck and lorries 
Examples: Mitsubishi Canter 
ARF: 5% of vehicle’s OMV 

MLW Vehicle type Road tax (six-monthly) 
3,500 kg < MLW ≤ 7,000 kg  Diesel & diesel hybrid

Green & petrol
S$328

S$262
7,000 kg < MLW ≤ 11,000 kg Diesel & diesel hybrid

Green & petrol
S$362

S$289
11,000 kg < MLW ≤ 16,000 kg  Diesel & diesel hybrid

Green & petrol
S$489

S$391

The same rebates as LGV apply for the HGV category from 1 August 2021 to 31 July 2022. 

Very Heavy Goods Vehicle (VHGV)

MLW: More than 16,000 kg 
Purpose: Includes recovery, construction, sanitation, transport (e.g., tow trucks, cranes, mixers) 
ARF: 5% of vehicle’s OMV   

MLW Vehicle type Road tax (six-monthly) 
16,000 kg < MLW ≤ 20,000 kg (2 axles) Diesel & diesel hybrid
Green & petrol
S$850
S$680
16,000 kg < MLW ≤ 20,000 kg (3 axles) Diesel & diesel hybrid
Green & petrol
S$553
S$442
20,000 kg < MLW ≤ 26,000 kg Diesel & diesel hybrid
Green & petrol
S$765
S$612
26,000 kg < MLW ≤ 32,000 kg Diesel & diesel hybrid
Green & petrol
S$765
S$612
32,000 kg < MLW ≤ 40,000 kg (4 axles) Diesel & diesel hybrid
Green & petrol
S$1,190
S$952
32,000 kg < MLW ≤ 40,000 kg (>5 axles) Diesel & diesel hybrid
Green & petrol
S$850
S$680
40,000 kg < MLW ≤ 55,000 kg Diesel & diesel hybrid
Green & petrol
S$1,275
S$1,020
MLW > 55,000 kg Diesel & diesel hybrid
Green & petrol
S$1,488
S$1,190

Road tax for Prime Movers only: 

MLW Vehicle type Road tax (six-monthly) 
MLW ≤ 20,000 kg Diesel & diesel hybrid
Green & petrol
S$553
S$442
20,000 kg < MLW ≤ 26,000 kg Diesel & diesel hybrid
Green & petrol
S$765
S$612
26,000 kg < MLW ≤ 32,000 kg Diesel & diesel hybrid
Green & petrol
S$765
S$612
32,000 kg < MLW ≤ 40,000 kg Diesel & diesel hybrid
Green & petrol
S$850
S$680
40,000 kg < MLW ≤ 55,000 kg Diesel & diesel hybrid
Green & petrol
S$1,275
S$1,020
MLW > 55,000 kg Diesel & diesel hybrid
Green & petrol
S$1,488
S$1,190

The same rebates as the other categories apply for the HVGV from 1 August 2021 to 31 July 2022. 

Goods-Cum-Passenger Vehicle (GPV)

MLW: Up to 5,000 kg – depending on their weight, they can be classified as LGVs or HGVs. 
Purpose: Transport goods and passengers, e.g., buses, vans, lorries  
Examples: Toyota Liteace, Mitsubishi Triton

ARF:

OMV  ARF (% of OMV)
1st S$20,000 100%
Next S$30,000 (S$20,001 to S$50,000) 140%
Any amount above $50,000 180%

Road tax: 

MLW  Vehicle type  Road tax (six-monthly) 
MLW ≤ 3,500 kg Diesel & diesel hybrid
Petrol & petrol hybrid
Electric
S$372
S$298
S$298
MLW > 3,500 kg Diesel & diesel hybrid
Petrol & petrol hybrid 
S$487
S$390

Diesel and diesel hybrid GPVs benefit from 50% tax rebate from 1 August 2021 to 31 July 2022, while petrol and petrol-hybrid GPVs have 100% tax rebate for one year over that period. 

The same AFC as LGVs applies to this category. 

Summary of the payment and tax costs for the different categories of commercial vehicles:

Fee/Tax Light Goods Vehicle Heavy Goods Vehicle Very Heavy Goods Vehicle Goods Cum Passenger Vehicle
Registration Fee  S$220 S$220 S$220 S$220
Additional Registration Fee  5% of Open Market Value  5% of Open Market Value  5% of Open Market Value  Depends on OMV
Certificate of Entitlement category C or E C or E C or E C or E
Excise Duty Exempted Exempted Exempted Exempted
Lifespan 20 years 20 years 20 years 20 years
Road tax rebates for diesel and diesel hybrid goods vehicles 

(1 August 2021 to 31 July 2022)

50% road tax rebate 50% road tax rebate 50% road tax rebate 50% road tax rebate
Road tax rebates for green / petrol /petrol hybrid goods vehicles

(1 August 2021 to 31 July 2022)

100% road tax rebate for one year 100% road tax rebate for one year 100% road tax rebate for one year 100% road tax rebate for one year
Road tax (six-monthly)  Dependent on Maximum Laden Weight, usage of diesel/green/petrol/electric Dependent on Maximum Laden Weight, usage of diesel/green/petrol  Dependent on Maximum Laden Weight, usage of diesel/green/petrol  Dependent on Maximum Laden Weight, usage of diesel/petrol/electric
Additional Flat Component of road tax  For electric vehicles, it depends on when they were registered      For electric vehicles, it depends on when they were registered 
Emission incentive or surcharge An emission surcharge or  incentive may apply if you register your vehicle from 1 April 2021 to 31 March 2023     An emission surcharge or  incentive may apply if you register your vehicle from 1 April 2021 to 31 March 2023

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Other costs to consider when buying a commercial vehicle in Singapore

In the previous section, we have already covered additional registration fees, road tax, and COE fees. What are some other costs you will need to factor in when purchasing a vehicle for your business? 

Surcharge/incentive for vehicular emissions

The Commercial Vehicle Emissions Scheme was introduced for the period 1 April 2021 to 31 March 2023 to promote the use of newer and cleaner LGVs, in order to reduce harmful emissions. Vehicles registered during this period will get a rebate or surcharge depending on their levels of emissions. 

Commercial vehicle insurance in Singapore

You will need to purchase insurance for your commercial vehicle. The insurance premium price depends on the car type, coverage, and engine of the vehicle.

Commercial car insurance costs between S$1,500 and S$3,500 per year in Singapore. It will cost you more to insure your commercial vehicle than your small personal car, for example, due to associated industry risks. 

Comprehensive insurance covers generally cost more and insure your vehicle against damage caused by accidents, vandalism, and theft.

The cover may also include extended medical coverage and road assistance. Here are the key considerations you should make when purchasing insurance:

  • No claim discount on the insurance cover.
  • What does the cover insures? Make sure it covers loss or damage to the car, as well as death or injury to a third party.
  • Approved workshops where you can repair your car.
  • Income replacement when your vehicle is being repaired.
  • Adjustable excess.

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Factors you should consider when buying a commercial vehicle in Singapore

Before purchasing a commercial vehicle, consider the following:

Purpose and features of the vehicle

The purpose of the vehicle is one of the main factors that you should consider. LGVs and GPVs should be sufficient for a wide range of uses, while HGVs and VHGVs are usually required for specific industries.  Review what you’d use the vehicle for so as to invest in the right one.

Cost

Make sure that you stick with your budget. Bear in mind that the cost of the car includes taxes, fees, insurance and maintenance costs for the vehicle.

Future business plans

Before you purchase a new commercial vehicle, consider plans and sustainability. The vehicle is an investment, and you should consider future expansion plans. Consider purchasing a commercial vehicle that will assist you in achieving your goals in the next one to two years.

Can you use your commercial car for personal use?

According to the Land Transport Authority, using a commercial vehicle for personal use and transportation is an offence.

If found contravening the rule, you risk a fine of S$1000 or three months in jail for the first conviction. A second conviction means you risk a fine of S$2000 or six months in jail.

A commercial vehicle can only be used for business purposes, such as carrying goods and employees.

To buy or not to buy a commercial car?

If you need a vehicle specifically for business-related purposes, review the taxes and fees you will incur in the different categories. Buy a vehicle that will serve your business effectively while incurring minimal costs, to take your business to the next level. 


Buying a commercial vehicle is an investment you make for your business. Make sure you protect your investment by purchasing the right car insurance. Apply now for insurance deals that guarantee coverage at an affordable rate.

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Guest Contributor April 21, 2022 87656