Singaporean Car Enthusiasts Turn to Malaysia for Affordable Luxury Vehicles

In the wake of escalating Certificate of Entitlement (COE) prices in Singapore, a growing number of Singaporean car enthusiasts are seeking affordable luxury vehicles across the border in Malaysia. This trend, which has gained momentum post-pandemic, is driven by the high costs associated with car ownership in Singapore, compelling many to explore the Malaysian automotive market for more economical options.

According to the Land Transport Authority of Singapore, restrictions prevent Singaporean citizens, Permanent Residents, and long-term pass holders from using foreign-registered vehicles within the republic. Despite these limitations, enthusiasts like Iylia Kwan, a 36-year-old e-commerce entrepreneur, are finding ways to indulge their automotive passions in Malaysia. Kwan, who drives a Malaysian-registered Porsche Cayenne, purchased the vehicle for RM50,000, a stark contrast to the upwards of S$60,000 (approximately RM183,000) he would have paid in Singapore, including COE fees.

The COE prices in Singapore have seen a significant increase, reaching record highs in October 2023, with premiums for smaller cars exceeding S$106,000 and for open category vehicles touching S$158,004. This surge has pushed many Singaporeans to consider purchasing vehicles in Malaysia, where the costs are markedly lower.

Mr. Aedy Fadly Ramli, Director-General of the Road Transport Department (JPJ) of Malaysia, confirmed that foreigners are permitted to own Malaysian-registered vehicles, provided they complete the necessary registration processes, which include biometric verification and a mandatory vehicle inspection.

Car dealers in Johor Bahru have noted an uptick in sales to Singaporeans, with many buyers opting to pay in cash for their new or secondhand vehicles. For instance, Luis Pradeeb, a sales adviser at Sime Darby Auto Selection, reported that popular models such as the 2018 BMW 3 Series 330e are available for around RM80,000, compared to a minimum of S$71,000 in Singapore, inclusive of COE.

To address the parking and maintenance challenges faced by these car owners, Singaporeans like Heeraj Sharma and Regis Tia have launched facilities in Johor Bahru that offer secure storage for luxury vehicles. Their 24,000 sq ft warehouse charges RM1,000 per month for air-conditioned parking, providing services such as 24-hour security and monthly car washes.

The trend is not limited to luxury vehicles; performance car enthusiasts are also actively seeking out Malaysian models. Kelvin Kok, a finance industry professional, recently acquired a Malaysian-registered Toyota GR Yaris for RM230,000, utilizing local financing options and parking the vehicle at a friend's property in Johor Bahru.

Despite the allure of lower prices and the opportunity to own desirable vehicles, Singaporean car buyers face challenges related to parking, maintenance, and navigating the cross-border regulations. Mr. Wan Agyl Wan Hassan, an analyst and founder of MY Mobility Vision, cautioned potential buyers to ensure proper registration and compliance with local laws to avoid complications with insurance claims and other legal issues.

As the trend of purchasing Malaysian-registered vehicles continues to grow among Singaporean car enthusiasts, it reflects broader economic pressures and changing consumer behavior in the region. The allure of affordable luxury cars, combined with the challenges of urban living in Singapore, has created a unique cross-border automotive culture that shows no signs of abating soon.

This phenomenon highlights a significant shift in car ownership dynamics within Southeast Asia, as consumers navigate the complexities of car ownership amid stringent regulations and high costs in their home markets. The future may hold further changes in how individuals approach vehicle ownership, particularly as economic conditions evolve and regional automotive markets develop.