01 July 2014

VEP Increased from S$20 to S$35 Starting August 2014

According to LTA website, the Vehicle Entry Permit fee for foreign-registered cars entering Singapore will be raised from S$20 to S$35 per day, while the Goods Vehicle Permit fee for foreign-registered goods vehicle will be raised from S$10 to S$40 per calendar month.

I believe that is a good move by Singapore government to reduce the congestion in between the causeways during peak hours. There are many concerns from Singaporean on the VEP for foreign cars especially when COE rose to rocket high recently. Let us summarize what are the impacts to those who own foreign-registered cars and traveling in between Singapore and JB:

  1. Assuming they work for 5 days per calendar week and there are 52 weeks, the amount to be paid up increased by S$3,900 per year or S$325 per month. 
  2. The 10 years usage of vehicles in Singapore by foreign vehicles would be 52 * 5 * 10 * 35 = S$91,000 which is higher than current COE bidding price. 

It would give impact to the foreigners who traveling in between JB and Singapore:

  • They may convert their cars to Singapore registered cars, so it would not actually reduce the congestion.  
  • They may change to other alternatives such as motorbikes / public buses. If number of motorbikes increased and  it also would not reduce congestion along causeways as motorbikes may block the ways for cars & buses.
  • They may move into Singapore instead of traveling in between two places. It may give higher inflation to the existing Singapore rental market.  
If this is a constraint for people to move out from Singapore, I believe the property market in Iskandar Malaysia may take a hit. Nonetheless, once everyone is getting used to the inflated VEP price, I believe the crowd would come again from Johor Bahru to Singapore. 

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