Welcome to the glossary section which contains a list of terms used in the industry here in Singapore. For easy navigation, we have divided this section into 3 sections:

• Technical terms – terms which relate to the actual mechanics of a car (under construction).
• Non-technical terms – terms which are not technical in nature.
• Finance and Insurance terms – terms used in relation to aspects of vehicle finance and insurance.

We have made every effort to include as many common definitions as possible and to be as accurate as possible. If what you are looking for is not included in any of the sections or you think a term has been defined inappropriately, please contact us so we can include it or make the necessary amendments.

NON-TECHNICAL TERMS

TERM	DEFINITION
ARF	Additional Registration Fee, currently at 110% of OMV (see OMV below).
Body Value	The market’s assessment of what your car is worth when stripped of all paper value (see paper value below).
COE	Certificate of Entitlement – issued by the authorities via a fortnightly bidding exercise (more information at www.onemotoring.com.sg).
COE Car	A term used in the local market to indicate that the car is older than 10 years old and has had its COE renewed.
COE Rebate	This usually refers to the level at which the COE prices must fall at a bid before the car retailer will return the buyer the difference. For example, If the COE rebate level is $18,000 and the retailer successfully secured a COE for the buyer at $15,000, then $3,000 will be returned to the buyer.
ERP	Electronic Road Pricing – the mechanism that is used by the authorities to control road usage, in effect, it works like a toll.
Extended Warranty	This is a warranty offered over and above the standard warranty period offered by the manufacturer. Not all dealers offer an extended warranty and when they do, it usually attracts an additional charge (see also warranty).
GST	Goods and Services Tax – a value-added tax that is levied on all purchases from GST registered businesses. Currently at 5%.
Guaranteed COE	A term used by car retailers to indicate that at a certain purchase price, they will guarantee that a COE can be obtained within a specified time period. Individual dealers have their own terms and conditions attached to such a guarantee.
ICE	In-Car Entertainment usually in the form of audio and video equipment, can include other electronic entertainment, for example, video games.
Import Duty	Levied on all cars imported. Currently at 20% of OMV (see OMV below).
Market Value	A term used by the insurance companies when assessing the amount of coverage.
Lemon	A term used to describe a car that has reliability problems.
OMV	Open Market Value or the value of the car when imported, before taxes.
On-the-road price	The price that a vehicle is sold for with no additional upfront costs.
OPC	Off-peak cars (with red licence plates), formerly known as weekend cars that can only be used during certain hours of the day unless an additional licence is displayed. These cars are cheaper to own but are only suitable for people who do not intend to use the car very often outside the allowable hours.
Paper Value	The base value of the car comprising the value of the PARF benefit and value of the unutilised portion of the COE at the point of deregistration.
PARF Benefit	The residual (scrap) value of your car backed by the government if it is deregistered and eligible at a particular point in time.
Road Tax	A tax levied on each car which is dependent on the engine size.
Vehicle Inspection	Every vehicle is required to undergo a roadworthiness evaluation when it reaches a certain age. The first compulsory inspection happens just before the car’s third birthday.
Warranty	Usually issued by the manufacturer to cover manufacturer defects. However, some used car dealers offer “warranties” on cars they sell with certain conditions attached.

 

FINANCE & INSURANCE TERMS

TERM	DEFINITION
Cash-back	If the loan quantum arranged exceeds the purchase price of the car, the buyer will receive the balance in the form of a cash rebate.
Comprehensive (insurance)	Insurance that generally provides the widest cover including accidental damage your vehicle, personal accident insurance, etc. Usually the most expensive.
Cover Note	A temporary document issued by the insurance companies until the full policy document is ready for issue. The cover note is valid for 60 days from date of issue.
Depreciation	The rate at which the value of your vehicle falls over time. Usually calculated on an annual basis by using the following formula: (Purchase Price less PARF benefit at end of year 10) / Remaining Life Span of the car as defined by the COE expiry date.
Excess	A term used by insurance companies that indicates the minimum amount that the insured is responsible for in the event of a claim for one’s own damage.
High-Loan	A term used in the local market to indicate that the loan quantum is higher than the maximum of 90% of the purchase price. Some dealers even claim to be able to arrange loans in excess of 100% of the purchase price of the car.
Insurance	Vehicle insurance coverage is compulsory for all vehicles and the government will not renew a vehicle’s road tax unless the vehicle has been covered for the taxable period.
Loading	A factor used to vary the insurance premium depending on the risk profile of the car and/or owner. Factors that can impact your premium include but are not limited to: 1) The make and model of the car 2) The performance attributes of the car (eg, turbo-charged cars may attract higher premiums) 3) The type of car (eg, 2 door cars (coupes) or convertibles may attract higher premiums) 4) Age of driver (premiums may go up for extremely young or old drivers) 5) Driving experience of the driver 6) Claims history of the driver 7) Occupation of the driver
NCB	No Claims Bonus – a term used by insurance companies for the discount in insurance premiums they extend to drivers with good driving records and claims history.
Overtrade	The amount over and above the market value of a car that a buyer is willing to pay. This usually applies when you are trading in a car for the purchase of another.
Rule of 78	A formula applied by car financers to determine how much interest to rebate to the borrower in the event of an early settlement (for example, when you sell your car). The formula is: R = n(n+1) x TC / N(N+1) Where: R – The interest rebate n – The remaining loan period expressed in months N – The original loan period expressed in months TC – The total amount of interest payable over the loan period
Third (3rd) Party Insurance	Insurance that covers liabilities for damage, death and/or injury to 3rd parties only. Usually the cheapest policy.
Third (3rd) Party Fire & Theft	In addition to 3rd party cover above, also covers accidental loss and damage by fire/theft for your vehicle.
Windscreen cover	Additional coverage for the windscreen of your car. Any claim against this cover, for example, in the event your windscreen is damaged by a stone chip, will not affect your no claims bonus (see NCB).