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Commercial Vehicle Zero Growth Rate

With the new initiative coming from LTA which will take effect from Feb 2018 for private passenger vehicles (Cat A and B) and Motocycles (Cat D). The growth rate for goods vehicles and buses in Category C will remain unchanged at 0.25 per cent until the first quarter of 2021.

LTA said this is to provide businesses more time to improve the efficiency of their logistics operations and reduce the number of commercial vehicles they require.

LTA said the move was “in view of Singapore’s land constraints and our commitment to continually improve our public transport system.”

“Twelve per cent of Singapore’s total land area is taken up by roads,” it added. “In view of land constraints and competing needs, there is limited scope for further expansion of the road network.”

In view of such implementation would it force business owners to increase their fleets of commercial vehicle before the policy sets in? With the ever increasing 3PL (3rd party logistic) services to fulfill growing e-commerce businesses, I reckon business owners will have to strategically align their business plan for the implementation.

Good News for Independent Workshops

Starting 2018 customers will have the choice to choose and compare prices between AD (Authorized Distributors) or Independent workshop for which they wish to send their vehicles for servicing, repair or purchasing of parts.

Competition Commission of Singapore (CCS) and local AD have agreed to lift the warranty restrictions if you wish to send your vehicle to your designated independent workshop. 

The CCS said it has worked with major car dealers to remove these restrictions from existing and new warranties. The move comes after the commission concluded an inquiry into the supply of car parts.

By lifting the restrictions, AD and Independent workshops will have a more leveled playing ground. This in turn will benefit consumers to have better options and also to safeguard their interest. 

 

New vs Used vs Leased Commercial Vehicles

Each time when your company decides to increase it’s fleet of commercial vehicle we will be struck with the dilemma of making the ‘right’ choice for your company. 

New vehicle? Used vehicle? Leased vehicle?

These are the questions you will be asking yourself. But what is really the pros & cons of the 3? Let us guide you through so that you are really able to make the ‘best choice instead of the ‘right’ choice. 

Brand New Vehicle
Pros
1. 7 years full loan of the purchased amount
2. Interest rate at 2.99%
3. Lower fuel consumption
4. Better emission level
5. Less likely to break down
6. Newer and safer technology
7. 3-5 years warranty
8. Comprehensive insurance coverage
9. Lower depreciation
Cons
1. Longer waiting list
2. Bigger amount to loan might lead to rejection from bank
3. Higher risk management

Used Vehicle
Pros
1. Ready made for collection
2. Lower risk management
Cons
1. Simply the opposite of all Brand new vehicle’s Pros
2. 3.4% interest rate

Leased Vehicle
Pros
1. Instant availability
2. Maintenance servicing covered by vendor
3. Vehicle replacement in case of breakdown
4.  No risk management involved
Cons
1. Higher monthly payment
2. Long term leasing is definitely not advisable
3. Higher excess for insurance
4. Only 3rd party coverage for vehicle more than 10 years old

To put it into perspective, each has it’s own positive aspect. What it affects your decision will be the objective for the use of the vehicle. Is it for long or short term? Do you need it urgently? What is your budget?

I hope through this article we can share the experience we have so that you are able to make the best choice of selecting which source of vehicle should be best fitted with your need. 

 

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