Do note that this article refers to the old OPC scheme which ends on 24th January 2010. A new scheme will be implemented from 25th January 2010 onwards. For more information on the new scheme, please click here.

Challenged with rising fuel costs, higher taxes and levies on automobiles, local motorists are given a choice to register their spanking new vehicles under the off-peak car (OPC) scheme. Many have avoided the OPC scheme, even reviled it. But the OPC scheme may be a blessing in disguise™

Many people aspire to own a car. Most covert their next door neighbor's new Honda Stream RS-Z while frowning at the Vios in their own carpark lot. But there is always the alternative scheme to owning a car: The Off-Peak Car scheme.

To say the least, a lot of Singaporeans do not have a comprehensive understanding of the OPC scheme. The general consensus is that people who sign for an off peak are lowly paid or struggling financially. Nothing could be further from the truth.

The OPC scheme replaced the weekend car scheme in 1994. The main aims of this scheme was to offer new and existing car owners the option to save on car registration and road taxes in return for reduced usage of the car. When one signs for a vehicle under the OPC scheme, one receives a $17,000 rebate offset against the quota premium and the Additional Registration Fee (ARF). One also receives a flat discount of $800 on annual road tax, subject to a minimum road tax payment of $50 per year.

Not only that, the owner is forced to plan his schedules carefully, as he does not always have the car available. So he might commute to work on the train or bus, but take the car out at night and on the weekends to ferry his partner on shopping trips.

As a result, he spends less on public parking and petrol as well. There is also a growing trend of higher end vehicles being registered under the OPC scheme not because their owners cannot afford it, but because it is so much cheaper to maintain one if the owner does not need the car on a daily basis.

That may sound well and good, but what are its usage limitations?

Well, for one, a driver can only drive his OPC registered vehicle at the following time slots: Monday to Friday, 7pm-7am, and from 3pm onwards on Saturdays & Eve of the major public holidays such as: The New Year, Lunar New Year, Hari Raya Puasa, Deepavali and Christmas. The OPC registered vehicle is permitted by the authorities to be driven on the whole of Sunday.

Under the new scheme however, owners are allowed to drive full days on Saturdays and on the eve of five major public holidays. Namely, New Year, Lunar New Year, Hari Raya Puasa, Deepavali and Christmas. The new scheme might allow more driving hours but these extra hours do not come free. The minimum annual road tax will be $70 instead of $50 under the old scheme.

So, does it mean that an OPC registered vehicle is not permitted to drive on the roads on regular days even in case of an emergency?

Unlike the old scheme where you had to purchase a physical coupon from any Singapore Post Office, things are a lot easier these days. In an emergency, you can utilise your car first and then purchase your e-license through LTA's ONE.MOTORING portal, AXS machines or mobile-SMS service. Along with the convenience of using the car in an emergency, owners are given up to 2359hrs the next day to purchase the e-license.

So can I convert my current car to an OPC, or vice versa?

Let's start with converting a normal car to an OPC. One has to go straight to the Land Transport Authority (LTA). The owner forks out $100 as the conversion fee. Unfortunately, in this case, there is no entitlement to any PARF or COE rebate.

The owner, however, gets $800 discount on annual road tax, subject to a minimum road tax payment of $50 per year (as mentioned earlier). There is an additional PARF rebate on top of the existing PARF value should the owner de-register the vehicle before 10 years is up.

Additional PARF rebate is calculated as follows:

Remaining life of vehicle (in months) x ($2,200 / 12)

Let's use an example: Wendy converts her car (purchased under the normal scheme) into an OPC on 1st December 2006. She plans to de-register it on 23 Jan 2009. She is entitled to an additional PARF rebate as calculated below:

1st Dec 2006 to 31st Dec 2008 = 25 months

1st Jan 2009 to 23 Jan 2009 = 23 days or 0.76 months (23 days divided by 30 days)

Therefore, the total number of months during which the car is converted into an OPC is 25.76. The additional PARF rebate (on top of her existing PARF value) will be:

25.76 x ($2,200/12 months) = $4,722.66

Basically, Wendy does not receive the $17K COE rebate if she converts her normal car into an OPC. The additional PARF rebate is not manifested into cash during the conversion, but only when Wendy de-registers her car 10 years later. Moreover, the existing monthly installments Wendy forks out for her car remains the same since this conversion to OPC is between her and LTA and does not involve her financial institution.

Now, let's look at John who tries to convert his OPC into a normal car. One has to go straight to the Land Transport Authority (LTA). John forks out $100 as the conversion fee, and he also has to cough up the $17K rebate he received when he purchased his OPC. The formula for the top up rate is as follows:

$17,000 x (120 months - no. of months that has passed at the point of conversion)/120 months

The top up amount is apportioned to the COE and ARF value which is calculated as follows:

Car registered on 1st June 2005 as an OPC.

COE= $14,000

ARF = $22,000

Because the car is registered as an OPC, the $17K rebate will be used to offset the COE first, then the ARF.

So:

COE=$0

ARF= $22,000 - ($17,000-$14,000) = $19,000

John's OPC is now converted to a normal car on 20 Jan 2007. The period which the car was registered as an OPC is as follows:

1st June 2005 - 31 Dec 2006 = 19 Months

1st January 2007 - 20th January 2007 = 20 days or 0.67 months (20 divided by 30 says)

Therefore the total no. of months which the car was registered as an OPC is 19.67 months. John has to top up the following amount to convert the OPC to a normal car:

$17,000 x (120 months -19.67 months)/120 months = $14,213

This top up amount is apportioned to the COE and ARF according to the following:

COE = $14,000/$17,000 x $14,213 = $11,704.82

ARF = $ 3,000/$17,000 X $14,213 = $2,508.18

Hence, when John de-registers his car, the COE amount will be $11,704.82. The ARF amount will be $21,508.18($19,000+$2,508.18).

The problem with the 2nd option is John has to pay LTA the top-up amount by hook or by crook.

So at the end of the day, is an OPC really worth it?

We've calculated the sums, ultimately, the decision is still up to the individual. An OPC may seem like a godsend to those who need a car on the weekends or to impress a date, but its limitations will not find favor with everyone.

A piece of advice is, if you want to avoid the hassle of conversions, simply stick with one scheme (OPC or normal) and leave it as it is.

For more information on the new changes to the OPC scheme, please visit /news/writeup.php?AID=94.