Commercial Vehicle: A Legal Guide to Buying One in Singapore
If you own a business and are looking to purchase a commercial vehicle to assist with carrying out your day-to-day business operations, this article is for you.
It will cover:
- What is a commercial vehicle and how is it different from a personal vehicle
- The different types of commercial vehicles in Singapore
- Who can purchase a commercial vehicle
- How to own a commercial vehicle
- Whether a commercial vehicle can be used for personal use
What is a Commercial Vehicle?
A commercial vehicle is a vehicle that is used for business purposes to help you with a variety of tasks such as delivering goods, transporting your employees, and meeting clients.
How is a commercial vehicle different from a personal vehicle?
Unlike personal vehicles, commercial vehicles have a maximum lifespan of 20 years. This cannot be extended even if you are willing to renew the vehicle’s Certificate of Entitlement (COE), which gives you the right to buy and use a vehicle in Singapore. However, you would still have to renew the vehicle’s COE after 10 years. Hence, you can only renew the COE of a commercial vehicle once. In contrast, there is no limit as to how many times you can renew the COE of a personal vehicle, as long as it is renewed for a period of 10 years.
Amount of financing (loan)
Another difference between commercial and personal vehicles is the percentage of financing you can obtain to fund your purchase for each type of vehicle—personal vehicles can only get financing of up to 70% while commercial vehicles can get up to 90% financing.
Additionally, commercial vehicles are subject to different traffic rules and regulations compared to personal vehicles. For instance, a different set of speed limits is imposed on commercial vehicles for safety reasons, due to their typically larger size and heavier weight which could endanger other road users. For example, Light Goods Vehicles (LGVs) typically have to keep to a speed limit of 60-70km/h on expressways while private cars can go up to 70-90km/h.
What are the Types of Commercial Vehicles in Singapore?
The four main types of commercial vehicles in Singapore are:
- Light Goods Vehicle (LGV)
- Heavy Goods Vehicle (HGV)
- Very Heavy Goods Vehicle (VHGV)
- Goods-Cum-Passenger Vehicle (GPV)
Except for the GPV, the four different types of vehicles are categorised according to their Maximum Laden Weight (MLW). As an owner of a commercial vehicle, you must ensure that your vehicle meets the specific requirements (if any) as discussed below.
Light Goods Vehicle (LGV)
LGVs refer to vans and lorries used to carry and transport goods. Alternatively, they could also refer to minibuses with a maximum seating capacity of up to 15 passengers.
MLW: Up to 3,500kg
Specific requirements that your LGV must satisfy: None
Heavy Goods Vehicle (HGV)
HGVs are large lorries and trucks that are used to deliver goods.
MLW: 3,501 kg to 16,000 kg
Specific requirements that your HGV must satisfy:
- Blind spot safety requirements: All HGVs must be fitted with two rear view mirrors. If your HGV has an MLW of over 12,000kg which is registered from 1 April 2015, it must also be fitted with mirrors or camera devices to cover the vehicle’s blind spots. If your HGV is registered before 1 April 2015, you may either fix on the additional mirrors or camera devices to cover the blind spots, or install a Fresnel lens (which must be at least A4-sized) on the passenger side window. The purpose of these requirements is to enhance the safety of your vehicle and, by extension, other road users. By including additional mirrors and cameras, drivers will be better able to detect pedestrians, cyclists and other motorists at blind spots, thereby preventing the risk of accidents.
- Vehicle Parking Certificate: If your HGV has a MLW over 5,000kg, you must have a valid Vehicle Parking Certificate (VPC) to be able to park your vehicle at designated parking areas. In addition, when your HGV is not in use at night, it needs to be parked in a designated parking space between 12 midnight and 6am.
- Vehicle height and size regulations: If the height of your HGV exceeds 4.5m, you must apply for a police escort. Heavy vehicles are prone to slowing down traffic, especially if they are used to transport weighty cargo. The large size and heavy weight of such vehicles might also affect road structures, hence the movement of these vehicles needs to be controlled via a police escort to guarantee the safety of road users. Additionally, based on the width of your vehicle and the roads you plan to use, you must also apply to the Land Transport Authority (LTA) for an oversized vehicle movement (OVM), which you can read more about here.
Very Heavy Goods Vehicle (VHGV)
VHGVs are used for a variety of purposes, including construction, sanitation, recovery and transport. Examples of VHGVs include large container trucks, prime movers, garbage trucks, tow trucks, cranes and mixers. All of the specific requirements for HGVs from above apply to VHGVs as well.
MLW: Above 16,000kg
Specific requirements that your VHGV must satisfy: See same requirements provided for HGVs above.
Goods-Cum-Passenger Vehicle (GPV)
GPVs can be used to transport both goods and passengers, and examples of GPVs include buses, vans and lorries. A GPV may be classified as either a LGV or HGV depending on its MLW. In addition, GPVs must adhere to special safety requirements.
MLW: Up to 5,000 kg
Specific requirements that your GPV must satisfy:
- Safety regulations for lorries ferrying workers: Lorries cannot be used to ferry passengers, with the exception of transporting workers to and from their place of residence and their workplace. Even so, certain requirements must be met before you are allowed to transport workers with your GPV—for instance, goods within the vehicle must be firmly secured in place so as not to pose a safety hazard to workers on board, and the workers themselves must be seated properly to ensure that they do not fall off the vehicle. Click here for the full list of requirements you need to comply with. Failure to comply with these regulations could result in fines and demerit points imposed by the LTA and Traffic Police.
Who Can Purchase a Commercial Vehicle?
Before you make plans to purchase a commercial vehicle, it is important to take note that only registered companies are allowed to purchase a commercial vehicle in Singapore. You cannot buy a commercial vehicle as an individual unless you hold a hawker licence from the National Environment Agency (NEA).
How to Purchase a Commercial Vehicle in Singapore
To purchase a commercial vehicle in Singapore, you would need to obtain a COE. This is done through an open bidding exercise which takes place twice a month. The applicable COE category for commercial vehicles is Category C (Goods vehicle and bus). You could also register under Category E, which is an open category, but you may be subject to significantly higher COE prices. To find out more about bidding for a COE, click here.
As mentioned above, you may renew the COE for your commercial vehicle after 10 years. However, the vehicle’s maximum lifespan is limited to 20 and cannot be extended even if you are willing to renew the COE. Hence, you can only use a commercial vehicle for a maximum period of 20 years, after which the vehicle will be deregistered and you will have to bid for a new COE if you wish to continue using a commercial vehicle.
You will need to pay a registration fee of $220 for your commercial vehicle.
Can a Commercial Vehicle be Used For Personal Use?
One might be tempted to purchase a commercial vehicle for personal use since commercial vehicles tend to be less costly and you can obtain a higher percentage of financing for them. You may also wish to use an existing commercial vehicle for personal use.
Personal use includes using your commercial vehicle to ferry people who are not workers or employees of your business, or transporting goods that are not for the purpose of your business operations.
However, it is important to keep in mind that commercial vehicles can only be used to carry goods and/or employees of the business. It therefore cannot be used for personal uses.
The LTA stipulates that using a commercial vehicle for personal use and transportation is an offence. A breach of this regulation could result in a fine of up to $1,000 or up to 3 months’ imprisonment. Re-offenders may be subject to a fine of up to $2,000 or up to 6 months’ imprisonment.
A commercial vehicle can be a great way to make your business processes more efficient, but you must take care to ensure that you adhere to all the relevant rules and regulations that come with purchasing such a vehicle.
If you have been caught using commercial vehicles for personal use, you may wish to engage a criminal lawyer who can guide you through the legal process by familiarising you with court procedures, timelines and requirements. A criminal lawyer can also help you to evaluate the strength of your case and advise you on the best possible course of action to take.
You may reach out to a criminal lawyer via our Find A Lawyer service here.
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