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New ERP system Singapore: How will it affect car costs?

There has been a lot of talk about Singapore’s new ERP system that will kick in in 2023. ERP, Electronic Road Pricing (ERP), will now become satellite-based. A prototype of the design of the new on-board unit (OBU) was revealed in early September, and has received some criticism from netizens for its “old tech” and less-than-aesthetically-pleasing design.

And while the new system is capable of utilising distance-based charging, plans to charge motorists according to the distances they clock on congested roads have been shelved for now. Installation of a new OBU, which replaces the current in-vehicle unit (IU), will start in the latter half of next year. The first unit will be free.

What does this new ERP system mean for drivers? More importantly, is it going to cost more?! Read on to find out.

How the new ERP system works

The new ERP system leverages GNSS (Global Navigation Satellite System). However, when it switches on in mid-2023, the existing cordon-based congestion pricing framework will still be in place.

The two-decade-old big and bulky ERP gantries we now have are nearing the end of their operational life and will be scrapped. Instead, the ERP charging locations will be clearly indicated on “smaller and slimmer gantries”.

The new OBU provided for free will come with a bigger screen that can display information on charging locations and rates; real-time traffic updates as well as locations of nearby school zones and Silver Zones.

The OBU will have two designs for motorcycles and all other vehicles. Motorcycles will get fitted with a one-piece unit; while all other vehicles will get a three-piece system which comprises an antenna, a touchscreen display to be installed on the windscreen and a processing unit which can be mounted beneath the dashboard.

But not to worry. Just like the old IU, the OBU will be compatible with the current ERP systems and carparks. You will be able to continue making payments using your Nets FlashPay and ez-link cards, or credit or debit cards.

New ERP rates

As aforementioned, there will be no change to the existing cordon-based and point-based congestion pricing framework when we switch to the new ERP system.

However, according to the Land Transport Authority, ERP rates will continue to be reviewed based on traffic speeds and congestion levels. So if flexible working arrangements and working from home become the new norm for more people in the next few years, we could potentially see fewer cars on the road during peak hour and friendlier ERP rates as a result.

In the future, if or when distance-based road charging is eventually implemented, motorists will be charged according to the distance travelled on the congested stretch, according to the Ministry of Transport (MOT).

This could mean that you will only have to pay distance-based charging in congestion zones, rather than having charges imposed on you wherever you drive. This could potentially be more equitable than the current system, which charges all motorists the same amount regardless of the distance they travel on the congested road.

How will the new ERP system affect car cost?

As the new OBU unit will be provided for free, there should be no additional costs incurred by motorists.

At this point, we do not know what the ERP rates will be when the system kicks in mid-2023, suffice to say that with less crowded roads, the ERP rates are likely to remain low and could lower the costs of owning a car in Singapore.

Other ways to reduce car costs

Avoid rush hour at all costs

If you drive to and fro from work everyday during peak hours, you are likely to chalk up significant ERP charges, which can cost between $2 to $6 per gantry (in pre-Covid times). If we take the average ERP charges to be around $8 a day, you could be spending upwards of $2,240 a year, and that is not even counting errands or any other special trips you make.

To avoid having to pay high ERP charges, plan your route carefully to avoid the gantries and time your trip such that you beat the rush hour crowd. Here’s a hack ― you can check current ERP rates and what routes you can take to minimise ERP charges on gothere.sg.

By avoiding rush hour, you are also less likely to get stuck in jams. This means less time wasted on the road as well as lower petrol consumption ― which can only result in more savings for you.

Park outside the CBD

We all know how expensive parking spaces can be in Singapore, especially in the CBD. Even if you get season parking, you will probably have to fork out at least $200 a month for it.

| Related Article: 15 Cheap Parking Spots in Singapore (2020) |

Consider parking outside the CBD near a train station or bus stop where you can simply hop onto a direct train or bus ride to get to work. This option enables you to get some exercise by walking short distances; you could even get a bike to cycle the short remaining distance to work.

Check out apps such as Park&Go@SG to find available parking options and rates along your driving route.

Protect your car with regular maintenance and insurance

Try to go to the car workshop at least once every six months for maintenance. It can help catch an issue with your car early, before it becomes a problem and costs you thousands in repair costs. It will also keep your car in tip top shape.

And because cars in Singapore are so expensive, it pays to get yours covered with a comprehensive car insurance plan. This is the highest level of car insurance you can get. It covers your third party liabilities, plus any damage to your car.

Depending on the plan you choose, there could also be additional features such as personal accident coverage for the driver (up to a certain amount), windscreen replacement coverage, a courtesy car while your vehicle is being repaired, 24-hour roadside assistance for breakdowns (towing and battery jumpstarts), and more.

Besides vehicle accidents, your car may also receive protection against vandal damage, and “acts of God” such as flooding and falling trees.

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