Every year, car owners face the annual renewal of their vehicle registration. While driver’s licenses have transitioned from annual renewals to every five or ten years, car registration remains unchanged. This is largely due to the substantial revenue it generates for both the government and the private sector.
The annual renewal process has evolved into a multi-billion-peso industry, thriving as hundreds of thousands of new cars join the millions already congesting our roads. Although mandatory third-party liability (TPL) insurance for vehicles doesn’t contribute billions annually, industry insiders have introduced mandatory emissions testing for all registered vehicles—old and new alike—leading to the proliferation of emissions testing facilities.
A recent government circular emphasizes the necessity of TPL insurance for all vehicle registration renewals. If your new or relatively new vehicle already has TPL coverage included in its comprehensive insurance, you may find it redundant. Consider removing this clause to avoid unnecessary payments.
TPL insurance costs range from P650 to over P1,000 per vehicle, depending on the provider. This creates a lucrative industry not only for various insurance companies but also for the government, which earns a commission on every TPL policy issued. Fortunately, the Motor Vehicle Inspection System (MVIS), a previous administration’s initiative, is no longer mandatory for annual vehicle registration renewals. However, many MVIS centers remain operational, ostensibly to assist motorists in verifying their vehicles’ roadworthiness.
A review revealed that as of February 11, 2021, passing the MVIS is no longer a requirement for vehicle registration renewal, according to the Office of the President. Private Motor Vehicle Inspection Centers (PMVICs) can still operate for those who wish to ensure their vehicles are roadworthy. These centers are now required to charge more affordable fees, and if a vehicle fails inspection, retesting within a year is free.
Recently, I encountered one of these MVIS centers while seeking emissions testing. I was charged P850 for emissions checks, despite being informed that the standard fee was P600. Where did the extra P250 go?
Another troubling trend at many MVIS and emissions centers is the exorbitant fees charged to vehicle owners looking to avoid the hassle of visiting the Land Transportation Office (LTO) for registration renewal. An SUV owner might pay around P5,000 for “no-show registration” after covering TPL insurance and emissions testing fees. They simply hand over their Official Receipt (OR) and Certificate of Registration (CR) to a “trusted” individual at the center, who promises to facilitate registration at the LTO. Within a couple of days, they receive a copy of the receipt showing a renewal fee of around P2,100. This represents over a 100 percent profit for the “trusted” facilitator, who likely paid off someone at the LTO for expedited service.