(Featured photo: The Business Times)
It’s no secret — the two most expensive assets you can own in Singapore are a house and a car. In addition to the actual market price of a car (also known as Open Market Value), you’ll also be paying for additional charges like COE, ARF, car insurance and monthly loan instalments. So, how much does it actually cost to buy a car in Singapore? Read on to find out because we’ll be breaking down everything you need to know about the cost of car ownership on this little island.
Why is it so expensive to buy a car in Singapore?
If you’ve done a quick survey on car prices in Singapore, you would’ve noticed that the Open Market Value (OMV) and the selling price of a car are starkly different from each other — and by that, we mean different by thousands of dollars. That’s because the selling price of a car in Singapore consists of much more than just the OMV. Here are some of the major car ownership expenses that you need to know. We’ll use the Toyota Sienta 1.5 Standard (A) as an example for the cost breakdown.
Open Market Value (OMV)
A car’s OMV is the price that was paid for its import into Singapore. OMV is the value of the car before it is subjected to all relevant charges and taxes. For instance, the Sienta’s OMV is currently at $17,804.
Certificate of Entitlement (COE)
A rather infamous term among the locals and residents, the Certificate of Entitlement (COE) is a digital certificate that allows you to own and drive a vehicle in Singapore. It’s one of the heftiest expenses that you’ll have to bear while buying a car as the certificate alone can cost you over $100,000. 🤯
In the case of the Sienta, the COE quota premium comes up to $74,989.
Vehicular Emission Scheme (VES) surcharge or rebate
The VES was introduced in 2018 to encourage car owners to buy cars that emit less pollutants. Based on your car’s emission, you’ll either be eligible for an Additional Registration Fee rebate or pay an emissions surcharge. There is no VES payable for the Sienta.
Additional Registration Fee (ARF)
The ARF is a tax that is imposed when you register your car. It will be calculated based on your car’s OMV.
Then, there’s also the New ARF that was introduced earlier this year which applies to luxury cars with an OMV exceeding $80,000, including cars like the Porsche Cayenne, Mercedes-Benz S450L Mild Hybrid and the McLaren 600LT Coupe. The new ARF can cost up to 220% of a luxury car’s OMV.
|(New ARF) Above $80,000
Based on the table, we can see that the ARF for the Sienta will cost $17,804.
Car insurance premium
Another unavoidable expense when buying a car in Singapore as it’s mandatory by law, your annual car insurance premium will depend on various factors that will be taken into consideration by your insurer. These factors include your age, gender, driving experience, occupation, the brand, model and age of your car, how you’ll be using your car (whether predominantly for leisure or work), and your No Claims Discount history.
Generally speaking, the average annual car insurance premium for a male driver in his 20s can go up to $2,247, whereas a 40-year-old male driver may only have to pay about $1,596.
Women drivers in the same age categories generally pay less, at about $2,083 and $1,576 respectively. This is because insurance companies consider male drivers more accident-prone, which means that they’re a bigger risk.
Car loan instalment
If you’re not making a lump sum payment to purchase your car, your other option is to get a loan. Generally, the more you borrow and the longer your loan tenure, the more interest cost you’ll be paying.
There’s also a limit to how much you can borrow. If your car’s OMV is not more than $20,000, you may be able to secure a loan up to 70% of the purchase price. This amount decreases with costlier cars.
Say, you’re able to loan 70% of a Sienta’s purchase price ($139,888 at the time of writing). Assuming that your loan amount is approximately $97,921, your interest rate 2.28% p.a. and your loan tenure a total of 7 years, your monthly instalment will be $1,352.
By the end of the 7-year period, you will have paid a hefty $113,568 — this figure is much higher than your principal loan amount due to the interest cost.
Road tax is another recurring cost that you’ll have to look into when deciding to buy a car. The current road tax for the Sienta is $682 per year. Assuming that you’ll be driving it for the next 10 years, you’ll have forked out $6,820.
Servicing and maintenance
The lowest-priced service package for the Sienta at Toyota’s service centre costs about $257 per visit. Assuming that you head over twice a year for servicing, you’ll have to set aside $514 per year, which will set you back by $5,140 for 10 years.
Parking and petrol
HDB Season Parking costs $190 per month. This excludes other external parking charges, such as office parking, parking at malls, and places of attraction. In 10 years, your HDB Season Parking alone will come up to $22,800.
On the other hand, going by the current petrol price ($3.39), refuelling a Sienta to a full tank will cost you about $142. If you drive as much as the average Singaporean, you will most probably pump a full tank once every month. This means that for the next 10 years, you’ll be spending about $17,040 on petrol (without taking into account fluctuations in petrol prices).
The total amount you’ll be paying for parking and petrol can easily go up to $362 monthly and $39,840 in 10 years.
|Servicing and maintenance
|Parking and petrol
|Total expense in 10 years
What to consider before buying a car in Singapore
$178,044 for a car is a huge financial commitment — so take as much time as you need to go through your options and weigh the pros and cons of car ownership. To help you get started, here are a few things to consider before taking the big step.
Car value depreciation
You may not like hearing this but your car’s value is going to go down and down from the moment you purchase it — and there’s a range of contributing factors behind that including the mileage clocked and the natural wear and tear that comes with usage.
In fact, a car like the Sienta can lose its value by a whopping $13,100 a year. 🤯
How frequently will you be driving?
Given how quickly the value of a car depreciates, it would not be wise after all to buy one only to have it parked most of the time. So, it’s important to consider how actively you’ll be driving. For instance, if you need to drive every day for work or have kids or aged parents for whom public transport may not be suitable, buying a car would be a good move.
New car or used car
Don’t forget to also think about whether you’d like to drive a brand-new car or a used car. Price-wise, there’s definitely a lot of difference between the two — in fact, a used car in Singapore can cost about 70% less than a new car.
And if you’re choosing a used car, make sure that you’re going for something that’s been well-maintained.
Can you still drive if you decide not to buy a car?
Here’s some good news: not buying your own car doesn’t mean that you’ll never be able to drive. With more alternatives like car rental popping up in Singapore, you’ll no longer need to tie yourself down to the commitment of car ownership. Simply put, all you need to have to be able to drive is a driving licence.
Check out our full guide on how much it costs to get a driving licence in Singapore.
Car rental in Singapore: bridging the gap between car ownership and mobility
Car rental in Singapore is fast gaining popularity due to the flexibility that it offers. Plus, since cars are typically located across the island (often just a stone’s throw away from your residential building), driving has become all the more convenient.
Not only that, when you rent a car, you’ll need not worry about things like COE, car insurance, loan, value depreciation and servicing. At GetGo, we take it a step further and even handle refuelling — which means that you’ll only have to pay for what you use.
Is car rental for you?
To be able to answer that question, we’ll first have to look at the two main types of car rental in Singapore.
Monthly car rental
This type of rental service allows you to book a car anywhere from weeks to months and even up to a year. It generally involves a lot more procedure and paperwork due to its longer duration.
Those who need to drive every day will enjoy the peace of mind that long-term car rental offers since the car that you book will only be yours for the entire booking period.
Hourly car rental
Hourly car rental on the other hand allows you to book by the hour. Generally, people tend to use hourly car rental for ad-hoc trips like grocery runs, road trips and house visits — although there are many who rent by the hour for routine activities like sending kids to school.
When you use GetGo, you’ll not only get to book from as low as $3/hour, but may also stretch your booking up to a maximum of five days.
We’ve shared more about the differences between long-term car rental and hourly car rental, so be sure to hop over and learn more.
The bottomline is: what are your driving needs?
Ultimately, whether or not you should buy a car simply boils down to your own needs — and that includes how necessary owning a car is to you and how frequently you’ll be driving.
Whether you want to try out different cars before buying one or simply want to enjoy the convenience of car rental, GetGo’s extensive fleet of over 10 different car brands and 26 models located throughout Singapore can give you that flexibility and the freedom to drive.
Found a car you’d like to drive? Download GetGo now to rent a car from just $3/hour and use code G50FTD to get 50% off* (capped at $8) your first drive.
* Code is only valid for the first booking. Other T&Cs apply.
See you on the road,
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