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 Hybrid 1.5G CVT 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 $22,574.

Certificate of Entitlement (COE)

A rather infamous term among 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 $106,000.

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) and Preferential ARF (PARF) rebate

The ARF is a tax that is imposed when you register your car. It will be calculated based on your car’s OMV.

The Revised ARF was introduced earlier this year, with increased fees for cars with an OMV exceeding $40,000. This affected a range of cars from the Honda Odyssey Hybrid to the Porsche Cayenne. For luxury cars with an OMV over $80,000, the revised ARF can cost up to 320% of the OMV.

Based on the table, we can see that the total ARF payable for the Sienta will cost $23604.

With this tax going up, you’ll be glad to know about PARF, a rebate that’s a percentage of your ARF. Aside from the usual COE rebate that applies when you deregister your vehicle before its COE expires, the PARF rebate in Singapore helps you get some money back. The younger your vehicle is when you deregister it, the higher the rebate, but it is capped at $60,000. Be sure to check if you have a PARF car to enjoy this rebate.

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 ($181,488 at the time of writing). Assuming that your loan amount is approximately $127,042, your interest rate 2.28% p.a. and your loan tenure a total of 7 years, your monthly instalment will be $1,637.

By the end of the 7-year period, you will have paid a hefty $137,570 — this figure is much higher than your principal loan amount due to the interest cost.

Road tax

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 $288 per visit. Assuming that you head over twice a year for servicing, you’ll have to set aside $576 per year, which will set you back by $5,760 for 10 years.

Parking and petrol

(Photo: Channel NewsAsia)

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 ($2.90), refuelling a Sienta to a full tank will cost you about $121. 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 $14,576 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.

What to consider before buying a car in Singapore

$215,126 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.

Carsharing in Singapore: bridging the gap between car ownership and mobility

Carsharing in Singapore is fast gaining popularity due to the flexibility that it offers. Plus, when you choose carsharing, 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 carsharing for you?

Carsharing gives you the freedom to start your journey from almost anywhere in Singapore and is useful for short, ad-hoc trips. Plus, you can book your drive at any hour of the day. This is different from traditional car rentals, which typically involve heading down to the location of the rental agency and committing to rent for a longer duration.

Other benefits of carsharing include being able to choose from a wide variety of vehicles for each trip, whether that’s an MPV for a family day trip or a van for moving furniture. It’s great for those who appreciate the perks of a car but don’t need to drive every day.

Read to find out more about whether carsharing is the right fit for you. If it’s a match, why not give us a shot?

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.

(Featured photo: The Business Times)

Found a car you’d like to drive? Download GetGo now, book your ride, and pay only for what you use — we take care of maintenance, insurance, and even petrol!

See you on the road,
Luna 🛣