Owning cars in Singapore is expensive, considering that Singapore is one of the most expensive cities in the world. Nonetheless, having a car brings about much convenience, especially if you have a family. In this article, The Ultimate Guide to Buying a Car in Singapore, we break down the various costs of owning a car to better prepare you financially, while providing some saving tips along the way.

The Ultimate Guide to Buying a Car in Singapore

1. Average Cost of Car Ownership in Singapore

On average, owning a car all in all costs around $180,000 to $200,000 over a period of 10 years. This is considering the costs of buying the popular Honda Civic 1.6 car in Singapore, and the costs to own and maintain the car over 10 years. Buying the car on its own costs around $100,000 to $120,000.

2. Cost of Getting a Driving License in Singapore

Getting a driving license in Singapore costs around S$2,000 and above, dependent on the number of lessons and attempts to pass the test. Refer here for more information on the driving centres and signing up for theory and practical tests.

3. Cost of Buying a Car in Singapore

With Singapore being a small island country, measures are taken to control the demand for cars. Thankfully for these measures, otherwise we will be facing traffic jams as bad as those in Manila and Jakarta. There are 6 main factors that determine the cost of buying a car in Singapore:

Registration Fees
Open Market Value (OMV)
Additional Registration Fee (ARF)
Excise Duty & GST
Certificate of Entitlement (COE)
Vehicular Emissions Scheme (VES)
Dealer’s Margin

1. Registration Fees

As per the regulations of the Land Transport Authority (LTA), a registration fee of $220 is collected upon registration of your car.

2. Open Market Value (OMV)

Open Market Value (OMV) is assessed by the Singapore Customs. OMV is basically the base price of the car. Expect to pay approximately $100,000 for a sedan, and $190,000 for a luxury car in Singapore. As of December 2019, the Honda Civic 1.6, one of the most popular cars in Singapore, retails at $100,999, while the Mercedes-Benz C 180 retails at $190,888.

3. Additional Registration Fee (ARF)

All cars in Singapore are subjected to the Additional Registration Fee (ARF), a form of tax imposed upon registration. The tax is based on the OMV of the car as follows:

Vehicle Open Market Value (OMV)	ARF Rate Payable (% of OMV to pay)
First $20,000	100% of OMV
Next $30,000 (i.e. $20,001 to $50,000)	140% of OMV
Above $50,000	180% of OMV

4. Excise Duty & GST

Excise duty is a tax collected by the Singapore customs. The current excise duty for cars in Singapore is 20% of the OMV. With the excise duty added to the OMV, 7% GST is taxed on both the OMV and excise duty.

5. Certificate of Entitlement (COE)

The Certificate of Entitlement (COE) tax is determined by demand and supply. Having a COE allows you to register, own, and use a car in Singapore for a period of 10 years. There was once where the COE even fell to $1 due to market forces, a steal for some lucky car owners!

COE consists of 5 categories:

CAT A – Car up to 1600CC
CAT B – Car above 1600CC
CAT C – Goods vehicle and bus
CAT D – Motorcycle
CAT E – Open-all except for motorcycle

The applicable categories are A, B, or E. Current COE prices are approximately $33,000 to $36,000. Check out the current month’s COE bid prices here.

Savings Tip: Being patient with the purchasing of COE can help to save thousands of dollars. If you can wait for a few months, ask your dealer to bid only with the amount of your choice for each tender.

6. Vehicular Emissions Scheme (VES)

Vehicular Emissions Scheme (VES) is based on the car’s carbon dioxide (CO2) emission, and emissions of four pollutants – hydrocarbons (HC), carbon monoxide (CO), nitrogen oxides (NOx) and particulate matter (PM).

As per One Motoring, the pollutant with the highest emission value determines your car’s band and corresponding VES rebate or surcharge. Should your car feature a port-fuel injection engine and does not have a PM value, your vehicle will be automatically assigned the maximum VES surcharge band (i.e. C2 of $20,000), regardless of the car’s emission values of the other four pollutants.

Simply put, ensure that your car falls between Band A1 or A2 for most savings! If your car is a pollution machine, expect to pay up to $20,000 surcharge.

7. Dealer’s Margin

The car dealer’s margin can vary from 15% to 50% dependent on car brands. The more luxurious the car, the higher the dealer’s margin.

Savings Tip: Put your negotiating skills to good use with car dealers. Shop around at a couple of different car dealers to know the prices first. Always ask for a discount on the price offered, and negotiate for free accessories. If you do not mind, you can even get a big discount if you opt for the car that they use for test drives.

4. Cost of Owning a Car in Singapore

1. Road Tax

A recurring cost for car owners is the road tax, payable every six months. The amount payable is determined by the engine capacity, age of your car, vehicle and fuel scheme. SGCarMart has a nifty tool here to calculate your road tax. The cost of road tax is around $400 per six months.

2. Motor Insurance

We highly recommend getting comprehensive insurance coverage here, just to play it safe. The cost of motor insurance varies from several factors from gender, age, driving experience, qualification for No Claim Discount (NCD), to insurance companies and more. Comprehensive motor insurance coverage costs approximately $1,400 per year on average.

Savings Tip: Compare car insurance quotes easily with MoneySmart here. If you wish to stay with a particular insurance company but see a lower quote somewhere else, simply try emailing your insurance company the lower rates to ask if they can match it. We tried this out and it worked! You never know if you don’t try!

3. Petrol

Depending on car usage, petrol costs can add up to around $300 per month.

Savings Tip: Get the most discounts via credit cards for the respective petrol stations, which you can apply here at SingSaver. The Citi Cashback credit card offers up to 20.88% fuel savings at Shell and Esso, the UOB One credit card offers up to 24% savings at SPC, while the Standard Chartered Unlimited Cashback credit card offers up to 22.61% fuel savings at Caltex.

4. Car Maintenance

Car maintenance costs depend on the usage of your car, how well you maintain it, and the workshop of your choice. The costs may go up to $1,000 per year.

Savings Tip: Word of mouth is generally the best way to save costs here. Ask your relatives for recommendations on small workshops that they trust, they tend to be cheaper than workshop chain outlets next to petrol stations like those in Shell, Esso etc. We were also having issues with our aircon, and the local workshops recommended us to change our aircon compressor, which is at least a hefty $700. We managed to dodge the bullet by going to an aircon servicing company in Johor Bahru recommended by my cousin (again, word of mouth is really important to avoid getting cheated), and spent only $50 fixing the issue without having to buy a new compressor. Tyres across the causeway are also much cheaper, something to consider if you have relatives or friends in JB to ask.

5. Parking and ERP

Parking fees can vary quite a bit, especially if you drive to work. If you live in a HDB flat, parking will cost ranges from $80 to $110 per month. If you drive to work in the Central Business District (CBD), well good luck to you, season parking can range from $300+ to $400+ per month.

6. Interest on Car Loan

Factor in your interest costs as well should you take up a car loan. Assuming a 7-year loan tenure for a principal loan amount of $70,000 at the prevailing interest rate of 2.78% (as of 24 Dec 2019), the total interest payable can be as high as $13,622.

Savings Tip: Compare your car loans here at MoneySmart for the best deals.

5. Buying a Used Car vs a New Car

If your budget is pretty tight, you might want to consider buying a used car instead of a brand new car. Used cars are generally cheaper than new cars, except when the COE price of the used car is sky high, or if the maintenance costs of the used car gets too high. Be sure to check the mileage of the car and do a thorough inspection of the exterior and interior of the used car. According to Land Transport Authority statistics, the average private car clocked 16,700km. Anything less than this mileage would be a good sign.

Where to Buy Used Cars in Singapore

Here is a list of online car marts to browse for used cars in Singapore:

6. Should I Buy a Car in Singapore?

This ultimately depends on your lifestyle choices and financial commitments. Having a car in Singapore does bring about much convenience, but hey, there’s Grab and GoJek readily available. Plus, public transport in Singapore is fantastic and it doesn’t take too long traveling across the island. Well nothing can compare to those 9-hour drives in the States and Europe. We advise to calculate your finances before determining if you truly need a car.

If you are looking to renovate your home, check out our 10-step Home Renovation Guide + Essential Savings Tips!

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