Having a car of your own feels like the ultimate level-up in life. You can head out anytime without squeezing onto packed MRTs, avoid waiting endlessly for ride-hailing apps, and take spontaneous weekend trips with your family. The freedom of hopping into your car and heading to East Coast Park or picking up groceries from a late-night supermarket sounds incredibly convenient, right?
It’s no surprise that many Singaporeans dream of car ownership. With our tropical weather and the luxury of air-conditioning at your fingertips, driving offers both comfort and control. But beyond that dream lies a very real and complex web of expenses, some of which might surprise you. So, before you hit the showroom, let’s break down what it really costs to own a car in Singapore.
1. The price tag is just the start
When you look at a car’s listed price in Singapore, remember that it’s only a piece of the puzzle. For example, a small hatchback that might cost S$25,000 overseas could set you back over S$100,000 here.
Why? Because in Singapore, the car price includes many other costs, most notably the Certificate of Entitlement (COE). This COE is a permit that gives you the legal right to own and use a vehicle for 10 years. Depending on demand, COE prices can skyrocket. It’s not uncommon for COE premiums to hit S$100,000 or more, especially for popular car categories.
2. Certificate of entitlement (COE)
The COE system was introduced to control the number of vehicles on our roads. It’s auction-based, and prices can change dramatically depending on demand. Currently, even a Category A COE (for cars up to 1,600cc and 130bhp) can go beyond S$90,000.
This means even if the car’s market value is S$40,000, the total cost after adding COE alone could shoot past S$130,000. Don’t forget that COE only lasts for 10 years, after which you’ll need to renew or scrap your car.
3. Road tax and insurance
Road tax depends on the engine capacity and vehicle type. For example, a 1.6L car might cost you around S$742 annually. Larger cars? Expect to pay significantly more.
Then comes car insurance. This varies depending on your profile (age, driving history, etc.) and the vehicle. A younger driver in their 20s might be paying premiums north of S$2,000 annually. As you get older and your driving record improves, this usually goes down, but it’s still a yearly cost to factor in.
4. Loan repayments and interest
Unless you’re buying your car outright with cash, chances are you’re taking out a car loan. In Singapore, you can only borrow up to 70% of the car’s value (for cars under S$20,000, it’s 60%). The remaining 30–40% has to be paid upfront as a down payment.
Loan interest rates typically range between 2.28% and 3%. Over a 5–7 year period, that adds up. One tip that’s often overlooked: pay off your car loan faster if your finances allow, as it can save you on interest in the long run.
But what if unexpected expenses pop up? Whether it’s for car maintenance, loan top-ups, or insurance renewals, some people turn to a licensed money lender in Singapore to manage cash flow. It’s important to borrow responsibly and always compare terms across providers.
5. Petrol, parking, and ERP
Owning a car means fuelling it, too. Petrol prices fluctuate, but you can expect to spend about S$200–S$400 monthly, depending on how often you drive.
Parking, especially in central areas, is another recurring cost. Season parking in HDB areas starts at S$80/month, but private or central areas can cost much more. On top of that, ERP (Electronic Road Pricing) charges apply when you drive through certain zones during peak hours. These charges can quickly pile up if you’re driving daily into the CBD.
6. Maintenance and servicing
Even the most reliable cars need regular check-ups. Scheduled servicing (every 6 months or 10,000 km) can cost S$150–S$300 per session. Larger repairs, like battery or tyre replacements, can be a few hundred dollars each time.
And don’t forget: once your car is past the 3-year mark, it needs to go for an annual inspection. This ensures the vehicle is still roadworthy and emissions-compliant, which also adds to your yearly costs.
7. Depreciation: The hidden cost
Depreciation is often the most underestimated cost of car ownership. The minute you drive your car off the lot, its value drops. In Singapore, most cars depreciate around S$8,000–S$15,000 annually, depending on make and model.
If you sell the car before the 10-year COE expires, you’ll also get back the Preferential Additional Registration Fee (PARF) rebate, provided the car is under 10 years old. But it still means you’re losing money every year through depreciation.
8. The lifestyle trade-off
When considering all these costs, think about your lifestyle. Could that monthly commitment of S$1,200–S$2,000 be better spent elsewhere, like investing, saving for a home, or supporting your children’s education?
However, if owning a car is necessary for your work or family, it can still be worth it. The key is to plan your finances carefully and not be caught off guard by hidden or recurring expenses.
Conclusion
Owning a car in Singapore is undeniably costly, but not impossible. If you plan wisely, stay realistic about your financial situation, and explore all your financing options, it can be a worthwhile investment in comfort and convenience.
Need a financial boost along the way? Orange Credit is a licensed money lender in Singapore, offering flexible loan options to help you manage big purchases or unexpected bills. Whether you’re covering a down payment or topping up for insurance, we are here to support your journey so you stay on track, no matter the road ahead.
