What’s the Average Cost of Car Ownership in Singapore?

Owning a car in Singapore is an expensive endeavour, with many costs involved that go beyond its sticker price. Think the Certificate of Entitlement (COE), road tax, and much more. One COE in 2024 can easily set you back anywhere from S$70,000 to S$100,000, depending on the vehicle you’re buying (with the exception of motorcycles).

Because of how small Singapore is, the government has found it necessary to limit the population of cars here. The high cost is meant to prevent excessive ownership of vehicles and keep traffic flowing as smoothly as possible.

If you absolutely need to buy a brand new car, we’ll break down the various costs you’ll encounter so that you can be as prepared as possible before you take on this significant financial commitment.

1. Purchase Price

According to statistics from the Land Transport Authority, Toyota registered 3,857 cars as of end-2023, making it the most popular car brand in Singapore. For demonstration purposes, we’ll be using the standard version of its Corolla Altis sedan for this article. It has a 1,598cc engine capacity, and consumes 6.5 litres of fuel per 100km driven.

As of mid-May 2024, Toyota lists an estimated price of S$160,388 for the car. This includes its COE, Registration Fee (RF), Additional Registration Fee (ARF), Excise Duty, and first road tax payment.

What’s more, depending on the car’s carbon emissions, it may also be subject to an enhanced Vehicular Emissions Scheme (VES) surcharge or rebate. As of mid-May 2024, the surcharge ranges from S$0 to S$25,000. Ditto for the rebate you stand to receive.

2. Registration Fees and Taxes

As stated above, when you purchase a new car, the listed price usually includes a number of fees and taxes. In addition to the S$350 RF, you’ll also have to fork out a sum of money for the ARF.

This scales up based on the open market value (OMV) of your car and is calculated according to the following structure, as of mid-May 2024:

Source: Land Transport Authority

The ARF, which is equivalent to or pricier than the actual OMV of a car, is a significant expense. However, car owners do have the opportunity to recoup the ARF’s cost if they de-register their car before it turns 10 years old through the PARF rebate system.

In the Toyota Corolla Altis’ case, its OMV is S$19,584 right now. This means that its ARF is S$19,584 as well.

Furthermore, every car buyer must also pay an Excise Duty that is 20% of the car’s OMV in addition to the usual Goods & Services Tax (GST) of 9%. For the Toyota Corolla Altis, the cost of its Excise Duty is therefore S$3,916.80.

Finally, Singapore encourages the purchase of environment-friendly vehicles by offering rebates on cars with particularly low carbon emissions and applying surcharges on cars with particularly high carbon emissions under the enhanced VES.

Depending on the car, the enhanced VES could decrease or increase its price by up to S$25,000, as stated above.

Road Tax

Another set of taxes that car owners face is the road tax, payable by all owners of Singapore-registered vehicles every six months.

The road tax amount you need to pay depends on the engine capacity of your vehicle. As your car’s engine capacity increases, the amount you have to pay increases, making this essentially a tax on your fuel usage.

You’ll also need to pay a road tax if you drive an electric car (EV). For demonstrative purposes, the road tax for petrol vehicles is calculated as follows:

For a Toyota Corolla Altis, a 6-month road tax would therefore be S$370.86.

These registration fees and taxes aren’t the only costs you need to take into account. There are other costs, with many being recurring and mandatory. These include insurance premiums, loan repayments, maintenance costs, and more, which we’ll explain below.

3. Car Insurance Premiums

How much you need to pay for your annual insurance premiums depends on a variety of factors that insurance companies consider pertinent to the risk you pose of getting into a car accident and filing a claim.

These factors can include your gender, age, driving experience, qualification for a No Claim Discount (NCD), and your occupation as well.

Generally, however, the average annual cost of comprehensive car insurance for a male driver in his 40’s is about S$1,642 with a 0% NCD (or S$854 for the same drivers but who have a 50% NCD), according to a ValueChampion study.

4. Car Loan Repayments

If you took out a car loan to finance the purchase of your automobile, another cost you’ll need to bear in mind is your monthly car loan repayments. Let’s use an example to see how much this might cost you.

Assuming you took out an S$80,000 loan (50% of the Toyota Corolla Altis’ price) with a tenure of five years at an interest rate of 2.75% p.a., you’ll have to pay a total of approximately S$1,516 every month.

Do note that the maximum loan tenure you can select for a car loan is seven years, as mandated by the Monetary Authority of Singapore.

5. Maintenance and Miscellaneous Costs

Throughout your car’s life, you will also need to pay the recurring cost of regular maintenance to keep your car working as it should.

Servicing costs vary depending on the mileage of your vehicle, its engine capacity and whether it’s a luxury vehicle or not. For reference, servicing a Toyota Corolla Altis would cost around S$600 to S$700 over the course of one year for two servicing appointments.

To get the most out of your car during its 10-year tenure and minimise the likelihood that it breaks down – resulting in an even larger outlay of funds – it is in your best interest to pay for regular servicing along the intervals recommended by its manufacturer.

Often, maintenance is recommended either every 10,000km driven or every six months, whichever comes first. Most Singaporeans drive under 20,000km per year, so for most of us, it will likely be the latter.

In addition to the above costs, drivers in Singapore also need to pay continually for petrol and parking, like drivers anywhere else in the world.

A Toyota Corolla Altis gets an average of 15.4km per litre of petrol. Given that 95-RON petrol prices are currently around S$2.97/litre, driving 15,400km in a year with this car would set you back around S$2,970.

Drivers in Singapore are required to pay road tolls on a daily basis as well, much like in any other country. Through the country’s Electronic Road Pricing (ERP) system, drivers are required to pay for driving on congested roads during peak hours.

Singapore controls traffic congestion in the city through this automated electronic toll system. It charges drivers more during peak hours and in areas that tend to become highly congested. This encourages drivers to drive at less highly-trafficked times and to take quieter routes. Additionally , it discourages unnecessary driving. It also encourages the use of public transport and helps Singapore manage pollution levels.

According to the Asian Development Bank, there were 77 ERP gantries or control points, in Singapore located at all roads leading into Singapore’s central business district and along highly-used expressways and roads as of 2023.

Though it is difficult to estimate the average amount a typical driver will need to pay, this is a recurring and daily cost every car owner here will need to be prepared to pay.

The LTA has a calculator on its website where you can check the ERP rates for your type of vehicle on the roads you use most frequently.

In Closing

This guide has clearly highlighted how expensive owning a car in Singapore is. The price of an automobile itself combined with its COE results in an already high cost, but it only gets worse when you add on taxes, recurring costs, and other charges.

With that said, there are instances which an individual would absolutely need a personal vehicle. Professionally, they might be in a sales department which involves multiple client visits daily with samples in tow. On a personal level, they might need to ferry children and senior citizens around frequently.

Ensure that your monthly budget has space for a car if you genuinely need it. If it doesn’t, do think about boosting your income streams or even sharing it with a family member. Additionally, with the right credit card in hand, you can take the sting out every time you head to the petrol pump. We’ve compiled the best ones in Singapore, and you can conveniently compare each card and apply for them once you’ve made up your mind!

Ready to purchase a car? Be sure to check out the best car insurance plans and best car loans in Singapore before taking the plunge!

Read More:

• What Determines Your Car Insurance Premium?
• Your Essential Guide to Buying a Used Car in Singapore
• The Best And Worst Ways To Use a Personal Loan
• Going Green: The Car Owner’s Guide to Buying an Electric Vehicle (EV)
• Car Subscription vs Car Ownership: Which Is More Affordable?

Cover image source: Unsplash