2 Important Questions to Ask Yourself Before Buying a Car in Singapore

2 Important Questions to Ask Yourself Before Buying a Car in Singapore

It’s no secret that cars cost a bomb in Singapore. But judging by the amount of traffic congestion on local roads, that hasn’t stopped many people from buying them. In fact, Singapore has extremely high car ownership rates for a city, and taking a 5 year loan to pay for a vehicle is exceedingly common.

Clearly, owning a car does not make sense for everyone, and some people are spending unnecessary cash on vehicles they can’t afford. If you’re wondering whether now’s a good time to join the ranks of rabid Singaporean driveres on the road, here are two big questions to ask yourself before you take the plunge.


How much comfort and convenience does it buy you?

While nobody likes to squeeze into sardine can MRT cabins and dodge umbrella-wielding aunties during peak hour, certain groups of people benefit more from car ownership than others. If you live right next door to an MRT station, the added convenience of car ownership will be far less than it will be for a person who has to take a feeder bus to the nearest MRT station.

The following factors can justify a car purchase:

  • If you live in an inaccessible area that’s far away from the nearest MRT station, a car can bring you greater time savings than if you live in an area that’s well-connected by public transport.
  • If you have a large household that can travel together before and after school or work, a car can be a more worthwhile purchase. For instance, if you can drop the kids and your spouse off at school or work on your way to the office instead of spending on a school bus subscription and public transport fees for you and your spouse, that makes your car purchase more cost-effective than if only one member of the family can use it.
  • If you have elderly family members or young children in your household, driving can be a lot more convenient. Strollers and wheelchairs can also be more easily transported.
  • If you often travel after midnight when taxi fares get hit by midnight surcharge, a car purchase becomes more cost-effective.


Do you have an accurate picture of how much car ownership really costs?

No matter how much more convenient it would be to drive than take the bus and MRT, many people in Singapore can’t afford it, plain and simple—or shouldn’t be over-stretching themselves with a hefty car loan.

Obviously, the car salesman is going to do his best to convince you that you can afford a car. But other than the price of the vehicle, there are many expenses that shouldn’t be overlooked, and elsewhere on MoneySmart we discovered that 10 years of car ownership could cost you over $200,000. Here are some factors you need to consider other than the cost of the actual vehicle.

  • Interest – Your monthly car loan installments will include interest payments to the bank or financial institution. Use MoneySmart’s car loan wizard to make sure you’re getting the most affordable loan.
  • Petrol
  • Road tax – Generally about $600 to $700 a year.
  • COE – If you’re buying a second hand car, the cost of the COE will be included in the price of the vehicle.
  • Maintenance – If you’re consistent about servicing your car, you should find yourself paying about $100 a year, give or take a little.
  • Parking – If you intend to drive to work, know that parking in the CBD is often over $300 a month.
  • Car insurance – Car insurance is compulsory and can cost about $3,000 a year without a no-claim discount. Shop around on MoneySmart for the best car insurance deals.

If you’re seriously considering buying a car in Singapore, you’ll have to be prepared for the fact that your finances will be significantly affected. Buying a car without considering the costs is like having a baby just because you think they’re cute.

Would you buy a car in Singapore? Tell us why or why not in the comments!