Owning a car in Singapore is an expensive affair, largely thanks to high COE prices. For comparison’s sake, a brand new Volkswagen Gold TrendLine 1.4 costs $114,000 in Singapore, $30,000 in the UK and $15,600 in India.
Yet, there are still cars on the road, proving that buying a car is not impossible. So why exactly are car prices in Singapore high, and, if you really want to drive a car, what options do you have?
- Why are Singapore car prices so high?
- How are COE prices determined?
- Sample prices of popular Singapore car brands
- Buying a used car – how much can you save?
- Car leasing – how much can you save?
- Car sharing – how much can you save?
- Don’t forget the ongoing costs of owning a car
Why are Singapore car prices so high?
The simple answer is that land is scarce. If cars were cheaper, we’d be like drivers in LA who reportedly spend 102 hours every year stuck in traffic.
A car that starts out at $19,700 ends up costing $96,000, thanks to the different components that make car prices high, chief of all being the Certificate of Entitlement (COE).
Let’s see the breakdown for a Toyota Corolla Altis 1.6 Standard, one of the more popular sedans in Singapore:
1. Open Market Value (OMV) – $19,700
OMV is assessed by Singapore Customs and takes into account the purchase price, freight cost, insurance, and incidental charges related to the sale and delivery of the car from the country it was manufactured in to Singapore.
Basically, it is the cost of a car before taxes, entitlement and top-ups. The latest (August 2018) OMV for the Toyota Corolla Altis is $19,700.
2. Registration Fee (RF) – $220
3. Additional Registration Fee (ARF) – $19,700
The registration fee is small change compared to the additional registration fee (ARF). The ARF is calculated based on the OMV of the car:
|Vehicle OMV||ARF Rate|
This means that the more luxurious your ride is, the higher its ARF.
4. Excise Duty – $3,940
A car falls under the one of the four categories (alcohol, cigarettes, motor vehicles, and petrol and biodiesel) that are liable for excise duty. The Singapore Customs charges the excise duty of a car at 20% of its OMV. Your Toyota’s excise duty is hence $3,940.
5. Goods and Services Tax (GST) – $1,654.80
A car’s GST (7%) is taxed on both the OMV and the Excise Duty, bringing it to $1654.80.
6. Certificate of Entitlement (COE) – $31,997
See the next section for more about COE.
7. Vehicular Emissions Scheme (VES) – varies
The government incentivises you to buy eco-friendly cars by giving rebates. Since 1 January 2018, all new cars, taxis and newly imported used cars registered are assessed based on their emission of 4 pollutants: hydrocarbons (HC), carbon monoxide (CO), nitrogen oxides (NOx) and particulate matter (PM).
If your emissions are within bands A1 and A2, your VES rebate will be $20,000 and $10,000, respectively. The money will offset the ARF you have to pay. In the case of the Toyota Corolla Altis, if you’ve been very good:
$19,700 (ARF) – $20,000 (VES rebate) = -$300
This doesn’t mean you get back $300, though. You still have to pay a minimum ARF of $5,000 (instead of $19,700) because the ARF lets you get money back when you de-register your car early.
If you’ve been naughty and fall under bands C1 and C2, then you have to pay a VES surcharge of $10,000 and $20,000 on top of your ARF.
8. Local dealer’s margin
Car dealers add a margin to cover costs and make a profit, about 15% for affordable brands and up to 50% for luxury brands.
|Components of a car’s purchase price||Amount|
|Dealer’s margin (25%)||$19,008.20|
Aside from the $96,000 listed as the purchase price of the car, but there are also other costs involved:
In-vehicle Unit fee – $150
Buying and fitting the in-vehicle unit costs $150. This little device is placed at dashboard of all Singaporean vehicles and is used to pay ERP and other parking charges.
Licence plate number – $1300, optional
If you want to your old licence plate number, it costs $1,300 to transfer to your new car. The good thing is that you only need to do it once.
If you want to bid for a specific license plate number, you need to go through a bidding process. But warning: It can be even more expensive as the car itself. To give you an idea, a huat number like SGD8888Z is currently going for $238,888.
Car loan – $13,077 in interest
To pay for your car, you’ll likely be taking out a car loan. Depending on the OMV of the car, you can borrow up to 60% or 70% of the purchase price.
|Open Market Value (OMV)||Maximum car loan|
|Up to $20,000||70% of the purchase or valuation price|
|More than $20,000||60% of the purchase or valuation price|
Our Toyota Corolla Altis’ OMV is less than $20,000, so we can borrow 70% of $96,000 = $67,200 for a maximum of 7 years. If we take UOB’s Car Loan, which charges an interest rate of 2.78%, our monthly installment is $956. The total amount paid on loan is $80,277, meaning that the amount paid in interest is $13,077.
For more about car loans in Singapore, read Car Loan in Singapore – Guide to Financing Your Car in Singapore (2018).
Some good news… you get some money back via the COE Rebate or the PARF rebate.
If you de-register your car before the 10 years of your COE are up, you will get a refund of sorts for the time on your COE not used based on this formula: (QP paid x months left on COE) ÷ Total months bought by COE. If you drive the car for 10 years, you don’t get a COE rebate.
The Preferential Additional Registration Fee (PARF) rebate is what you get back from your ARF. The rebate is between 75% and 50% of your ARF. If you scrap your car at the end of 10 years, you get 50% of your ARF back: 50% x $19,700 = $9,850.
If you want to know more about scrapping your car, you can get a third-party service, such as Motorist.sg to help you.
How are COE prices determined?
COE is the right to register, own and use a vehicle in Singapore. It lasts for 10 years and constitutes a large part of the exorbitant price tag on your car.
COE prices fluctuate based on market demand. The more people bid, the higher the COE prices.
Each month, dealers (unless you want to do it yourself, then it’s a story for another article) bid on the Open Bidding System on the first and third Monday of the month.
There are 5 categories of COE:
- Cat A – car 1,600cc and below with engine power not more than 97kw
- Cat B – car above 1,600 cc or with engine power more than 97kw
- Cat C – goods vehicles and buses
- Cat D – motorcycles
- Cat E – open (any other kind of vehicles)
The COE for Toyota Corolla Altis, a Cat A car, costed $31,997 in August 2018’s 2nd bidding (second Monday of the month). This cost is factored into the price of the car – what you see listed on car mart sites or Classified print ads.
Sample prices of popular Singapore car brands
In Singapore, Japanese car brands such as Honda and Toyota lead the market. Other Asian brands such as Hyundai and Kia are also popular. For intercontinental cars, Singaporeans love Mercedes, BMW and Audi. Here are some sample prices:
|Honda Civic 1.6||$95,999|
|Honda City 1.5 V (A)||$78,999|
|Honda Jazz 1.3 (A)||$72,999|
|Toyota Corolla Altis Standard (A)||$89,988|
|Toyota Camry 2.0 (A)||$132,988|
|Hyundai Elantra 1.6 GLS (A)||$72,999|
|Kia Cerato 1.6 EX (A)||$79,999|
|Mercedes-Benz A-Class 2018||$139,888|
|Audi A4 2.0 TFSI S tronic (A)||$166,980|
|BMW 5 Series 520i SE (A)||$190,888|
Buying a used car – how much can you save?
A second-hand anything will always be cheaper than a brand-new one. Cars are the same. The question is: how much cheaper and is it really worth it?
A Toyota Corolla Altis with about 8½ years left (registered in Feb 2017) was going for $67,777. Let’s compare this with the new Toyota Corolla Altis to figure out if going for a slightly older, used car is worth your while.
Clearly, a used car can be a lot cheaper. But before you rush out to get one, read Everything You Need to Know About Buying a Second-Hand Car in Singapore because price aside, you have to consider maintenance costs and rate of depreciation.
Car leasing – how much can you save?
Unless you only want to use the car for a day or two, it’s not worth it to rent for the long term due to its high depreciation rate.
To get more bang for buck, consider leasing for a longer period. The car rental rate for a Toyota Altis is $70 per day and $1,500 a month for a long-term lease (at least a year).
But even when you rent on a monthly basis, it is still more expensive than paying for the monthly installment of a brand-new car (around $956 for our Toyota Corolla Altis, as calculated previously). You don’t get any PARF or COE rebates either at the end of it as well.
Car sharing – how much can you save?
Car sharing is pretty new here. You basically “rent” the car for ultra-short periods of time – mere hours – and you only pay for what you use (based on time used and distance travelled). You also don’t have to go to the company to pick up or drop off the car.
Instead, you pick up shared cars from various neighbourhoods across the island. Pretty convenient if you need to go to many places within your car-sharing period.
|Car-sharing company||Price||Cars and stations|
|BlueSG||$15/month (for a year)||BlueSG’s electric cars can be found at 100 over charging kiosks, where you can unplug them with your ez-link card.|
|CarClub||$11 for 1st hour and $2.25 for every 15 minutes thereafter||260 over cars at 110 over designated stations.|
|Tribecar||From $2.14/hour||220 over cars. No fixed stations. Unlock a car via the web app and drive immediately.|
|Smove||$50 for 3 hours||80 over designated stations.|
|WhizzCar||From $13 for 1st hour + $5.97 next half hour||170 cars. No fixed stations. Unlock cars with a personal key fob that will be delivered upon membership application.|
Do note that some of the car-sharing companies charge a membership fee, which is between $10.70 (WhizzCar) and $210.70 (CarClub).
Don’t forget the ongoing costs of owning a car
Owning a car is expensive, no matter how you look at it. Aside from the car price, there are also ongoing costs:
1. Road tax
You can choose to pay your road tax every 6 months or 12 months. Road tax for COE cars, or cars that are older than 10 years is more expensive.
Road tax for the 1.6-litre engine of the Toyota Corolla Altis we were discussing earlier will cost $744 a year.
Insurance is a must for all vehicles in Singapore. If you’re a safe driver, you’ll pay between $773 and $1,156.38 a year for insurance. Need more information? Read our guide on the car insurance policies available in Singapore.
Parking is an ongoing cost of owning a car that you cannot avoid. HDB season parking costs between $90 and $120 a month depending on whether it’s kerb-side or sheltered parking.
Here’s an estimate of how parking fees are like in Singapore:
|Building||Weekdays (after 5-6pm)||Weekends|
|Vivocity||$3.00/entry from 6pm to 4am the following day$2.50/entry from 4am to 7am the following day||$1.40 for 1st hr, $0.70 for next subsequent 30min from 7am to 6pm
$3.50/entry from 6pm to 4am the following day
$2.50/entry from 4am to 7am
|Sun Plaza||After 5-6pm $2.68/entry||$1.39 for 1st hr, $0.75 for subsequent 30min from 7am to 4.59pm|
|Marina Bay Sands||$7.49/entry from 7pm to 7am the following day from Mon-Thurs||$8.56 for 1st hr, $1.07 for next subsequent 30min up to a maximum charge of $27.82/24hr from 7am to 7pm, $8.56/entry from 7pm to 7am the following day from Fri to Sun|
|Hard Rock Hotel, Sentosa||$6.00/entry from 7pm to 7am the following day from Mon to Thurs||$8.00 for 1st hr, $2.00 for next subsequent 30min from 7am to 7pm, $8.00/entry from 7pm to 6.59am the following day from Fri to Sat and eve of PH|
In Singapore, the downtown and city center are guarded by ERP gantries, which scan the IU of your vehicle and charges ERP fees to your cashcard. The rates are dependent on where you are as well as what time you are driving.
For instance, driving on Bayfront Avenue towards Raffles Avenue will incur ERP charges of $0.50 between 6pm to 6.05pm and $1 from 6.05pm to 6.55pm.
On weekends, ERP charges are more expensive. On the same route, it will cost $1.50 to pass through from 6.30pm to 6.35pm and $2 from 6.35pm to 7.55pm.
Petrol cost is something that you have to factor in monthly.
Just as an estimate, the same Toyota Corolla Altis has a fuel consumption of 16.3km/l. Considering that the average private car travelled 16,700 kilometres per year, that works out to be around 86 litres per month, which means that the monthly petrol cost is around $202 per month.
The cost of petrol will obviously change a lot depending on your car usage – whether you are a private-hire car driver, or just use your car on the weekends only.
6. Maintenance and servicing of your car
Car owners need to get their cars serviced every 6 months or 10,000 km. If there are no extra work to be done (fingers crossed), it costs about $250 per visit. Roughly, that will cost you $500 a year.
Of course, you will need to shell out more money for repairs if you run into any accidents (choy). Get comprehensive auto insurance to safeguard yourself.
In sum, the minimum monthly and yearly cost of owning that Toyoto Corolla Altis could look like this. Do take in mind that we’ve used the lowest estimates and have not factored in parking at expensive places and any ERP charges that you will incur for passing through city areas during high peak hour.
|Cost||Per month||Per year|
Do you spend more or less than what we have estimated on your car? Leave a comment below!