Are you considering buying a car in Singapore? It’s important to understand the costs involved before making a decision. Owning a car in Singapore can be expensive due to the high taxes and fees associated with car ownership. In this article, we’ll break down the costs of buying and owning a car in Singapore, so you can make an informed decision.
When it comes to buying a car in Singapore, there are several costs to consider. These include the Open Market Value (OMV), Additional Registration Fee (ARF), Excise Duty and Goods and Services Tax (GST), Certificate of Entitlement (COE), and the dealer’s margin. The OMV is the price of the vehicle before taxes and fees, while the ARF, Excise Duty and GST are calculated based on the OMV. The COE is a quota system that allows car buyers to bid for the right to own and use a vehicle for 10 years.
Financing and managing your car budget is also an important aspect of car ownership in Singapore. Car loans are available from banks and financial institutions, but it’s important to keep in mind that the amount you can borrow is limited by the OMV of the vehicle. In addition to the purchase price and loan payments, you’ll also need to budget for ongoing expenses such as petrol, maintenance, and road tax. By understanding these costs, you can make a realistic budget for car ownership in Singapore.
Key Takeaways
- Owning a car in Singapore can be expensive due to high taxes and fees.
- The costs of buying a car in Singapore include the OMV, ARF, Excise Duty and GST, COE, and dealer’s margin.
- When financing and managing your car budget, it’s important to consider ongoing expenses such as petrol, maintenance, and road tax.
Understanding Car Ownership Costs in Singapore
If you are planning to buy a car in Singapore, it is important to understand the costs associated with car ownership. Owning a car in Singapore can be expensive, but it doesn’t have to be unaffordable. In this section, we will break down the initial purchase expenses and ongoing ownership costs that you need to consider when buying and owning a car in Singapore.
Initial Purchase Expenses
When buying a car in Singapore, you need to consider the following initial purchase expenses:
- Certificate of Entitlement (COE): This is a quota license that gives you the right to own a car in Singapore. The COE prices are determined by demand and supply and are auctioned every month. As of February 2024, the COE prices for Category A (cars with engine capacity up to 1600cc and maximum power output not exceeding 97kW) is $83,385.
- Open Market Value (OMV): This is the price of the car before taxes and other charges. The OMV is used to calculate the Additional Registration Fee (ARF) and the Excise Duty.
- Additional Registration Fee (ARF): This is a tax that is imposed on the OMV of the car. The ARF is calculated based on a tiered system, with higher-priced cars paying a higher percentage of the ARF. The ARF for a car with OMV of $20,000 is 100% of the OMV, while the ARF for a car with OMV of $50,000 is 140% of the OMV.
- Excise Duty: This is a tax that is imposed on the OMV and ARF of the car. The Excise Duty is calculated based on the engine capacity and emission levels of the car.
- Goods and Services Tax (GST): This is a tax that is imposed on the OMV, ARF and Excise Duty of the car. The GST rate is currently 7%.
Ongoing Ownership Costs
After you have purchased your car, you need to consider the ongoing ownership costs. These costs include:
- Road Tax: This is a tax that is imposed on all vehicles in Singapore. The road tax is calculated based on the engine capacity and emission levels of the car.
- Insurance: All cars in Singapore must have insurance. The cost of insurance depends on the age and driving experience of the car owner, as well as the make and model of the car.
- Petrol: The cost of petrol in Singapore is high, and it is one of the biggest ongoing costs of owning a car. The cost of petrol depends on the make and model of the car, as well as the driving habits of the car owner.
- Maintenance Costs: Regular maintenance is necessary to keep your car in good condition. The maintenance costs depend on the make and model of the car, as well as the age of the car.
- Parking: Parking in Singapore can be expensive, especially if you live in the city centre. The cost of parking depends on the location and duration of the parking.
Overall, the total cost of owning a car in Singapore depends on various factors such as the make and model of the car, the COE prices, insurance premiums, and ongoing costs such as petrol and maintenance. However, with proper planning and financing, owning a car in Singapore can be affordable and convenient compared to relying on public transport.
Financing and Managing Your Car Budget
Buying a car in Singapore can be a costly affair, but with the right financing options and budgeting, it can be a wise investment for your vehicle ownership needs.
Choosing the Right Financing Option
When it comes to financing your car, there are several options available. You can choose to take out a car loan from a bank, financial institution or online finance companies. These options offer different interest rates, loan tenures and repayment options. It is important to do your research and compare different car financing options to find the one that best suits your budget and needs.
Budgeting for Your Dream Car
Before you start shopping for your dream car, it is important to set a budget and stick to it. This will help you avoid overspending and ensure that you can comfortably afford your car payments. Consider all the costs associated with owning a car, including registration fees, wear and tear, auto servicing, parking rates, and electronic road pricing (ERP) fees.
For example, if you are looking at purchasing a sedan like the Toyota Corolla Altis or Mazda 3, you can expect to pay around $80,000 to $100,000. Kee Yong Auto is a reputable car dealership that offers a range of financing options to help you manage your budget.
When budgeting for your car, it is important to factor in not just the cost of the car itself, but also the additional costs associated with owning a car in Singapore. This includes the Goods and Services Tax (GST) and registration fees.
In conclusion, buying a car in Singapore is a necessity for many, but it can also be a convenience if you choose the right financing option and budget wisely. With the right planning and research, you can find the perfect car for your needs and enjoy the benefits of vehicle ownership.
Frequently Asked Questions
What’s the average cost of a car in Singapore including COE?
The average cost of a car in Singapore including COE is around $100,000 to $150,000. However, this price can vary depending on the make and model of the car, as well as the current COE prices.
Can you tell me the cheapest way to get a car in Singapore?
The cheapest way to get a car in Singapore is to purchase a second-hand car. Second-hand cars are generally cheaper than new cars and can be a great option if you’re on a budget. You can also consider renting a car or using car-sharing services if you only need a car occasionally.
How much do you need to earn to afford a car in Singapore?
To afford a car in Singapore, you’ll need to have a monthly income of at least $4,500 to $6,000. This will allow you to comfortably pay for the car loan, insurance, and other associated costs.
What’s the typical downpayment required for a car purchase in Singapore?
The typical downpayment required for a car purchase in Singapore is 30% of the car’s purchase price. This means that if the car costs $100,000, you’ll need to make a downpayment of $30,000.
What are the costs involved in owning a second-hand car in Singapore?
The costs involved in owning a second-hand car in Singapore include the purchase price of the car, transfer fees, road tax, and insurance. You’ll also need to factor in maintenance and repair costs, which can be higher for older cars.
Could you explain the 10-year car rule in Singapore and its impact on costs?
The 10-year car rule in Singapore states that cars can only be used for a maximum of 10 years before they need to be scrapped or exported. This rule has a significant impact on the costs of owning a car in Singapore, as it reduces the resale value of older cars and means that owners need to purchase a new car every 10 years.