For any Singaporean, the idea of owning a vehicle is enough to trigger a shudder. For others, it’s stuff for nightmares. Regardless of what report or study you check, the country still has some of the highest costs of car ownership.
But how much does a car owner truly pay by driving a vehicle in the city-state? Why does it still matter to drive one even if it means opting for a car rental in Singapore?
Excessive Car Ownership Costs
Even if a vehicle comes from the same manufacturing plant, their prices can still vary once they arrive at different destinations. Logistics, fees, and taxes, among others, can either bring the costs down or up.
In Singapore, cars generally have an insanely high price tag. For example, a Nissan Leaf could cost about 137,800 SGD or over $100,000 (December conversion). In the United States, its starting price can be as low as $31,000.
Meanwhile, budgetdirect.com.sg revealed that compact cars in the country sold for 98,920 SGD or roughly $75,000 in 2018. Although this was already a huge decrease from its price tag in 2012, US compact cars like Jetta still sell more cheaply. You can buy one for around $18,000.
Besides the actual cost of the vehicle, a car owner also needs to spend on the following:
1. Insurance — According to Moneysmart.com.sg, the cheapest auto insurance can set you back for 850 SGD annually. You are more likely to spend more if you’re a new young driver. Like in other countries, the more complex the vehicle is, the more you end up paying a higher premium. One of the common reasons is the difficulty of finding replacement parts.
2. Fees — You pay many fees when you buy a car in the country. Two of the most popular ones are the certificate of entitlement (COE) and the additional registration fee (ARF).
The COE essentially means you can own and drive a car in Singapore, and you get it if you win in the bidding exercise. It isn’t cheap. Depending on the category your prospective vehicle belongs to, it can be as much as 40,000 SGD. The good news is you can keep it for the next 10 years, after which you have the option to de-register or renew it.
As its name suggests, ARF is in addition to the regular registration fee you pay. It is a portion of the open market value of the vehicle. If you’re registering a car, it will be 100% for the first 20,000 SGD, 140% for the next 30,000 SGD, and 180% for any remaining amount over 50,000 SGD.
Besides these fees, car owners pay for excise duty, which is 10% of the OMV, and road tax. For those who bought a pre-owned vehicle, an extra $10,000 used-car surcharge is added to the total cost.
But Why Do You Still Need a Car in Singapore?
With all these costs, it seems driving a car in Singapore is absurd. Besides, the country has one of the best transport systems in the world. It may not make sense unless you’re an entrepreneur.
Business owners should consider having a vehicle for the following reasons:
- Rush hours mean long queues, overcrowding, and cramped trains. Not only can it be a waste of time, but you are also less likely to look desirable after a ride.
- Appearances matter, and first impressions do last. They can land you the deal of a lifetime or provide you with your most coveted job. Cars can make you look professional, trustworthy, and successful.
- You have options. Today, Singapore has plenty of car lease companies that can give you modern, well-taken-care-of vehicles that you can self-drive. You can also hire it over short- or long-term, so you have more control over your spending.
In Singapore, owning a vehicle is difficult and expensive. But there are also some reasons to consider it seriously. And if you want it, you have options.