The Real Cost of Owning a Car in Singapore: A Breakdown
Singapore is known for being one of the most expensive cities to live in, and owning a car is no exception. While the convenience of having a car may seem appealing, there is a high cost associated with owning one in the Lion City. From the initial purchase cost to maintenance costs, taxes, insurance, and fuel, owning a car in Singapore is a significant financial commitment. Let’s break down the real cost of owning a car in Singapore and see the numbers.
The Initial Purchase Cost
The first and most significant cost of owning a car in Singapore is the initial purchase price. In Singapore, car prices are some of the highest in the world due to the taxes imposed on imported vehicles. For instance, a basic Toyota Corolla Altis that costs around SGD 99,000 in the United States will set you back about SGD 122,000 in Singapore. A luxury car like a Mercedes-Benz S-Class, which costs around SGD 96,000 in the USA, is priced at a staggering SGD 361,000 in Singapore. This high purchase cost is due to a combination of registration fees, excise duties, and COE (Certificate of Entitlement) costs.
Certificate of Entitlement (COE) is a necessary requirement for owning a car in Singapore. It is a certificate that grants the holder the right to own and use a vehicle in Singapore for ten years. The COE price fluctuates and is determined by a bidding system with demand and supply conditions. The current COE prices for Cars (Category A) is SGD 37,000 and SGD 52,000 for Cars (Category B). This price is in addition to the base price of the car and must be paid upfront before registering the vehicle.
Registration fees are another cost to consider when purchasing a car in Singapore. The fee for registering a car varies depending on the car’s engine capacity. For example, the registration fee for a car with an engine capacity of less than 1,600cc is SGD 220, whereas it is SGD 1,210 for a car with an engine capacity of more than 1,600cc.
Excise duties, also known as Additional Registration Fee (ARF), is a tax imposed on the car’s Open Market Value (OMV). The higher a car’s OMV, the higher the excise duty. For instance, a car with an OMV of SGD 20,000 has an excise duty of 100%, which means the excise duty will be SGD 20,000. If we take a car like the Mercedes-Benz S-Class, which has an OMV of SGD 211,888, the excise duty will cost SGD 211,888.
In summary, the total cost of purchasing a car in Singapore is the sum of the car’s purchase price, COE, registration fees, and excise duties. The purchase of a car in Singapore can range from SGD 60,000 for a small car to SGD 500,000 for a higher-end luxury car.
Maintenance Costs
After purchasing a car, maintaining it is another critical expense. The maintenance costs of a car depend on the car’s age, make, model, and usage frequency. Here are some of the maintenance costs associated with owning a car in Singapore:
– Insurance: In Singapore, it is mandatory to have auto insurance when owning a car. The cost of insurance depends on factors such as the driver’s age, gender, driving experience, and the car model, among others. On average, car insurance can cost anywhere from SGD 800 to SGD 1,800 per year.
– Road Tax: Road tax is another annual expense to factor in when owning a car in Singapore. The annual road tax depends on the car’s engine capacity and CO2 emission level. For example, the road tax for a car with an engine capacity of less than 1,000cc is SGD 400 per year, while that of a car with an engine capacity of more than 3,000cc is SGD 3,120 per year.
– Servicing & Repairs: Regular servicing and repairs are necessary to keep the car running smoothly and efficiently. These costs vary depending on the make, model, and the car’s age.
Fuel Costs
The final cost associated with owning a car in Singapore is fuel costs. The price of fuel in Singapore is higher than in neighboring countries due to the country’s heavy taxes on fuel. As of October 2021, the price of petrol in Singapore ranges from SGD 2.32 to SGD 2.72 per liter, depending on the fuel grade. According to the Singapore Government, the price of petrol consists of 41% taxes and 59% actual cost.
Conclusion
In conclusion, owning a car in Singapore is an expensive affair. The initial purchase cost, maintenance costs, and fuel costs can add up to a significant amount over time. Singapore’s high taxes and COE system make owning a car out of reach for many people. However, owning a car also offers convenience and mobility, which can be important for some people. Ultimately, the decision to own a car in Singapore should be based on one’s personal preference, lifestyle, and budget.
