By now, you may think you already have enough resources to finally get your own car. Well and great! That manifests all the hardwork and discipline that you’ve mustered over the years. But before visit your local bank to discuss about your car loan, we highly suggest you consider the actual cost of owning a vehicle in Singapore first.
In this time and age where the cost of living is unceasingly going up, is it still practical to actually buy your own car? Will your budget for expenses still leave you an ample amount of cash to take care of your other priorities?
Here’s a comprehensive breakdown before you decide to take this significant financial leap!
Disclaimer: You may want to sit down and hold on tight for this.
To set the context, let’s bring in an entry-level. Let’s say, a Toyota Corolla Altis, which currently costs $95,000.
But what makes up the final price of cars and why are they so expensive?
- Open Market Value (OMV)
- Excise Duty
- Additional Registration Fee (ARF)
- Certificate of Entitlement (COE)
- Dealer’s Commission
OMV is determined by Singapore Customs as the vehicle enters the country. This includes purchase price, shipping fee, and other prices paid for during import.
Excise Duty is collected by Singapore Customs and is calculated as 20% of the vehicle’s OMV.
ARF is collected upon registration of the vehicle. It is also calculated as a percentage of a vehicle’s OMV. As of now, any OMV up to $20,000 is subject to ARF of 100% OMV.
For a vehicle to be allowed to be driven in Singapore, a COE must be obtained. This depends on the supply and demand of cars. A COE typically costs around $40,000 that you can use for a 10-year period.
Lastly, the dealer’s margin. This covers the cost of agent’s and his or her own profit. This typically goes between 15% to 50% of the costs stated above.
Buyers rarely consider paying a car in full. So, unless you’re doing that, interest is something you can’t get away with.
In a nutshell, interest rates work like this: larger amount of loan + longer loan term = higher interest rate.
Let’s say for the $95,000 cost of a Toyota Corolla Altis, you pay 30% as your down payment and borrow the rest of 70%. At an interest rate of 3% and a loan term of 7 years, you will incur a total interest of $13,965.
All vehicles in Singapore are required to carry a valid Road Tax at all times. This can range from a couple of hundreds to a few grands depending on the engine capacity of your car.
One thing you should know, it is mandatory to obtain a car insurance for vehicles in Singapore. The cost you’ll pay depends on your age, driving experience, the coverage you’re interested in, and the car you own. Assuming this is your first car, you will shell out roughly around $1,500 per year for the insurance.
You can’t drive without pumping a gas, can you? A full tank of gas for a Toyota Corolla Altis would typically cost around $100 after discounts on petrol card and credit card together.
MAINTENANCE & OTHER COSTS
Aside from all these, you still have to spend on recurring costs to ensure your vehicle runs smoothly as it should over the course of time. Typically, regular servicing on an interval of 10,000 km or every six months is recommended. This may cost around $600 for two appointments in one year.
You see, it is true what they say that Singapore is one of the most expensive countries to own a car in. Aside from these, you still have to think about parking fees and ERPs.
Now that you’ve seen this, let us give you a better option if you really want to start driving your own car.
Services such the ones we offer here at Work Work Cars allow you to drive your dream car, without commitment, taxes, and other miscellaneous costs. Why rent?
- No commitment. Rent for as short as 1 day or as long as 10 years. Start driving without the fear of commitment!
- No taxes. COE? Road tax? No need to worry about that. We take care of it, for you.
- Service cost on us. Fret not about the maintenance cost, that’s on us as well!
- With comprehensive insurance. Every rented vehicle comes with a comprehensive insurance cost—another less on your expense!
If you really want to start driving your own car, renting one is the most practical option in this day and age. No commitment, no frills. Now you can go and start browsing. Head here to checkout our car models!
If you know any other practical driving tips, please do share it with all of our readers by commenting it down below. Also, don’t forget to follow us on our social media accounts to get first dibs on more posts like this!