Let’s face it, buying a car in Singapore is expensive and is one of the top aspirational purchases for many families and individuals.
But it’s pretty hard to deny the benefits of having your very own ride! Driving your own car means having a shorter travel time from place to place. Besides that, you can say goodbye to squeezing in crowded buses or MRTs while commuting.
Plus, you also wouldn’t have to worry about waiting for public transport and the peak hour price surge on taxis or private car booking apps.
While the prestige, freedom and comfort of having your own car are great, ownership comes at a price – it costs a lot of money!
Fortunately, with proper planning and preparation, it’s definitely possible to buy that new shiny car to fetch your family and friends around town.
Dive deep into our guide to buying a car in Singapore to gain a better understanding of how to properly budget and estimate the amount of money to set aside for that sweet ride!
Cost Of Buying A Car In Singapore
When it comes to buying a car, one key thing to note is that the listed price of the car is not the final amount you have to pay.
That means you have to budget beyond the upfront cost so as to be fully prepared to bear the actual costs.
Here’s a list of the main components that you should know about when it comes to buying a car in Singapore.
1. Open Market Value (OMV)
The car’s OMV is based on the actual price paid or payable when it is imported to Singapore.
Assessed by Singapore Customs, OMV includes purchase price, freight fees, insurance and any other chances incurred during the sale and delivery of the car to Singapore.
You can check out some of the average OMVs of commonly-registered car models to get a better understanding of what to expect cost-wise.
2. Certificate of Entitlement (COE)
COE is one of the more commonly thrown around terms when talking about buying a car because it is the most expensive component of the car’s total cost.
It allows a car to be driven in Singapore for ten years.
As it is influenced by the market, COE prices can rise dramatically when there’s a high demand for new models of cars or a low supply for COE.
The latest COE bid prices are available here.
3. Additional Registration Fee (ARF)
The ARF is a form of tax imposed on all cars upon registration. It is determined by the car’s OMV. For the first $20,000 of the car’s OMV, there’s a 100% ARF payable.
For the next $30,000, the ARF payable is 140% of incremental OMV. If OMV is above 50%, the ARF payable is 180% of incremental OMV.
4. Excise Duty & GST
In Singapore, excise duty is a form of tax that is imposed on goods such as cigarettes, alcohol, petrol and cars.
The excise duty on cars is 20% of OMV. After adding the excise duty to the OMV, the total amount is subject to an additional 7% GST.
5. Vehicular Emissions Scheme (VES)
To reduce carbon emissions and pollutants, the government implemented the VES to encourage people to make more environmentally-friendly choices when getting cars.
Depending on your car’s date of registration and the band it falls under based on the emissions scheme, you will either enjoy a rebate or pay a surcharge.
6. Insurance Cost
Several factors play a part in influencing the price of your car’s insurance premium. These include the chosen insurer, your driving experience and the car model.
On average, depending on your age and gender, you can expect to pay around $1,600 to $2,200 annually for comprehensive coverage.
7. Road Tax
As a car owner, you have to pay road tax. You’ll be required to renew it every 6 to 12 months.
8. Maintenance Costs
It is more difficult to determine maintenance costs as it depends on how often you drive, how well you take care of your car and whether it is problematic.
Over time, your car would experience wear and tear and require more major servicing which involves replacing parts such as tires and brake pads.
For example, a Honda Civic’s general maintenance will cost around $370 according to Honda’s official website.
On top of that, you would also be spending on petrol and parking which could easily exceed $280 every month.
3 Simple Steps To Buying A Car
Now that you’re aware of the cost of buying the car, here’s what you need to know about the process!
1. Decide On If You Want A New Or Used Car & View Prices Online
It can be difficult to decide whether to get a new or used car as both options come with their set of pros and cons.
Getting a new car means that you wouldn’t have to worry about potential problems such as wear and tear as well as poor maintenance.
In the event there are issues, a new car means you’ll be covered by warranty – which is something you wouldn’t get with a used car.
Having said that, if you’re on a budget, getting a used car could be the better option. Besides just being cheaper, you’ll have a wider selection of car models to choose from.
When you’ve made your decision, go online to get a better idea of the prices. sgCarMart is a great starting place to visit for some initial browsing.
2. Budget Aside The Down Payment Of The Car & The Monthly Instalments Needed
Once you know how much you have to pay for your car’s down payment and monthly instalments, you can start saving and setting aside the required amounts.
A good rule of thumb is to spend no more than 10-20% of your annual income on your car payments. Remember, you probably have a mortgage and lifestyle costs to settle first.
In Singapore, a car is a luxury and not a core essential!
It helps to plan ahead so you will stay disciplined and be less likely to accidentally spend the money you need.
3. Head For A Test Drive & Negotiate For A Better Price
The next step would be to go to a showroom to view and test drive the car. It helps to bring along your family members so you can get a second opinion and advice.
When you’re there, ask all your questions and clear your doubts with the salesperson. You can also find out the advantages of the car models you’re eyeing before test driving.
Before making your purchase, you can negotiate by subtly asking the salesperson for freebies and discounts.
After some back and forth, you can seal the deal when you’re satisfied with the offer.
But before you sign off on that agreement for a regular fossil fuel car, why not consider getting an electric car?
Why You Should Consider Getting An EV Instead
Apart from doing your part to save the earth, you’ll get to enjoy some benefits when you opt to get an EV in Singapore. Here’s why!
1. You’ll Save More Money With EV Cost Incentives
Did you know that you can save money driving an EV? When you register a car with cleaner emissions, you’ll qualify for emission rebates which can be used to offset up to $5,000 of your car’s ARF.
Apart from that, you’ll be able to get rebates of between $15,000 to $25,000 for new cars registered from 1 January onwards.
There’s also the DBS Green Car Loan which specifically caters to would-be EV owners.
It has a special rate of 1.68% per annum for those purchasing a new or used electric or hybrid vehicle.
2. You’ll Be Doing Your Part For A More Sustainable & Greener Singapore
Driving an EV means that you would be contributing to Singapore’s efforts to be a greener city.
Besides the lower levels of harmful emissions, there would also be reduced noise pollution and cost savings on energy consumption as well.
3. EV Charging Points Are Being Rapidly Developed Across Singapore
It would be easier to charge your car within the next few years. The number of EV charging stations in Singapore is set to hit 60,000 by 2030, of which public car parks will have 40,000 charging points while the other 20,000 will be on private premises.
Fund Your Car Payments With Savings From iSwitch
While buying a car in Singapore might seem prohibitively expensive, there are many ways to save up money – and enjoying guaranteed savings off your electric bill is one way to fund your car payments!
At iSwitch, we help households in Singapore save on their monthly electricity bills while supplying them with carbon-neutral electricity.
In addition, we also offer a suite of green energy solutions – from solar panel installation to EV chargers as well.
It’s time to lock in savings on your electric bill, do your part for the environment and make those car payments a little easier!
Check out our residential price plans here today.