Owning a car in Singapore is a dream for many, but the reality comes with a hefty price tag. Singapore is consistently ranked as one of the most expensive places in the world to own a car, thanks to high upfront costs, recurring expenses, and government-imposed regulations to control traffic congestion.
Before you commit to buying a vehicle, it’s crucial to understand all the associated costs. From the initial purchase price and taxes to insurance, road tax, and maintenance, the expenses can quickly add up. This guide will break down the financial aspects of car ownership in Singapore so you can make an informed decision.
CPF Contribution Rates in 2025
1. Purchase Price: The Cost of Getting Your Dream Car
The first and most significant cost of owning a car in Singapore is the purchase price. The price of a vehicle is heavily influenced by the Certificate of Entitlement (COE), which is mandatory for car ownership in Singapore and is valid for ten years. COE prices fluctuate based on supply and demand and can sometimes exceed the car’s original value.
Here are the latest COE prices as of January 2025:
Category | COE Price |
A (Cars up to 1,600cc & 110KW) | $93,601 |
B (Cars above 1,600cc or 110KW) | $116,625 |
E (Open – All except Motorcycles) | $115,112 |
On top of COE, car buyers must also consider the Open Market Value (OMV) of the vehicle, Additional Registration Fee (ARF), and dealer markups. A mid-range sedan typically costs around S$120,000, while luxury models can easily exceed S$190,000.
2. Registration Fees and Taxes
The following fees and taxes contribute significantly to the cost of car ownership:
- Registration Fee (RF): A one-time fee of S$220
- Additional Registration Fee (ARF): A tiered tax based on the OMV:
- First S$20,000: 100%
- Next S$30,000: 140%
- Next S$30,000: 180%
- Above S$80,000: 220%
- Excise Duty: 20% of the car’s OMV
- Goods & Services Tax (GST): 9% of the total price (increased from 8% in 2024)
- Carbon Emissions-Based Vehicle Scheme (CEVS): A surcharge or rebate based on the car’s emission levels, ranging from -S$25,000 to +S$25,000
Singapore incentivizes environmentally friendly cars through rebates for low-emission vehicles and imposes surcharges on high-emission ones.
3. Car Loans and Financing
Since most car buyers require financing, understanding loan terms is essential. According to Monetary Authority of Singapore (MAS) regulations:
- For cars with an OMV below S$20,000, you can borrow up to 70% of the price.
- For cars with an OMV above S$20,000, the maximum loan is 60%.
- Loan tenure is capped at seven years.
- Interest rates range between 2.28% to 2.88% per annum.
For example, financing S$60,000 over seven years at 1.99% interest will result in monthly repayments of around S$813.
4. Maintenance Costs
Regular servicing is essential to ensure the longevity and efficiency of your vehicle. Maintenance costs include:
- Routine servicing (oil changes, brake pads, etc.): S$600 – S$1,500 per year
- Tyre replacements: S$500 – S$1,000 every two years
- Battery replacement: S$200 – S$400 every two to three years
- Unforeseen repairs: Can range from S$500 to several thousand dollars depending on the issue
Luxury cars have significantly higher maintenance costs compared to mass-market vehicles.
5. Road Tax
Road tax is a mandatory recurring fee based on your car’s engine capacity:
- 1,000cc – 1,600cc: S$600 – S$800 per year
- 1,600cc – 2,000cc: S$800 – S$1,200 per year
- Above 2,000cc: S$1,200 and above per year
Electric vehicle (EV) owners pay an additional Annual EV Road Tax to compensate for fuel duties.
6. Miscellaneous Expenses
Beyond standard costs, additional expenses include:
- Petrol: S$2,500 – S$4,500 per year
- Parking Fees: S$1,200 – S$2,400 per year (season parking, public parking, etc.)
- Electronic Road Pricing (ERP) Fees: S$500 – S$1,000 per year
- Car Wash & Grooming: S$300 – S$600 per year
- Accessories (e.g., dashcams, child car seats): Varies based on preference
7. Car Insurance: Protecting Your Investment
Car insurance is mandatory in Singapore, and premiums vary based on factors such as age, driving experience, and vehicle model. The three main types of car insurance are:
- Third-Party Only (TPO): Covers damage to others but not your vehicle.
- Third-Party, Fire & Theft (TPFT): Includes TPO coverage plus fire and theft protection.
- Comprehensive Insurance: Covers damage to your own vehicle in addition to third-party coverage.
Recommended Car Insurance Providers in Singapore (2025):
- Great Eastern Car Insurance – Offers competitive rates and a user-friendly claims process.
- Income Drivo Car Insurance – Includes roadside assistance and flexible add-ons.
- FWD Car Insurance – Known for affordable premiums and a fast claims process.
- AXA Car Insurance – Comprehensive plans with no-claims discount protection.
- AIG Car Insurance – Customizable policies with high coverage limits.
- MSIG MotorMax – Offers both standard and prestige plans with extensive benefits.
- Allianz Car Insurance – Provides 24/7 assistance and a digital claims process.
To get the best deal, compare different insurers, consider bundling policies, and check for no-claim discounts (NCD) that can reduce premiums by up to 50%.
Final Thoughts: Is Owning a Car in Singapore Worth It?
With soaring costs, car ownership in Singapore is a luxury rather than a necessity. For those who need a vehicle for work or family commitments, the financial commitment must be carefully planned. Alternative options like car leasing, car-sharing services, or public transport can offer cost-effective mobility solutions.
However, if owning a car aligns with your lifestyle, choosing the right financing plan, maintaining the vehicle properly, and securing a suitable insurance policy can help you manage costs effectively.
Before making the leap, weigh the costs and benefits to ensure that car ownership truly fits your financial situation and needs.
Learn more about: Comprehensive Guide to CPF in Singapore (2025)