Buying a car in Singapore can be an exciting process, with various models and costs to consider.
Despite the high cost, owning a car in Singapore can offer a sense of freedom and convenience that public transportation and car-sharing services may not provide.
With your own vehicle, you can easily embark on road trips, discover hidden gems in Singapore, and even transport large items.
However, it’s important to weigh the costs and benefits before making such a significant investment.
Keep in mind that Singapore’s public transportation system is reliable and efficient, and car-sharing services may be a more cost-effective option for occasional use.
This guide will provide you with the essential information you need to know before buying a car in Singapore.
Table of Contents
Getting a Singapore driving license
Before making the decision to purchase a car, there are a few important things to consider.
Firstly, it’s essential to have a valid driving license if you plan on driving the car yourself. However, even if you don’t plan on buying a car, obtaining a driving license can still be a valuable asset.
With a license, you’ll have the freedom to rent a car, borrow one from a friend or family member, or even drive a company vehicle for work purposes. So, before you start browsing car listings, make sure you have your license in order.
Obtaining a Singapore driving license comes with a cost. The total cost of getting a driving license can vary depending on the type of license you are applying for and the driving school you choose.
On average, it can cost around $1,500 to $2,500 to obtain a Class 3 driving license, which allows you to drive a car. However, the final cost can vary depending on several factors.
- For instance, taking private lessons can be about 10% cheaper than attending a school.
- Additionally, the cost may be affected by the timing of your lessons, with peak time slots being more expensive than off-peak ones.
- The number of lessons and attempts required before passing, as well as whether you opt for an auto or manual license, can also impact the final cost.
Determine your budget and financing options
Before you start shopping for a car, it’s important to determine your budget and financing options. In Singapore, car prices are significantly higher due to taxes and other fees, so it’s important to have a realistic budget in mind.
Consider factors such as your income, expenses, and other financial obligations. You can also explore financing options such as car loans or leasing, but be sure to compare interest rates and terms before making a decision.
Choose the right type of car for your needs
When buying a car in Singapore, it’s important to choose the right type of car for your needs. Consider factors such as your daily commute, the number of passengers you typically carry, and your lifestyle.
If you have a long commute or frequently travel with passengers, a sedan or SUV may be a better option. If you’re looking for a more eco-friendly option, consider a hybrid or electric car.
It’s also important to consider the cost of maintenance and insurance for the type of car you choose.
Research and compare car models and dealerships
Before making a decision on which car to buy, it’s important to do your research and compare different car models and dealerships.
Look for reviews and ratings online, and consider factors such as fuel efficiency, safety features, and overall cost.
You should also visit different dealerships to compare prices and negotiate the best deal. Don’t be afraid to ask questions and take your time to make an informed decision.
Understand the COE bidding process and additional fees
In Singapore, the Certificate of Entitlement (COE) is a necessary document that allows you to own and use a car for 10 years. The COE bidding process can be confusing, but it’s important to understand how it works before buying a car.
You’ll need to bid for a COE and pay the prevailing quota premium (PQP) based on the category of your vehicle but you can usually leave it to the car dealer to settle the COE bidding for you.
There are also other fees to consider such as registration fees, road tax, and insurance. Make sure you factor in all of these costs when budgeting for your new car.
Vehicle Loan Limits
In Singapore, the Monetary Authority has set regulations on the maximum loan amount that can be obtained for purchasing a vehicle.
If the Open Market Value (OMV) of the car is $20,000 or less, the maximum loan quantum is 70% of the purchase price.
However, if the OMV is more than $20,000, the maximum loan quantum is reduced to 60%. The recently amended regulation allows for a loan tenure of up to seven years.
Minimum Deposit
When entering into a hire-purchase agreement for a motor vehicle, there is a minimum deposit requirement that must be met.
According to the Hire-Purchase (Motor Vehicles) Regulations 2013, if the value of the vehicle is less than or equal to $20,000, the minimum deposit amount is 30% of the purchase price.
However, if the value of the vehicle exceeds $20,000, the minimum deposit amount increases to 40% of the purchase price.
It’s important to keep these deposit requirements in mind when considering a hire-purchase agreement for a new motor vehicle.
Cost of owning and maintaining a car
In addition to the cost of buying the car, there are ongoing expenses for maintenance, repairs, insurance, fuel, and registration. These costs can add up quickly and should be factored into your budget when considering whether or not to buy a car.
Road Tax
Road tax is an annual fee that vehicle owners must pay in order to use public roads. The amount of road tax payable varies depending on factors such as the type of vehicle, engine capacity, and age of the vehicle.
To find out how much road tax you need to pay, you can check with the Land Transport Authority (LTA) or use a road tax calculator for an estimate.
For example, the road tax for a Mercedes-Benz GLA-Class GLA180 is approximately $740 per year.
Motor Insurance
When it comes to motor insurance, the cost can vary greatly depending on a number of factors. These include your driving history, claims or car accident record, and the specific insurer you choose.
On average, however, new car owners can expect to pay around $1,200 per year for comprehensive coverage. It’s important to shop around and compare quotes from different insurers to find the best deal for your individual needs.
Interest rate
When considering taking out a car loan, it’s important to remember that the interest rate will add to the overall cost of owning the car.
This cost should be spread out over the course of the loan, which typically lasts around seven years.
Currently, interest rates for car loans range from 2.28% to 2.99%.
Parking Costs
The cost of parking in Singapore can add up quickly, especially for those living in HDB blocks who need to pay at least $80 per month for season parking.
On top of that, parking at other locations such as the office can easily cost an additional $100 or more.
Unfortunately, parking charges tend to increase periodically, leading to concerns about the rising cost of car park charges.
Petrol
The cost of petrol can quickly add up, especially if you’re spending an average of $350 per month, not to mention an additional for ERP charges.
To save on these expenses, it’s important to find ways to reduce your petrol costs. Check out our tips for saving on petrol prices in Singapore to help keep more money in your pocket.
Maintenance & repairs
Assuming an average cost of $500 per year for regular servicing and an additional $5,000 set aside for parts replacement over a 10-year period, you can expect to spend around $10,000 on maintenance and repairs over the course of a decade.
This works out to be approximately $1,000 per year. However, keep in mind that these costs can vary depending on the make and model of your car, as well as the workshop you go to for servicing.
Car accessories
Car accessories are a great way to personalise and improve your vehicle. From practical items like car trunk organisers and floor mats to luxurious upgrades like premium car sound system and inflatable air beds, there are countless options available to suit any budget.
Prices can range from as little as $10 to several hundred dollars depending on the item and its features.
Traffic fines
Receiving a traffic fine is never a pleasant experience, whether it’s for a minor traffic offence or a parking violation. Unfortunately, we must consider the financial cost of these fines and the impact they can have on our budgets.
Test drive and inspect the car
Before you make a final decision on which car to buy, it’s important to test drive and inspect the vehicle thoroughly.
Take the car for a spin on different types of roads to get a feel for how it handles. Check the brakes, steering, and suspension to make sure they are in good working order.
Inspect the exterior and interior of the car for any damage or wear and tear. Don’t be afraid to ask the seller questions about the car’s history and maintenance records. A thorough vehicle inspection can help you avoid any surprises down the road.
Is it hard to buy a car in Singapore?
Buying a car in Singapore can be a bit of a challenge, especially if you don’t have the cash upfront. Most people opt for loans and instalment payments, which can be payable for up to seven years for cars with an Open Market Value (OMV) below $20,000. However, with the right research and preparation, it is possible to navigate the car buying process in Singapore and find the right financing options for your needs.
Can I own 2 more than cars in Singapore?
In Singapore, there is no limit to the number of vehicles an individual can own as long as they are able to obtain a Certificate of Entitlement (COE) through successful bidding or securing one. Therefore, there are no restrictions on the number of cars a person can register under their name.
How many Singaporeans own a car?
According to recent data, the number of motor vehicles in Singapore as of the end of 2022 was around 995,000. This includes cars, motorcycles, and other types of vehicles. However, it is unclear how many Singaporeans specifically own a car, as some vehicles may be owned by businesses or non-citizens.
How much is a downpayment on a car in Singapore?
In Singapore, the down payment required for a car purchase depends on the Open Market Value (OMV) of the vehicle. For cars with an OMV exceeding $20,000, the maximum loan amount is 60% of the car price, requiring a minimum down payment of 40%. For cars with an OMV of $20,000 or below, the maximum loan amount is 70% of the car price, requiring a minimum down payment of 30%.
Is now a good time to buy car in Singapore?
The current market conditions in Singapore suggest that it may be a good time to purchase a car. However, it is important to consider the financial burden that comes with buying a new car, including minimum downpayment, COE prices, and loan restrictions. Despite these limiting factors, the upward trend of COE premiums may make it advantageous to make a purchase now rather than later.
What month is best to buy a cheap car?
If you’re looking to buy a car on a budget, it’s best to start your search in the quarter of the year. This is when car dealerships are trying to meet their sales quotas for the year, quarter, and month. This means they may be more willing to negotiate and offer discounts to meet their goals. So, if you’re looking for a good deal on a car, keep an eye out during the last few months of the year.
When is the best time to purchase a car in Singapore?
If you’re looking to purchase a car in Singapore, it’s important to keep in mind the COE bidding schedule. The bidding closes every first and third Wednesday of the month, so it’s best to avoid buying a car within the three days leading up to the COE closing. During this time, dealers may increase their prices to protect against potential COE spikes. To avoid crowds, it’s recommended to visit showrooms on weekdays.
Where is the cheapest place to buy cars?
Your best bet might be to check out second-hand car dealerships or car marts. These places often have a wide variety of used cars available at lower prices than you would find at a new car showroom. Another option is to consider purchasing a car from a parallel importer, who can often offer lower prices due to their ability to source cars from overseas.
Should I buy a used car or new car in Singapore?
Choosing between a new or used car in Singapore depends on your budget and priorities. While a new car may come with a higher price tag, it also comes with a warranty and lower maintenance costs. On the other hand, a used car may have a lower upfront cost, but may require more repairs and maintenance in the long run. Consider your financial situation and what you value most in a car before making a decision. It’s always a good idea to compare prices and options for both new and used cars before making a final decision.
Should I buy a car in Singapore?
Buying a car in Singapore is a major financial decision that requires careful consideration of various costs.
Second-hand cars may also be an option, but it’s important to factor in potential maintenance costs.
Some people opt for off-peak cars to save on fees. Ultimately, it’s important to weigh the affordability of owning a car with the opportunity cost of not investing that money elsewhere.
If you’re thinking about purchasing a new car, it might be a good idea to sell your current car for the best price first.
This can help offset the cost of your new vehicle. Before making any decisions, be sure to check out our comprehensive cost estimates for various car categories, including budget-friendly options.
