A lot of individuals who are considering buying a car find themselves at odds at times with the high expenses of car ownership in Singapore, let alone the costs of car maintenance. To help you be prepared, here is a breakdown of some of the components of the cost of owning a car in Singapore.
1. Certificate of Entitlement (COE)
Perhaps, the most significant cost in car ownership in Singapore is the Certificate of Entitlement (COE). It is considered as the key indicator of car ownership in the country. The cost of COE is widely varied in Singapore depending on the demand and the type of vehicle. This ten-year expense is very crucial, however, it must be renewed once every ten years if you intend to keep the car longer, often at additional expense.
2. Car Insurance
Car insurance is mandated by the government for all vehicle owners in Singapore. It has plenty of advantages such as providing essential protection against financial loss that are the result of various causes such as accidents, theft, or damage.
The cost of car insurance depends on various factors such as the driver’s profile, driving record, and the type of vehicle. On average, car insurance premiums range from SGD 800 to SGD 2,000 annually for basic coverage, though additional benefits and higher coverage limits can raise this further. Singapore offers a wide array of insurance providers, so it’s wise to compare premiums before you settle on one based on your needs and budget.
3. Road Tax
Just like the components that we have already discussed, the rate of road tax depends on the engine capacity of the vehicle. Usually, smaller cars (1,000 cc and below) may have road tax fees of about SGD 400 to SGD 600 per year, while larger engine capacities incur higher costs, potentially reaching SGD 2,000 or more annually. Meanwhile, electric vehicles, which are growing in popularity, have different tax structures based on the power rating.
While you’re focusing on your road adventure, you also need to consider the financial costs of getting a new car so that you won’t get caught up in unexpected issues later on.
4. Fuel Costs
Fuel is a recurring expense that varies greatly according to your car’s fuel efficiency, fuel type, and driving habits. The reality is that petrol prices in Singapore tend to be higher than in many other countries, ranging from SGD 2.80 to SGD 3.20 per litre. For a mid-range sedan driving an average of 15,000 kilometres per year, this could reflect annual fuel expenses of approximately SGD 2,000 to SGD 3,000. There are plenty of factors that influence fuel costs such as local and global pump price fluctuations.
If your workplace were too far from your home, you would consume more fuel. You should also consider the distance to your workplace when buying a car. Alternatively, you can also consider a much more practical option, such as commuting or biking.
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5. Maintenance and Repairs
While not as significant as the aforementioned costs, maintenance costs can still have a significant impact on one’s budget. Depending on the car’s age and usage, regular servicing typically costs SGD 200 to SGD 400 per visit. The factors that affect the additional costs are wear and tear, such as replacing tyres, batteries, and brakes. Huge repairs can also be costly, especially if your car experiences breakdowns or is out of warranty. It is advisable to allot at least SGD 1,000 to SGD 2,000 per year for maintenance
6. Parking and ERP Charges
Parking fees are one of the daily expenses that car owners deal daily. Monthly parking costs can vary widely, from SGD 100 to SGD 400, depending on whether you park at a residential or your workplace Additionally, Singapore’s Electronic Road Pricing (ERP) system also charges toll fees, especially during peak hours. They can boost up to SGD 100 or more per month, especially for frequent drivers.
7. Depreciation
In Singapore, cars lose value due to the high initial costs and ten-year COE restrictions. The depreciation cost can be calculated by dividing the total cost of the vehicle (including taxes and COE) by the number of years that you own it.
Depreciation is another crucial aspect to consider. Cars in Singapore lose value quickly due to the ten-year COE restriction and high initial costs. Depreciation can be calculated by dividing the total cost of the vehicle (including COE and taxes) by the number of years you plan to own it. Usually, depreciation costs range from SGD 10,000 to SGD 15,000 per year for mid-range cars.
Conclusion
In summary, the cost of owning a car in Singapore is typically high because of the various “factors”, including COE, insurance, and taxes. If you are looking to own a vehicle, careful planning and budgeting are significant to manage the expenses associated with car ownership. Knowing these costs helps potential buyers make informed decisions and determine if owning a car is the right choice for their financial situation without sacrificing their dream and thrill for an adventure.
Are you considering getting on a new adventure by buying a car in Singapore? Check out SG Professionals Guide and learn more about tips that you can apply in your life and career.