Singapore has some of the world's most expensive cars. This comprehensive guide explains COE, ARF, taxes, running costs, and helps you decide if car ownership makes financial sense for your situation.
Before diving into the costs, ask yourself these key questions.
| Option | Monthly Cost | Best For |
|---|---|---|
| Own a car | $2,000 - $3,500 | Families, frequent drivers |
| MRT + Bus (daily) | $80 - $150 | CBD workers, regular routes |
| Grab/Taxi (moderate) | $300 - $800 | Occasional needs, door-to-door |
| Car sharing (BlueSG, GetGo) | $200 - $500 | Occasional drivers, short trips |
| Weekend car rental | $400 - $800 | Weekend family outings only |
Reality Check: Many people spend $1,000-1,500/month on MRT + occasional Grab, which is $1,000-2,000 less than owning. Over 10 years, that's $120K-240K in savings - enough for a property down payment!
Singapore actively manages car ownership to control congestion and pollution. The result is one of the world's most expensive car markets.
Singapore is only 733 km² with roads taking up 12% of land. More cars = gridlock. The government limits vehicle population growth to ~0.25% annually.
The COE system creates artificial scarcity. You must bid for a certificate just to register a car. With high demand and limited supply, COE prices can exceed $100,000.
After the COE, you pay Additional Registration Fee (ARF), Excise Duty, GST, and Registration Fee. A $30,000 car abroad easily becomes $150,000+ in Singapore.
Singapore's MRT and buses cover 90%+ of the island. The government incentivizes public transport to reduce the need for private cars.
Example: Toyota Camry 2.5L (or equivalent mid-range sedan)
*Approximate prices for comparison. Actual prices vary by model and specs.
The COE is essentially a "license to own a car" for 10 years. It's the single biggest cost factor in Singapore car ownership.
| Category | Vehicle Type | Recent Premium* |
|---|---|---|
| Cat A | Cars ≤1,600cc & ≤97kW | ~$95,000 |
| Cat B | Cars >1,600cc or >97kW | ~$115,000 |
| Cat C | Goods vehicles & buses | ~$75,000 |
| Cat D | Motorcycles | ~$11,000 |
| Cat E | Open (any except motorcycles) | ~$115,000 |
*COE premiums fluctuate based on bidding. Check OneMotoring for latest results.
Bidding Rounds
2 rounds per month (1st & 3rd Wednesday)
Open Bidding
You bid your maximum price; final price = lowest successful bid
Validity
10 years from registration date
Renewal Option
Pay Prevailing Quota Premium (PQP) for 5 or 10 more years
Calculated as a percentage of your car's Open Market Value (OMV):
Example: A car with $60,000 OMV has ARF of:
($20,000 × 100%) + ($30,000 × 140%) + ($10,000 × 220%) = $84,000
Import tax on the vehicle value
Applied on (OMV + Excise Duty)
Fixed fee to LTA
Dealer's profit margin (negotiate!)
Here's a realistic breakdown for a mid-range sedan (e.g., Toyota Corolla/Honda Civic class) with OMV ~$25,000.
One-Time Purchase
$165,000
10 Years Running
$120,000-180,000
Total Cost
$285,000-345,000
That's approximately $2,400-2,900/month over 10 years, or $80-95/day!
Based on engine capacity. Paid every 6 or 12 months.
Electric vehicles enjoy lower road tax rates.
Congestion charges at gantries during peak hours.
ERP 2.0 (New System)
Satellite-based system being rolled out. Distance-based charging.
Typical Charges
$0.50 - $6.00 per pass, depending on location and time.
Operating Hours
Peak: 7:30-9:30 AM, 5:30-8:00 PM weekdays. Some weekend operation.
Parking can add significantly to your monthly car expenses.
Singapore has strict traffic enforcement. Know these fines to avoid costly mistakes.
+ 4-24 demerit points
+ 12 demerit points
+ Jail + License disqualification (min. 2 years)
+ 12 demerit points
+ 3 demerit points
Plus ERP charge. If unpaid 14 days = $70
Vehicle may be seized
Criminal offense
Singapore uses a demerit points system. Accumulate too many points and you'll face suspension.
0-11
Safe Zone
12-17
Warning
18-23
Retraining
24+
Suspension
Buy Used: A 3-5 year old car with remaining COE can save you $30K-50K upfront. Just factor in the shorter COE period.
Consider EVs: Electric vehicles get VES rebates (up to $25K), lower road tax, and save on petrol. Many new models available.
Time Your Purchase: COE prices fluctuate. Monitor the market and buy when prices dip (if you can wait).
Compare Financing: Bank loans typically have lower interest than dealer financing. Shop around for the best rates.
Sell Before Year 9: PARF rebate decreases each year. Sell earlier to maximize value recovered.
Get Multiple Insurance Quotes: Premiums vary significantly. Use comparison sites to find the best deal.
Let us help you understand how car ownership fits into your overall financial plan. We can show you the opportunity cost and help you make an informed decision.
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