One of the biggest perils of car ownership anywhere in the world (and especially in Singapore) is not fully understanding the financial implications of one’s purchase. In Singapore, there are some very specific factors that affect the value of a car and the overall cost of ownership. As Singapore is still one of the most expensive places in the world to buy and maintain a car, it is well worth one’s time to understand the basic elements that make up the costs of owning a vehicle here.

We suggest looking at the cost of car ownership in Singapore from 2 perspectives: Buying a car and maintaining one.

Owning a Vehicle in Singapore
The 2 main factors that impact the cost of car ownership in Singapore are:

  • The vehicle tax regime including import duties, additional registration fees (ARF) and road tax.
  • The Vehicle Quota System which limits the vehicle population growth in Singapore to approximately 3% per annum. The tool which is used to limit the number of cars registered in Singapore is the Certificate of Entitlement or COE. Each vehicle registered in Singapore must have an accompanying COE which is “attached” to the vehicle throughout the vehicle’s lifespan. For more information on the Vehicle Quota System and COEs, please visit (The Land Transport Authority) and (a central motoring portal).

The purchase price of a new car is made up of the following components:

OMV Open Market Value or import value of the car as assessed by Singapore Customs $20,000
Import Duty Currently 20% of the OMV $4,000
GST Currently 5% of import value $1,200
ARF Currently 110% of OMV $22,000
Registration fee Currently at $140 $140
Sub-Total Base cost before local accessory installation, number plates, COE, insurance, road tax, etc and any dealer profit. $47,340

Note: Table and figures last updated 31 December 2004.

More details on the breakdown of the base cost can be found at

Here, you will also find information on average OMV amounts for each make and model currently sold in Singapore. Theoretically, one can work out approximately how much profit each dealer makes when they sell a car to you!

Recurring costs
In addition to incurring the cost of acquiring a vehicle, there are other costs associated with keeping the vehicle on the road. Here are some of those costs:

Road Tax Variable (see example below). Engine capacity.
Radio licence fee $27 per year. Do you have a radio in your car?
Petrol Petrol is available in various grades and just as an indication, as at 2004, the duty on premium grade fuel is 35% of pump price without GST, or $0.44 per litre (whichever is higher). Your vehicle’s fuel economy, driving habits and travel patterns. How well your vehicle is maintained is also a factor (eg, tyre pressure, state of engine oil, etc).
Parking Variable. Where, you live, work, hang out, etc. See our useful tips section on Parking Charges.
Inspection fee Dependent on the inspection centre you choose and if you can benefit from a discount scheme (eg, through the AA). Age of the car will affect the frequency.
Insurance Vehicle and driver dependent. Your vehicle type, your driving record, your profile (eg, age, occupation, etc).
Maintenance Variable. Your vehicle choice (some are more reliable than others), driving habits and distance travelled.
Electronic Road Pricing Variable. Which roads you choose to use, the day of the week and the time of the day you use these roads.

Road Tax Formula and example (as extracted from

For privately registered petrol-driven cars:

EC <= 600 cc $400
600 cc < EC <= 1,000 cc $400 + 0.25 x (EC – 600)
1,000 cc < EC <= £ 1,600 cc $500 + 0.75 x (EC – 1,000)
1,600 cc < EC <= 3,000 cc $950 + 1.5 x (EC – 1,600)
EC > 3,000 cc $3,050 + 2.0 x (EC – 3,000)

* Effective from 1 September 2002.

If your car’s engine capacity (EC) is 1600cc, the vehicle’s annual road tax will be:

ROAD TAX = $500 + 0.75 x (1600 – 1000)

= $500 + 0.75 x (600)

= $500 + 450

= $950

Important Note
One of the most common misconceptions on the affordability of a car is the “low monthly installment” syndrome. This happens when prospective buyers are woo-ed into buying a car on the premise that the monthly installment is low. However, many consumers do not factor in other “costs” and can end up in a horrendous situation from a financial perspective.

Also, we find that the majority of car buyers do not take enough time to consider their ownership horizon and therefore do not make the best purchase decisions from a financial perspective.
When buying a car, take your time to consider how much it will cost you overall, your intended ownership period and of course, your motoring needs.

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