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The Real Cost of Owning a Car in Singapore 2025: A Comprehensive Guide

From COE to EV incentives, here's everything you need to know before taking the wheel

A car on top of a pile of coins

So, you’re thinking about buying a car in Singapore? Buckle up, because this isn’t your average car-buying experience. Imagine trying to buy a luxury handbag, but the price tag includes a bidding war, a 10-year expiration date, and a hefty dose of government fees. That’s essentially what owning a car in Singapore feels like. But don’t worry—I’m here to break it all down for you, from the infamous Certificate of Entitlement (COE) to the latest electric vehicle (EV) incentives. By the end of this, you’ll know exactly what you’re signing up for (and whether your wallet can handle it).

The COE: Your Golden Ticket to Car Ownership

Let’s start with the elephant in the room: the Certificate of Entitlement (COE). Think of it as a golden ticket—except instead of a chocolate factory, it grants you the right to own a car for 10 years. And just like Willy Wonka’s golden tickets, COEs are rare and expensive.

Here’s how it works: The government limits the number of cars on the road by auctioning off a limited number of COEs each month. The price? It fluctuates based on demand, but as of late 2023, you’re looking at anywhere from $0 to over $100,000 for a single COE according to Straits Times. Yes, you read that right. For context, a Toyota Corolla Altis might cost around S$162,888 according to SGCarMart, but nearly half of that could just be the COE ($93,601).

(Pro tip: If you’re feeling lucky, you can try bidding for a COE yourself. But most people leave it to the dealerships to handle this headache.)

Breaking Down the One-Time Costs

Now that we’ve tackled the COE, let’s talk about the other upfront costs. Buying a car in Singapore isn’t just about the sticker price—it’s like peeling an onion (cue the tears). Here’s what you’ll need to budget for:

  1. Open Market Value (OMV): This is the base cost of the car, excluding all the Singapore-specific fees. Think of it as the “before” price in a makeover show.
  2. Additional Registration Fee (ARF): This is a tax calculated based on the OMV. For a car with an OMV of S$20,000, the ARF could be around S$20,000. Yep, it’s essentially doubling the cost.
  3. Excise Duty and GST: On top of the ARF, you’ll pay a 20% excise duty and 8% GST.
  4. Road Tax: This is an annual fee, but you’ll need to pay it upfront when you register your car.

By the time you’re done, a modest sedan could set you back S$160,000, while a luxury car might cost closer to S$300,000 and beyond. And that’s before you even hit the road.

Recurring Costs: The Never-Ending Story

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Okay, so you’ve bought the car. Now what? Welcome to the world of recurring costs, where your wallet never gets a break. Here’s what you’ll be paying for:

  • Fuel: Driving 17,500 km a year in a Toyota Corolla Altis? That’ll cost you about S$3,295 in petrol according to Income.
  • ERP Charges: Singapore’s Electronic Road Pricing system is like a toll booth that follows you everywhere. Expect to pay $0.50 to $4.00 per trip, depending on the time and location.
  • Parking Fees: Parking in Singapore isn’t cheap. Annual costs can range from S$1,320, depending on where you park.
  • Insurance: Car insurance premiums vary, but they’re a must-have. Budget at least S$700 to S$1,000 annually according to MoneySmart.
  • Maintenance: Regular servicing, tire changes, and the occasional repair can add up. Plan for S$500 to S$800 per year according to CarSnap.
  • Road tax: This varies based on your car.

And don’t forget—after 10 years, your COE expires, and you’ll need to either renew it (at market rates) or say goodbye to your car.

Electric Vehicles: A Greener (and Cheaper?) Option

Here’s where things get interesting. If you’re considering an electric vehicle (EV), the government is rolling out the red carpet (and some serious cash).

So, while EVs might have a higher upfront cost, the incentives can make them a more affordable option in the long run. Plus, you’ll be doing your part for the environment. Win-win!

Is Owning a Car in Singapore Worth It?

Here’s the million-dollar question (literally): Is owning a car in Singapore worth it? The answer depends on your lifestyle and budget. If you’re someone who values convenience and doesn’t mind the cost, then go for it. But if you’re on the fence, consider this:

  • Public Transport: Singapore’s MRT and bus systems are efficient, affordable, and constantly expanding.
  • Ride-Hailing: Grab and Gojek are everywhere, and they’re often cheaper than owning a car. Check out this article that compares buying a car v.s ride-hailing.
  • Car-Sharing: Services like BlueSG and GetGo let you drive without the long-term commitment.

Final Thoughts: Know Before You Go

Owning a car in Singapore is a big financial commitment, but it’s not impossible. The key is to go in with your eyes wide open. Understand the costs, explore your options (like EVs), and crunch the numbers to see if it fits your budget. And remember—whether you’re cruising in a luxury sedan or zipping around in an EV, the most important thing is to enjoy the ride.