How Much Does It Truly Cost To Maintain A Car In Singapore?

Owning a car in Singapore is famously expensive. Besides the ridiculously inflated selling prices, there is also a whole list of other costs involved in keeping your car. This is why it's crucial to understand the cost of car ownership in Singapore before making a purchase. Knowing the potential expenses like maintenance and car insurance can help you make informed decisions, budget effectively, and avoid unexpected financial burdens. To help you with this, we'll be using one of the most popular cars in Singapore as an example: the Honda Jazz.

Let’s dive into how much it costs to own a car in Singapore. While owning a car means more than the upfront cost of buying the car, we’ll start with how much is needed to purchase a car first. 

Purchase costs are made up of the following:

• Purchase price of the car

• Car loan interest

• License plate number

• In-vehicle unit

Let’s take a look at each one in turn.

At the time of writing, the dealer’s package for the Honda Jazz 1.5 costs S$148,999. In comparison, prices for the Honda Jazz 1.5 (a more powerful variant) starts from RM73,000 (or roughly S$24,333 SGD) in Malaysia. Why the huge difference?

Well, as you can see from the table above, there is a whole list of surcharges and fees associated with buying a new car in Singapore. So if you’re serious about purchasing a car, consider these factors before making your decision.

These fees are introduced with the aim of keeping the number of vehicles on Singapore’s roads down to a manageable number. After all, more cars means more money spent on infrastructure costs such as roads, carparks, expressways and petrol kiosks, traffic congestion problems and higher levels of air pollution.

Let’s quickly run through all these to understand what you’re paying for. 

This refers to the value of the vehicle on the open market. In other words, it’s the selling price of the car, before fees and surcharges. For our Honda Jazz example, the car is valued at S$17,673 at the time of writing.

All new cars will have to pay a registration fee, which is currently tagged at S$350 per vehicle.

The ARF is calculated based on the OMV of your car. Hence, the more valuable your car is, the more you’ll have to pay in ARF.

Here’s the ARF schedule:

Note that ARF is cumulative. It is charged as the OMV of your vehicle crosses each threshold.

In our example, our Honda Jazz’s OMV is S$17,673, less than S$20,000. Hence, we only have to pay the first tier of ARF, which is 100% of OMV, or S$17,673.

Now, if the OMV of our vehicle is higher, say, S$25,000, then we would have had to pay two tiers of ARF, accordingly:

Tier 1: 100% of OMV on first S$20,000 = S$25,000
Tier 2: 140% of OMV on next S$5,000 =S$7,000
Total ARF = S$32,000

Imagine what happens when our car’s OMV exceeds S$50,000.

Like tobacco and alcohol, the Singapore government charges a tax on cars imported into Singapore. Excise duties are charged at a standard 20% of the OMV.

And then there’s good old GST, which is (thankfully) charged only on the OMV and the Excise Duty. We shudder to think if GST was charged on the overall purchase price.

Next, we have the major contributor to the high cost of car ownership in Singaopre, the COE. This is a special license that entitles you to own a car in the country for a period of 10 years. The prices for COE is determined by open bidding, which are conducted twice a month. 

COEs are grouped into five categories according to engine capacity and/or vehicle type.

For Honda Jazz, the engine capacity is less than 1,600 cc, which means the COE you’ll need to bid for falls into Category A, which costs S$93,601 at the time of writing. 

The VES encourages environmentally friendly cars by adding a rebate or surcharge to the purchase cost. This can increase or decrease the overall cost of owning a car in Singapore, so choose wisely.

Vehicles are tested on emission levels of five air pollutants (carbon dioxide, hydrocarbons, carbon monoxides, nitrogen oxides and particulate matter) and assigned a band. Those with lower emissions qualify for rebates (S$10,000 or S$20,000), while those with that exceed pollution thresholds may incur surcharges (up to S$20,000).

For example, our Honda Jazz 1.5 qualifies for a S$10,000 rebate under VES, applied to the ARF. Note that regardless of the VES rebate, car owners must pay a minimum of S$5,000 in ARF.

Our calculations put the total purchase cost of the Honda Jazz at S$127,429. However, the dealer’s package advertised is S$150,999. What’s the reason for the difference?

Very likely, the dealer’s package includes a markup to cover their own costs. It is common for this markup to range from 10% all the way up to 50% for luxury models.

You will likely be taking out a car loan to help with the car ownership costs, which means you’ll need to cover the interest charges as well.

Here are the car loan rules in Singapore, according to the MAS.

So once again, for our example car, we would be able to borrow up to 70% of S$127,429 for up to seven years.

Using our handy loan calculator, we'll get:
Total borrowing: 70% x S$127,429 = S$89,200
Total repayment: S$152,227
Total interest payment: S$24,798

Every vehicle in Singapore needs to have a valid vehicle registration number (AKA license plate number). The LTA will automatically assign a number for free when you register your vehicle. You can also opt to retain your existing license plate number.

If you want a specific license plate number, you’ll need to bid for it. Bidding costs at least S$1,000 right out of the gate. In case you’re curious, the most expensive license plate number in Singapore was sold for S$335,000 (not a typo)—that’s enough to buy an entire HDB flat.

Another thing you’ll need to install in your new car before you can start driving it is the In-Vehicle Unit, a card-reader which lets you pay for ERP charges and parking fees. The cost of installing one is S$155.80 (inclusive of GST).

Besides the upfront purchase cost, driving your car will also incur running and maintenance costs. We’ve summarised some of the most common ones in the table below. This will give you an idea of how much it costs to own a car per month.

To calculate how much you’ll spend on petrol, let’s use the following assumptions:

• Average annual distance driven per car = 17,500km (source) 

• Average petrol price per litre = S$2.30 (source)

• Fuel consumption of Honda Jazz 1.3 = 5.1l/100km

• Annual petrol cost = S$2,052.75

To calculate specific fuel cost, use the fuel cost calculator provided by Land Transport Authority (LTA) Singapore.

Parking charges in Singapore can vary, depending on where and when you park. For simplicity, let’s assume you splurge on the very best of HDB parking for your shiny new Honda Jazz: S$110 per month for sheltered parking in a multi-storey carpark.

Normal rates are between S$3 to S$6 per charge for affected roads leading into and coming out from affected regions. As ERP is pretty much dependent on your driving habits, you may not need to spend anything in this category.

However, for the sake of argument, we'll estimate a monthly ERP cost of S$80 to factor into the overall per month to own a car in Singapore.

You will need to pay road tax every six or 12 months. The amount you will need to pay depends on the engine capacity of your vehicle. You can quickly and easily calculate your road tax using an online calculator, such as this one from sgcarmart.com.

Using this calculator, we determined the road tax payable for our Honda Jazz: S$372 every six months, or S$744 per year.

It is illegal to drive without valid driver’s insurance so don’t even try to get away with not paying it. Generally, young, male drivers are penalised more heavily, as they are perceived to be the riskiest drivers on the road. Older, more experienced drivers generally pay less insurance, and of course, having an impeccable driving record will grant you the best rates.

For the purpose of illustration, we’ll assume the driver of our Honda Jazz is a 35-year-old male with five years of driving experience. Online quotes place our insurance at between S$1,100 to S$2,000 per year. We’ll go with the middle-of-the-road rate of S$1,600 per year.

To reduce the cost of owning a car, find the best insurance quotes using our handy car insurance tool. Compare premiums from popular plans like Great Eastern Drive and Save Plus, Singtel CarProtect and Singlife Motor Lite and find the perfect plan that fits your needs and budget.

In order to prevent serious problems and ensure smooth and efficient running, you’ll need to send your vehicle into the workshop for regular maintenance. How often you’ll need to do this depends on the car make and model, but a general rule of thumb indicates servicing once every 6 months or 10,000 km, whichever comes first.

For our Honda Jazz, general maintenance costs S$336.43 per session, according to Honda’s website.

Speeding, illegal parking, failing to use proper turn signals, and even using your mobile while driving — these are some of the common driving offences that you may commit if you’re not careful. These unexpected costs are just part and parcel of owning a car in Singapore.

If you’re caught, not only will you be given demerit points, you may also be asked to pay a fine. Depending on severity, these fines range from S$100 to S$400. However, serious violations will earn you a trip to court, where you can expect heftier fines and even jail time.

Now, on top of those potential fines, there's another hidden cost that can sneak up on you: depreciation. The value of your car decreases each year due to factors like age, mileage, wear and tear, and market demand.

Generally, the lifespan of a car in Singapore is about 10 years, same as that of a COE. There are penalties if you want to keep your car for more than 10 years (such as increased road tax, for one), but surrendering your car before that will net you some returns.

Remember the ARF (Additional Registration Fee)? If you deregister your vehicle between Years 5 and 10, you’ll get back a portion of what you paid for the ARF in the form of the Preferential Additional Registration Fee (PARF) Rebate.

Here’s how much you can expect to get back.

You can also redeem any remaining COE at the time you deregister your vehicle. The proceeds of this can be applied towards the registration of another vehicle, transferred to another driver, or encashed. 

Let’s find out how much it will cost us each year on average to own our Honda Jazz.

We mustn't forget our one-time cost, to better estimate the first-year upkeep:

There you have it, the magic number for a car’s upkeep in a year. Don’t forget that this figure is derived using a Honda Jazz 1.5, and this is likely to be an underestimation if you are eyeing a continental car or an electric model. For a more accurate estimate, use this car cost calculator to help you budget and plan accordingly.

Since the price of Singapore car ownership is not a small sum to foot every year, if you are not ready for that level of financial commitment, there are alternatives to consider if you still want the convenience driving a car offers.

Car leasing can be a more affordable option than buying, especially for shorter-term needs. With leasing, you essentially "rent" the car for a fixed period, paying a monthly fee. This can be a good option if you don't want to deal with the hassle of selling the car later or if you prefer to drive a new car every few years.

If you only need a car for occasional joyrides or errands around town, car sharing services could be a better choice for you. These services offer ultimate flexibility – you can rent a car for as little as an hour or for a whole day, depending on your needs. Plus, with car sharing services, you don’t have to worry about maintenance or insurance.

Now, with all that information, it’s over to you to make a more informed decision on whether you’re ready for the commitment! 

Owning a car in Singapore can be a pricey affair, but it doesn't have to break the bank. Here are some practical tips to help you manage those car maintenance costs:

Regular maintenance can prevent costly repairs. Following your car's recommended maintenance schedule helps identify and address potential issues before they become major problems. Think of it as an investment in your car's longevity and your wallet's happiness!

Don't just settle for the first car insurance quote you get. Shop around and compare premiums to find the best coverage at the best price, reducing the monthly cost of owning a car. SingSaver can help you compare quotes from different insurers in one place, saving you time and money.

The cost of parking in Singapore can quickly add up, especially with the high rates in many popular areas. Look for ways to save on parking costs, such as parking in cheaper locations during off-peak hours or using public transport whenever possible to avoid paying for parking. Every dollar saved on parking is a dollar you can spend on something more enjoyable!

If you want to stretch your petrol budget further, adopt fuel-efficient driving habits. Avoid harsh acceleration and braking, maintain a steady speed, and ensure your tyres are properly inflated. These small changes can make a big difference in your fuel consumption and impact the monthly cost of owning a car in Singapore.

Car maintenance is a necessity, but that doesn't mean you have to overspend. Compare prices and services offered by different workshops, including authorised dealers and independent garages. Choose a workshop that offers reliable service at a reasonable cost, ensuring you get the best value for your money.

Here are a few reputable workshops in Singapore to consider:

• Spark (by Comfort DelGro Engineering): Offers variety of services ranging from basic car servicing and maintenance to more advanced offerings.

• Gold Autoworks: An independent car workshop that specialises in turnkey car repair and recovery services. 

• Merlin Motorworks: A one-stop car repair, maintenance and servicing workshop

By following these tips and making informed choices, you can keep your car running smoothly without overspending on maintenance.

Ultimately, the decision depends on your priorities and financial situation. If you're looking to avoid COE renewal costs and potentially get a better resale value, selling before renewal might be a good option. However, if you're happy with your current car and don't want the hassle of buying a new one, renewing your COE might be the way to go.

No matter what you decide, when it comes to financing a car, SingSaver can help you find the best deals on car loans and car insurance. Compare quotes and apply online today!

Similar articles

Car Sharing Options In Singapore

Is It Really Worth Buying A Cheaper Red-Plate Car?

The Cost Of Owning A Car In Singapore (and How To Do It)

Buying An Electric Car In Singapore: A Complete Guide

How Much Does It Cost To Rent A Car In Singapore?

A Depreciation Cost Guide For First-Time Car Owners

Buying A Motorcycle In Singapore: A Complete Cost Guide

A Guide to Buying A Commercial Vehicle In Singapore (2022)