I have been trying to get to the bottom of all the rumours and gossip about how expensive it really is to drive a car in Singapore. I think it’s world-wide known that driving a car in Singapore is expensive. But what does that mean exactly and would I be able to afford a car or not?
To start of, let me summarise some measures that have been introduced in Singapore to control the amount of cars on the road (Vehicle Quota Schema):
1. The COE (Certificate of Entitlement) scheme. Anyone wishing to buy a car or motorcycle has to bid for a Certificate of Entitlement (COE). Each month, a certain number of COE’s are released for bidding and if successful, the vehicle entitlement is valid for 10 years from the date of registration of the vehicle. The scheme aims to peg long-term vehicle population growth at 3 per cent a year. Every month, between the 1st and 7th people can tender/bid for a COE and when you do, 50% of the tender value will be deducted from your bankaccount as a deposit. The latest results of the bidding are around S$15.000 per certificate.
2. Vehicle Tax and Registration fee. All imported cars have a 41% duty and a registration fee between S$1000 and S$5000. In addition, when a car is first registered (whether new or used), an Additional Registration Fee (ARF) of 150 per cent of the car’s Open Market Value is payable. This really defines the price or cost of a car.
3. ERP (Electronic Road Pricing) is Singapore’s latest attempt at tackling traffic jams during peak hours. ERP is based on a pay-per-use principle that is intended to reflect the true cost of driving. ERP has been extended to choke-points on other expressways and major roads in order to alleviate congestion, especially at the dreaded 8.30am-9.00am timeslot where charges and traffic alike are at their highest. 8.25am sees a free for all before the ERP gantry as drivers try and ‘beat the increase’ while 8.59am sees traffic slow to a snail’s pace for the same reason! All in-vehicle units with NETS card for automated payment have now been installed in vehicles and every new car purchased in Singapore must have one.
4. Road taxes are renewable on a six-monthly or yearly basis. You may only renew your road tax if your vehicle has a valid inspection certificate. Cars between 3 to 10 years old must be inspected once in 2 years; cars older than 10 years must be inspected every year. Motorcycles and scooters must be inspected once a year only if they are older than 3 years. Inspection notices are sent to vehicle owners three months before the road tax expires.
So, can I afford a new car as a newly registered expat with the intention to live here for a limited amount of time? Some estimates (including annual registration fee, import duty, road tax, registration fee and number plates) are: Compacts S$185,000; Sedans 328 S$240,000; Luxury Class S$200,000. A new car with new registration will cost roughly twice the amount as in Europe or Australia.
I think I’ll stick with public transport, because there’s a lot of S$0.90 bus fares in a S$185.000 car. I wasn’t seriously considering buying a car, because Singapore is relatively small and public transport and taxis are fantastic. Considering I don’t have kids and my employer is not paying for the car, the schemes above are actually OK. Imagine Singapore without any control on the amount of cars, I think it’ll end up being one long traffic jam. But I can imagine that some people would be struggling to drive a car, if they need it for groceries, dropping the kids of at school and commute to the other side of Singapore every day. On the other hand, you still see quite a lot of Ferrari’s, Aston Martins and Lambo’s around, which even without all these costs would be near impossible to buy anywhere else in the world.
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Marije (7)
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babsi und troysi (4)
Hi Joost,
You forgot about weekend cars.
Will be in Singapore 15th and onwards, have a beer?
Georg