If you are looking to buy a new car or have read our previous article, you would have known that COE prices are seemingly increasing with every bid. Should you buy a car now? Perhaps you are thinking that in Singapore, there never is a right time to buy a car. Which we all can agree to since our cars cost at least twice as much as cars in other countries and that our public transport is rather efficient. However, it is undeniable that having your own car brings you at the very least, convenience and for others, having a car might even be a necessity due to various commitments. Today, we will discuss how much it costs for an entry vehicle and whether you should purchase a vehicle now. If you are an existing car owner, looking for a change in vehicle, this is relevant for you too!
How much does it cost to buy a car in Singapore now?
With respect to current COE prices being as high as $99,999 just for a “piece of paper”, you can expect that cars would cost significantly more than the last time you were looking for your vehicle. The cheapest car you can find in the market is currently the Perodua Bezza priced at $102,999 of which $72,996 amounts to the COE (Cat A COE). Currently, the high price of vehicles is mainly attributed to the price of current COE price, which using the Perodua Bezza as an example, 70% of its price selling price is due to the COE price. And if you are looking at more popular sedans in this category, the Mazda 3, Hyundai Avante and Toyota Vios would set you back about $120,000 to $130,000.
Now that is just a small part of the equation. Insurance, road tax, parking fees, maintenance and fuel costs have yet to be accounted for.
|Additional costs of owning a car*|
|Wear and tear||$200|
Here, we have assumed a 1500cc vehicle that clocks 18,000km in a year and has a fuel consumption of 15km/l. Of which we use to derive for the petrol and road tax. Parking is assumed to be just season parking at HDB carpark at the place of residence.
With that, you can see that the additional cost incurred is at least $6226. Meaning to say, over 10 years you would have spent at least $180,000 on an “affordable” sedan and about $160,000** on the cheapest one available in the market and that all is before any interest is accounted for when taking a vehicle loan.
*Do note that this is a conservative estimate for the costs and is not an accurate representation of actual usage as usage varies between different drivers.
**assumes the same additional costs for both vehicles.
Should you buy a car now?
If you need a car and you can afford the price of the car and its additional costs, it might not be a bad decision to get it. However, if it is just a want, you should reconsider as COE prices are at a high. We suggest at least waiting till the next quarter (May to July) to monitor the COE prices before making a move. With the announced increase in the supply of Category A COEs, there is a chance that the prices for Category A COE to fall. If that is the case, it will make it a better time to buy then.
If you are a car owner and your car is about to reach its 10-year mark in the coming months, this is a time to consider scrapping the car with us to offset your next car purchase as we previously discussed, we do not think that it is worth to renew COE at this conjuncture due to its high price. A new car may be the wiser decision in the long run.
All in all, owning a car in Singapore is not cheap but depending on what you value, it might still be worth it albeit a financially unwise decision for many of us. We do hope that what has been discussed here allows you to understand why a car cost so much here in Singapore in 2022 and do remember to take note of the additional costs which many fail to factor in before purchasing a car. Whether or not you should buy a car will have to depend on your circumstance and requirements, but we wish that this article has given you more insight into doing so. We hope this allows you to make the best decision for yourself!