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28 Jun 2016 | Text by Desmond Chan, Photos by Low Fai Ming & ST | Category: Car Buying Advice
Why are cars so expensive in Singapore? We dive deep into the numbers to figure out just how much it would actually cost to drive a Toyota Corolla Altis on our roads.
Between 2005 and 2015, the car population grew from 438,194 to 602,311, according to Land Transport Authority (LTA) statistics. Also, the high costs of driving expenses like petrol, parking and Electronic Road Pricing (ERP) further exacerbates the matter.
But the more pertinent question here is this - just how expensive is it to own and drive a car in Singapore?
In this number crunching exercise, we will use the Toyota Corolla Altis (one of the most popular cars on our roads) as a case study, as we try to approximate the average cost of owning and running a car for the average Singaporean driver, over the full 10-year lifespan.
Making an $18k Toyota to a $116k one
As we all know, buying a new car in Singapore from the offset is extremely expensive. In a previous article, we had broken down the specific factors that contribute to a car's price in Singapore.
A base model Toyota Corolla Altis 1.6 Standard from Borneo Motors is listed at $115,888 (as of 24th June 2016), with a Cat A COE of $55,200. Its current OMV is listed at $17,920. For comparison, prices for the Corolla in the U.S.A begin at $17,300 (S$23,200). In the U.K., prices for an equivalent Auris begin at £14,495 (S$28,686).
With the Altis, assuming a buyer takes the maximum loan amount and period according to the new MAS ruling, the initial 30 percent downpayment amounts to $34,766.40. That's already almost twice the OMV of the Altis. Taking a bank loan through Toyota's in-house financing will incur a 2.78 percent per annum interest. Using sgCarMart's loan calculator, that puts the monthly instalment at $1,154 over seven years. When we aggregate it out across 10 years, that amounts to $807.60 a month.
While you admittedly will get some money back at the end of 10 years because of the PARF rebate, we won't factor that into the eventual cost per month simply because you can only see that money a decade later when you scrap your car.