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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.

Category: Car Buying Advice


Why are cars so expensive in Singapore? The easy answer is that the Government is trying to curb the car population by driving prices upwards and making cars more unaffordable. However, this does not seem to have a drastic impact on the car population in Singapore.

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.

We crunch the numbers to figure out just how expensive it is to own a car in Singapore

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 $106k 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.

Effectively, a brand new car in Singapore could cost anywhere between 230 to 310 percent of the cars Open Market Value (OMV), and this does not include the mark-up by the dealers, as well as the Certificate of Entitlement (COE), the biggest gripe of every Singaporean driver. All those numbers add up to a scary total.

Our calculations are based on a Toyota Corolla Altis purchased from Borneo Motors

A base model Toyota Corolla Altis 1.6 Standard from Borneo Motors is listed at $99,988 (as of 12th April 2018), with a Cat A COE of $37,000. Its current OMV is listed at $19,741. 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 $29,996.40. 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 $995 over seven years. When we aggregate it out across 10 years, that amounts to $696.50 a month.

Cost of owning an affordable car like the Toyota Altis can be quite high in Singapore

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.

Cost of owning and driving that $106k Toyota

It is here that all the small numbers really begin to add up. Let us briefly profile our Altis owner - a 28-year old adult who works in the Central Business District (CBD), he lives in a typical HDB flat and travels out on the weekends with his family. Sounds about right?

1. Road Tax

The yearly road tax for the Altis is $744, which works out to $62 a month.

2. Insurance

Based on available online quotations for Aviva car insurance for an Altis, and working in the No-Claim Discount over 10 years, that will come up to a total amount of approximately $9,000. That works out to $75 a month.
3. Maintenance

While it can be hard to estimate an amount for car maintenance, as many things (or hopefully nothing) can go wrong with the car, we will try our best. Regular basic servicing at a generic workshop, like changing oil and filters, should cost about $250 a year.

Other more major servicing as well as repairs, such as replacing belts, servicing the air-con, as well as replacing tyres and fluids, etc, will happen at more infrequent intervals, but let's say it comes up to a total of $10,000 over 10 years. That's a total of $12,500 over 10 years, which works out to $104 a month.

Rising petrol prices prove to be a pain to any driver's wallet

4. Petrol

The Altis has a listed fuel consumption of 16.3km/L, but in Singapore conditions let's say a conservative driver achieves around 13km/L. From 2010-2014, the most recent statistics available from LTA Statistics in Brief puts the average annual kilometres travelled per vehicle at 18,320km for cars. Using that as a ballpark figure, that translates to 1,526km a month - that is 117 litres of petrol. By pumping Shell FuelSave 95, which after discount now costs $2.138 per litre (after discount), that comes up to $250 of petrol a month. 

5. Parking

HDB season parking costs between $65 to $90 a month, depending on whether it's an open-air or a multi-storey carpark. Let's average that out to $77.50.

CBD season parking is a widely variable figure depending on location, and a Colliers International survey done in 2011 found that Singapore's median season parking fee in the CBD was $278.20 per month. Considering prices have gone up since then, we conservatively estimate about $350 a month.

ERP and parking charges will definitely drain the cashcard

No doubt, additional parking charges will also be incurred when going out on weeknights and weekends. Let's peg it at around $7 a week, assuming the driver puts in the effort to avoid expensive carparks. That all adds up to $455.50 a month.

6. Electronic Road Pricing (ERP)

Our Altis driver pays $2 as he passes through an ERP gantry going into the CBD every morning, totalling $40 a month. The occassional weekend foray into town will push that figure up to $50.

Add all of the above figures up, and the eventual cost to actually drive the Altis on the road comes up to $986.50 a month.  

Servicing your car on a regular basis must be put into account before committing to getting one

Conclusion

Basically, to put a brand new Toyota Corolla Altis on the road and drive it for the next 10 years, you should expect to pay a minimum of at least $1,981.50 a month for the first seven years, and $986.50 a month for the last three. Over 10 years, that aggregates to $1,683 a month. This does not take into account inflation and other price changes, of course, as well as any other unforseen expenditure. 

Even with our very conservative estimates, that is still a lot of money. So, before you do decide to buy a car, be very mindful about the various costs involved, and we implore that you do careful and extensive calculations of the math involved, and figure out whether you can truly afford the car.


*This article was updated on the 17th February 2018.


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