Owning a car in Singapore is often seen as a rite of passage—a symbol of independence, convenience and status. Yet unlike many countries, acquiring and maintaining a vehicle here entails significantly steeper costs, primarily owing to government regulations aimed at controlling traffic congestion and emissions. According to Reuters, even as electric vehicle (EV) sales surge—with BYD becoming the top-selling brand from January to April 2025—Singapore remains among the world’s priciest vehicle markets.
This guide delves into both the upfront and ongoing expenses of car ownership in Singapore in 2025. Our objective is to equip you with a comprehensive, balanced and well-researched understanding, enabling informed decision-making.
Initial Purchase Costs
Certificate of Entitlement (COE)
At the heart of Singapore’s auto market is the COE system, which gives a licence to own and use a car for ten years. Two auctions occur monthly, with prices falling under several categories—most vehicles of interest fall into Category A (≤1 600 cc, ≤110 KW) or Category B (>1 600 cc or >110 KW). As of early 2025, COE premiums are:
- Cat A: S$93 600–96 000
- Cat B: S$109 000–116 600
- Cat E (Open): Around S$115 000
These sums alone often rival the car’s vehicle cost.
2.2 Vehicle Registration: ARF, Excise and GST
Upon winning a COE, further fees are imposed:
- Additional Registration Fee (ARF): Tiered 100–220% on OMV. If OMV hits S$200 000, ARF alone may total S$350 000+
- Excise duty: Standard 20% of OMV
- Goods & Services Tax (GST): 9% of combined OMV + ARF + excise duty (up from 8%)
- Registration fee: A 2.3 Example: Mid-Range Sedan
For a mid-range sedan like a Toyota Altis (OMV ~S$60 000):
- COE (Cat A): ~S$95 000
- ARF + excise + GST: ~S$150 000
- Vehicle cost (excluding COE): S$120 000–150 000
- Total upfront cost: S$210 000–245 000 (≈£120 000)
EV Incentives
Electric vehicles benefit from substantial rebates:
- ARF rebate: 45% capped at S$15 000 until end-2025.
- EV VES rebate: Up to S$25 000
While upfront costs remain high, such incentives ease financial burden and support green transport goals.
Recurring Costs
Road Tax
Based on engine capacity:
- 1 000–1 600 cc: S$600–800/year
- 1 600–2 000 cc: S$800–1 200/year
- Above 2 000 cc: From S$1 200/year upward
EVs incur a separate annual EV road-tax surcharge.
Insurance
Comprehensive insurance typically ranges from S$700 to S$1 600 annually, factoring in age, driving record and vehicle type. New drivers or luxury vehicle owners may pay more—up to S$2 400/year.
Fuel
Assuming ~17 500 km yearly (national average) at 8–15 km/L, and petrol prices around S$2.80–2.90 per litre:
- Annual fuel cost: S$2 666–3 295
- Monthly: S$222–275
Hybrids or EVs can significantly reduce this cost.
Maintenance & Repairs
Typical yearly servicing and repairs:
- Standard servicing: S$500–1 500/year
- Tyres: S$500–1 000 every two years
- Battery replacements: S$200–400 every 2–3 years
- Unexpected repairs: S$500 and above
Electronic Road Pricing (ERP)
Daily congestion charges vary from S$0.50 to S$4 per gantry. Average monthly ERP expenses range between:
- S$50–120 for typical commuters;
- Up to S$240/month in peak zones at S$3 per trip
Parking
Costs depend on location:
- HDB season parking: S$90–120/month
- Commercial locations: Up to S$3–8/hour
- Monthly cost estimate: S$240–1 000.
Miscellaneous
Additional one-off or recurring costs include:
- Car washes & grooming: S$300–600/year
- Accessories: Dashcams, seats, tinting—variable.
- ERP equipment: IU/OBU costs ~S$150, with initial installation and eventual service
Case Study: Mid-Range Petrol Sedan
| Item | Annual Cost (S$) |
|---|---|
| Road tax | 744 |
| Insurance | 1 000 |
| Fuel | 3 000 |
| Maintenance | 600 |
| ERP | 1 200 |
| Parking | 1 440 |
| Washes & grooming | 450 |
| Total recurring | 8 434 |
Monthly recurring cost (~S$703).
Plus depreciation and COE amortisation if you spread COE over the 10-year licence period:
- COE 95 000 ÷ 120 = ~S$792/month.
Grand total: ~S$1 500–1 800 per month.
Comparative Scenarios
- Off-peak vehicles (red-plate): Lower road tax, but restricted use and limited rebate advantages—often unsuitable for everyday travel
- EV ownership: Green rebates reduce initial cost. With rising charging infrastructure, total cost of ownership becomes more competitive—individual analysis needed
- Cabbing/sharing: Services like Grab or BlueSG offer pay-as-you-go flexibility. Many find these far more cost-effective unless daily or frequent driving is essential
Is It Worth It?
- For frequent drivers: The convenience may justify the cost—especially for families, island-wide commuters, or those with mobility challenges.
- For casual users: Public transport, ride-hailing or car-sharing may be more economical.
Singapore’s well-oiled public transit system (MRT, buses) is reliable, often cheaper, and constantly improving. Ride-hailing apps provide alternatives without the long-term financial commitment.
Making Car Ownership Viable
If you decide to proceed, here are tips to mitigate costs:
- Opt for an off-peak or smaller-engine vehicle: Cuts road tax and insurance.
- Consider EV or hybrid models: Leverage rebates of up to S$40 000 and enjoy lower fuel costs.
- Season car parks: Reserve parking early to cut monthly fees.
- Monitor ERP routes: Change commute routes or times to avoid high charges.
- Maintain regularly: Preventive servicing reduces expensive breakdowns.
- Choose insurance wisely: Don’t over-insure; compare quotes and use no-claim discounts.
- Resale planning: Plan for COE renewal costs or sell before expiry to avoid renewal fees.
Looking Ahead
- COE market: Highly volatile—market demand, quotas and economic cycles influence pricing.
- EV infrastructure: Singapore aims to install ~28 000 public chargers by 2030.
- ERP 2.0: Next-gen on-board units (OBU) may replace gantries, transitioning to distance-based charging
- Govt policy direction: Future increases in GST, ERP or COE quotas could further impact costs. Green incentives may expand.
Conclusion
Car ownership in Singapore demands significant financial commitment—among the highest worldwide. Initial costs (COE, ARF, GST) frequently exceed the vehicle’s base price. Recurring expenses—road tax, fuel, insurance, parking and ERP—add thousands annually.
Yet for many, the benefits of autonomy, flexibility and comfort still justify the investment.
Ultimately, the question is not whether a car adds convenience, but whether it provides value commensurate with its cost. By comparing long-term expenses with your commute, lifestyle and finances—and exploring greener or compact alternatives—you can decide whether to embrace the Singaporean car dream.