Can you really afford a car in Singapore?



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Buying a car is just the first step of your ownership journey. Here’s a breakdown of what else to budget for after

SINGAPORE — We’ve de-mystified the agonisingly acronym-heavy world of car-buying here, shown you what to look out for with car loans and even answered the question of buying new or used.

Now you’ve saved the money for a downpayment and can set aside the monthly loan installment. Time to buy a car? Not yet. First you have to view the rest of the picture, and see how financial pieces all fit together.

You might want to whip out the calculator (again) and read this article to find out what it really costs to drive a car in Singapore.

For each example we’ve chosen the Toyota Corolla Altis — as a multi-generational favourite that is ubiquitous on the roads, there’s surely nothing better.

Road Tax
Before you’re allowed to actually drive on public roads, you’ll need to pay Road Tax, which can be calculated here by engine capacity — if you have an older car you pay a surcharge of 10 percentage points extra, until you’re taxed at 150 percent the normal rate.

For the Toyota Corolla Altis, you’ll pay $742 per annum. Budget $62 a month, in other words.

Monthly Cost: $62

Insurance
Somehow everyone always forgets about car insurance, but it’s a non-optional cost of running a car. And you never want to have it, but when life catches you out, you’ll be glad for the safety it brings.

But it’s a difficult one to budget for, because it varies considerably according to a number of factors: your age, our years of driving experience, your accident history, even your gender.

Yet, maintaining the Corolla Altis as our example, but varying the drivers gives us some idea of how annual insurance premiums can differ.

Say you’re a professional, single and brimming with youth at age 27, with no previous car ownership history, but at least five years’ driving experience and no insurance claims to your name. Someone like you would pay $3,000 a year to insure your Altis.

If, on the other hand, you’ve settled down at the ripe old age of 41, with a 50 percent no-claims discount thanks to years of owning a car without incident, you would pay around $1,100 to insure the same car.

Shopping around for insurance can help, and dealers often have better deals for insurance. For example, Borneo Motors and AIG offer a two-year insurance deal which means paying less per annum and other benefits such as a new car replacement in case of a total loss, a courtesy car and medical expense coverage.  

Our advice? Make sure that whichever insurer you choose will pay for repairs at whichever workshop you choose (instead of covering repairs from only a list of approved workshops). That way, if you need to undo a boo-boo, you can do it at your authorised dealers’ bodyshop, where original parts will be used and, more importantly, your warranty will not be at risk.

Monthly Total: $62+ $250 =$312

Petrol
While people vary hugely in driving habits, we can guess-timate this by using an average figure. According to the Land Transport Authority’s statistics from 2015 the average Singaporean driver covers 1,458km a month.

In our chosen Toyota Corolla Altis which gives an official 6.5L/100km (although it’s quite easy to improve on that), so it uses 1,136.4 litres of fuel per annum.

With the average 95 RON fuel costing $1.767 after discount, that’s a yearly fuel bill of $2,007.95. That’s $167 a month, although to be conservative you could estimate $200 a month to be safe.

As an aside, if you drive a Toyota Prius instead, 3.7L/100km is a reality, which means it uses just 647.4 litres of fuel per year, costing only $1,144 to feed — less than $100 a month.

Monthly Total: $312 + $167 = $479

Servicing and repairs
New cars don’t require a huge amount of maintenance — just a check and an oil or filter change every standard service, which is typically every 10,000km or six months, and a more thorough major service every 20,000km.

For our chosen Corolla Altis to be serviced by experts it costs $253 for a standard service and $368 for major service, or $253 for the first year of ownership, or $21 a month.

But if you nabbed a DriveHappy with Toyota deal with three years’ free servicing, that would save you three standard and two major service costs, or $1,495 in total over three years.

One tip: Buying a new car means you don’t have to worry about repair costs for at least a few years if you buy from an authorised dealer. The comprehensive warranty that they offer should take care of that.

Monthly Total: $312 + $167 = $479

Parking and ERP
Parking is the hardest to gauge an average of, but we assume if you can own a car you’ll need somewhere to put it, plus a job. So that’s $65 in monthly HDB season parking (which is the cheapest. It’s $90 for a multi-storey car park lot) and we’ll assume the same rate for a non-resident tenant in a HDB-landed business for office season parking. Of course, season parking in the CBD or a normal mall is much more expensive. So that’s at least $65 bucks a month, and for two season tickets per year that’s $1,560 per annum.

We also have to take into account hourly parking and Electronic Road Pricing.

Let’s assume you spend two hours a week in random parking lots at the HDB-rate of 50 cents per half hour at non-restricted car parks, that’s $104 a year for parking, or $8.70 a month.

We’ll also assume you stay in a new town, like Clementi, and travel on the AYE at 8am which is $1.00, but end after 1900h, so that’s 260 work days a year, or $260, which is $22 monthly.

There there are those weekend jaunts to suburban malls or the odd venture into a hotel carpark. Even at $10 a week, that adds up to… quite a lot. The bottom line? Between season parking and feeding that insatiable CashCard, you might have to set aside at least $200 a month.

Sounds pricey? Well we actually have it quite easy – in Tokyo and Hong Kong, a season lot can easily cost $1,000 or more per month.

Monthly Total: $479 + $200 = $679

That’s probably more than what some of you expected but keep in mind this is really just an estimate. Some people commute during peak hours, some don’t, while others may or may not need a season parking lot.

Overall though, it is possible to reduce ownership costs with good planning and a light, right foot, while other costs will decline with age, most notably insurance. With Singapore’s competitive car industry, it’s also quite easy to snag good deals like the ones we’ve highlighted to help shave down some of the costs.

Also, don’t forget that our monthly estimate doesn’t take into account what you’re saving by no longer taking buses, trains and cabs.

But what’s hardest to calculate of all is how much joy car ownership can bring you, and how much the freedom to drive yourself around in the privacy and comfort of your own car is worth to you.

If you tally all the monthly costs above, and add it to the cost of actually buying and financing the car itself, then you’ll be fully prepared and have a clearer idea of what it entails. Without any weird surprises, it’ll make the joy of car ownership an even greater one.

After all, the point is not merely to drive, but to drive happy.

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