The Real Cost of Owning a Car in Singapore (2026 Breakdown)

Buying a car in Singapore for 2026 If you’re in the market for buying a car in Singapore, here are a few things you need to consider for 2026. With new cars priced from $100,000 to $150,000, add another $80,000 to that with the Certificate of Entitlement (COE) and it may not be as feasible. Public transport or car-sharing could be an option.

• Average new car cost: SGD 100,000 - 150,000
• COE price: SGD 80,000
• Annual road tax: SGD 700 - 1,200
• Mandatory car insurance: SGD 1,200 - 2,500 annually
• COE valid for 10 years, renewable at prevailing rates

The high cost of living and increasingly high prices of vehicles, as well as stricter driving regulations are making the ownership of a car increasingly less feasible. However, public transport can and should provide a practical alternative.

The Cost of Buying a Car in Singapore

Buying a car in Singapore can be a very costly experience. Not only is there the cost of purchasing the vehicle itself but there are many other expenses to take into account. We’re talking about new vehicles here and average costs range between SGD 100,000 to SGD 150,000 (approximately EUR 68,000 to EUR 102,000 or USD 73,000 to USD 110,000) depending on size and features. In this respect, Singapore ranks among the top five of the most expensive countries in the world for car ownership.

The main reason for these exorbitant prices lies with the Certificate of Entitlement (COE) which is a licence imposed by the government on automobile owners in Singapore and is a mandatory document for ownership of a car. COE for a car would be in the vicinity of SGD 80,000 (EUR 54,000 / USD 58,000). And it's only valid for 10 years. The renewals would further add up to the life long costs of the vehicle.

In addition to the COE, the car buyer also has to pay the Additional Registration Fee (ARF) which is 100% of the Open Market Value (OMV) of the car. The road tax for a car can range from SGD 700 to SGD 1,200 per annum (EUR 470 - EUR 820 / USD 510 - USD 880) and the insurance can range from SGD 1,200 to SGD 2,500 per annum (EUR 820 - EUR 1,700 / USD 880 - USD 1,830).

Requirements for Buying a Car in Singapore

You must hold a valid Singapore driving license or have your foreign license converted before you can purchase a car in Singapore. In the latter case, you'll need to pass a basic theory test.

Another compulsory document you need to buy is the Certificate of Entitlement (COE). This document is usually bought through a bidding process. Note that market rates can climb to very high prices. Do take note that the LTA or Land Transport Authority needs to be notified when you purchase a car and you need to purchase Road Traffic Accident and Third Party Risks Insurance or compulsory auto insurance in Singapore to cover road traffic accidents.

Another factor which will affect your car's price is the so-called ARF, or Alternative Rate of Fuel. The ARF is charged based on the OMV (Other Mechanical Values) of your car. It's quite a bit more expensive, and so something to bear in mind when you're making your purchase. Understanding these additional charges is very important in order to avoid any financial surprises.

Common Mistakes to Avoid When Buying a Car in Singapore

Many first-time car buyers in Singapore underestimate the total cost of ownership. It's essential to consider expenses beyond the initial purchase price, such as maintenance, insurance, and road tax, which can significantly impact your budget.

Another mistake made by many is that they don't factor in the COE expiry and renewal costs. As the COE is only valid for 10 years, it's wise to plan for the renewal at the current prices to avoid a cost shock when renewal is due.

One factor that many buyers aren't always considering is the fact that Singapore has a very efficient public transport system that can meet the majority of passengers’ transport needs. Hence, buying a car isn't always necessary for transport needs and alternatively, considering public transport or car-sharing can save a lot of money.

Depreciation on a car is one of the largest cost you'll bear. In order to minimize this cost, I would highly recommend buying a second hand car. The Carbon Emission Charge (COE) fee will also be lower as second hand cars have a shorter COE period.

Cost Breakdown Comparison

2026 Updates on Buying a Car in Singapore

As we look ahead to 2026, we're expecting COE prices to shoot up to make up for the shortage in papers, and the rising demand for new vehicles on the roads of our island republic. As such, the costs of owning a car in Singapore will carry on going up, too.

New Emission Rules To See Changes To Vehicle Registration The European Commission has recommended stricter exhaust gas limits on petrol and diesel-powered vehicles and the rules are set to come into force in the near future. As a result, many more car models are set to be withdrawn from the EU's registration programme. Many of the new emission rules will help to see cleaner air, as well as encourage more low-carbon vehicles on the roads, a move which could help to further boost sales of electric and hybrid vehicles.

Electric vehicle (EV) growth is another area where the market is seeing progress. As Singapore transitions towards a lower carbon future, more charging points are expected to be rolled out, as well as various promotions and incentives for EVs, which should help to further pique consumer interest.

Comparison with Other Countries

According to a report in The Business Times, car ownership is one of the costliest in the world – second only to Luxembourg. Singapore’s unique Certificate of Entitlement (COE) has much to do with this. As far as we can tell, none of the other countries charge anything close to this for the right to own a car.

In addition to affordability of real estate, another factor that contributes to a car being a luxury item is efficiency of the public transportation system in a country. In Singapore for instance, transport public is highly efficient, hence there isn't really need for owning a car. In most countries though, owning a car is more of a need rather than a luxury due to poor transport infrastructure.

This efficient public transport system encourages the use of public transport rather than car ownership for locals and expatriates alike.

Local Regulations and Cultural Tips

To own a car in Singapore, it's important to know the regulations and rules that apply to them. For instance, a Certificate of Entitlement (COE) is only valid for 10 years and will need to be renewed when its period expires, with prices set at the prevailing rate. Another requirement for a car in Singapore is for it to be bi-annually tested for roadworthiness and to comply with the prescribed safety checks. The testing exercise is required for all cars that are more than three years old.

Electronic Road Pricing (ERP) charges are imposed during peak hours in specific zones and adding to the cost of travelling by car to the city. The purpose of ERP charges is to manage congestion and to encourage the use of public transport during peak hours.

Driving in South Africa is on the left-hand side of the road which may be different for those arriving from right-hand side driving countries. Parking in towns can be extremely costly and in terms of availability often a problem.

Optimise your business travel as ER Presumptions kicks in Plan your trips carefully to avoid peak ERP hours and zones. It’ll save on transport costs, as well as prevent getting stuck in long jams that take you way off track.

Vehicle Registration Process in Singapore

The Vehicle Registration Process in Singapore Purchasing a vehicle is one aspect, while registering it's another. The vehicle registration process in Singapore begins with the obtaining of a Certificate of Entitlement (COE) through a closed bidding process. After the COE has been won, registration of the vehicle with the Land Transport Authority (LTA) must be done.

you'll have to pay the Additional Registration Fee (ARF) when you register your car. The ARF is chargeable on every car, and it's calculated based on the Open Market Value (OMV) of the car. One of the most costly components of owning a car, you should factor in the ARF fee as an important expense to consider.

In order to complete the process of Vehicle registration, you have to purchase compulsory Automobile Insurance. This is to mitigate risks and liabilities as well as to comply with the laws of the road in Singapore. Care should be exercised when selecting a general Insurer and the coverage of the policy as this may affect the purchase of the vehicle.

Tips for Expats Buying a Car in Singapore

Getting a Singapore Driving License is a compulsory process before buying a car in Singapore. For expats who have recently relocated, obtaining a Singapore license will entail converting their foreign driving license. Expats need to pass a basic computerised theory test (CAT) and may need to undergo an eye test to ascertain whether they need to wear corrective lenses. Elms & Co can arrange for this on the client’s behalf. In some cases, expats need to complete a compulsory licensing course at a testing centre or may be required to obtain a medical form or go for a medical examination.

Buying a Car in Singapore? You Need to Read This It’s common for expats to be clueless about car ownership costs in Singapore, largely because of the system known as Certificate of Entitlement or COE. In this post, we’ll share with you how the COE works and why it’s important to budget for it and other long term costs so as to avoid any shock to your finances.

Alternative options to owning a car, that may be more suitable for the expatriate include the use of public transport and/or car-sharing companies. The use of public transport and/or car-sharing companies can be a cost-effective option for individuals only occasionally requiring the use of a car.

Pro Tips for Saving Money on Car Ownership in Singapore

Thinking of getting a new car? You might wish to reconsider as new cars depreciate very fast. Not only that, the Certificate of Entitlement (COE) can be very pricey. Considering a used car will definitely help you to save on the depreciation cost of the car as well as help you to keep your COE cost low. Used cars usually have shorter COE periods, which also means you'll have to pay less for it.

Fare alert: ERP charges are in place Effective 19 June 2022, ERP charges will be reintroduced on all vehicles. We recommend planning your trip to avoid peak hours and zones to keep costs low and journeys quicker.

Regular maintenance checks and servicing are crucial to maintain the overall health of your vehicle, prevent costly repairs and to extend the lifespan of your car.

Making the most of your transportation dollars in Singapore By using public transport to the maximum for your daily commute, and keeping car usage limited to weekends and special occasions, you'll enjoy the greatest possible savings. Using public transport is efficient, convenient and works out to be cost effective too.

Frequently Asked Questions About Singapore

What is the COE in Singapore and why is it necessary?

The Certificate of Entitlement (COE) is a document needed by car owners in Singapore, in a bid to keep down the number of vehicles on the road, ease congestion and lower carbon dioxide emissions.

How much does it cost to maintain a car in Singapore annually?

Repairing any issues with the car can cost anywhere between SGD 2,000 to SGD 5,000 which can include the renewal of insurance, road tax and also servicing of the car.

Can expats buy a car in Singapore?

Yes, you can buy a car if you have a Singapore driving license (or if you convert your foreign license).

Are there alternatives to owning a car in Singapore?

Public transportation works very well, and car-sharing is quite cheap.

What are the common pitfalls when buying a car in Singapore?

Without proper accounting of COE, taxes, and maintenance, one can land into financial distress.

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