Planning to buy a car in 2022?
Here's the Drive lah take.
If you are planning to buy a car in Singapore, you might have already started researching the investment you'll need to buy a car that suits your needs. Chances are, you are already aware of the high cost of owning a car in Singapore. In this blog, we will compare the cost involved in owning a car and the costs you'll have to bear to rent a car in Singapore. Car sharing has gained popularity due to many factors. Let us first look at the cost of both buying and renting a car in Singapore before we conclude which of these suits your needs the best and is financially feasible for you.
The Real Cost Of Owning A Car in Singapore
1. Open Market Value
Many factors contribute to the expenses that you will have to bear. The primary cost is your car's Open Market Value (OMV), the price to be paid for importing a car to Singapore (since we don't manufacture our own cars lah!). But the actual cost of owning a car is way higher than its OMV. Read on to know all the costs you'll have to bear when buying a car in Singapore.
2. Certificate of Entitlement (COE)
COE contributes considerably towards buying a car. To own a car, you must first bid for the COE. Bidding takes place twice a month in Singapore. Once your bid is successful, you'll have a valid entitlement to your vehicle. The COE is valid for ten years from the day of its registration. Each vehicle is listed into five categories (from A to E) according to its type and/or engine capacity. The COE of your car will depend on the category it falls in.
With more and more individuals willing to bid, the COE has gone up to six figures - that's SGD 100K+ - in June 2022 for specific categories of vehicles. Yet, for EVs, the COE is comparatively lower, owing to the Land Transport Authority of Singapore's efforts to reduce Singapore's transport emissions. Several EVs were moved to category A Vehicles from Category B this May. The difference in pricing between Category A and Category B stands at around 30 grand, making EVs a preferred choice for new car owners.
3. Registration fees and taxes
Car owners must pay several one-time taxes and a Registration Fee of 220 SGD when they first get their car. In addition to the RF, you will also have to pay an Additional Registration Fee (ARF), which will depend on the market value of your car. The ARF rate varies from 100-220% of your car's OMV. However, if you decide to deregister your vehicle between 5-10 years of its purchase, you are eligible for a rebate on your ARF. It will depend on the years since you first got your car. Apart from this, road tax is levied according to your car's engine capacity and is to be paid every six months. Additionally, you have to pay 20% of the OMV as Excise duty and 7% GST.
Phew, already worried? Wait, there's more coming your way!
4. Interest on Loan
With the rising cost of living, in order to own a car, you may have to take a loan that lasts up to 7 years. The loan amount you can get will depend on the OMV (70% of the amount can be loaned for cars with an OMV less than 20000 & 60% for cars priced above it). The more you borrow and the longer the duration of the loan, the higher your interest will be.
5. Car insurance premium:
Your car must be insured in Singapore. The insurance amount depends on the car model, its current age, the coverage you want, and your driving history.
6. Running costs:
These costs include the amount you will have to pay for fuel, parking, and ERP (Electronic Road Pricing). Each of these will vary depending on your usage and the locations you'll be travelling to.
You'll have to get your car serviced every six months or when it covers a distance of 10,000 km, whichever comes first.
8. Vehicle Emissions Scheme (VES)
VES was introduced to encourage ownership of environmentally friendly cars. It can be a rebate in case your car emits lesser pollutants. Alternatively, your vehicle could be a surcharge if it exceeds the pollution threshold.
9. In-vehicle unit (IU)
An IU is needed for your car to be able to pay the ERP charges and parking fees. Getting one installed will typically cost you around 166 SGD. Post this, these payments will be made directly through your IU.
Getting the numbers:
Now, let us calculate the cost of buying a car v/s renting one on Drive lah. We are using Honda Jazz as an example for this comparison.
. We are using Honda Jazz as an example for this comparison.
So, the monthly cost of owning a Honda Jazz car will be: S$1316.86
One-time costs for car ownership:
We addressed the monthly expenses. Let us look at the one-time price you have to pay in addition to the above if you buy a Honda Jazz instead of renting one on Drive lah.
Total cost when first buying your car: One-time cost - Rebate = S$88,670.43 - S$10,000
Cost of buying a Honda Jazz in Singapore = $78,670.43
If you choose to rent out the same car from Drive lah, it will cost you S$35/day, which equals S$1050 for 30 days. In this case, you won't be liable to pay the sum of S$78,670.43 to buy the car as you are only renting the car, not buying it.
Buying Honda Jazz: $78,670.34
Renting Honda Jazz on Drive lah: $12,600 per year
Car sharing in Singapore with Drive lah - An affordable alternative to buying a car
With the cost of owning a car skyrocketing in Singapore and becoming unaffordable for many individuals, car sharing with Drive lah is an excellent alternative. Car sharing, in general, is more of a free-floating concept in which, instead of physically going to rent a car, you can simply choose a location on the company's website/app, select a car and rent it right away.
Drive lah is bringing car owners and renters together and allowing renters to easily get a car from their neighbourhood. In an overarching sense, renting a car is bound to save you substantial money - as we could see by comparing the cost of owning a Honda Jazz with the amount you will be paying for renting it on Drive lah.
Here are some more benefits of car sharing in Singapore with Drive lah compared to owning a car:
When renting a car from Drive lah, you need not worry about its maintenance and repair costs. Drive lah provides fully insured cars for a safe and secure journey. In the event of an accident, Drive lah's insurance kicks in. Having partnered with Tokio Marine and NTUC, the car is fully insured during your trip.
You can rent a different car each time depending on the period you need a car, along with the car's specifications. You get the freedom to be behind a new wheel each time you want to rent a car as numerous options are available right, from budget-friendly cars to EVs to luxury cars as well.
Increased flexibility in terms of the period you need the car. You can opt for a long-term car rental on Drive lah in case you need a car daily or simply choose to rent a car by the hour or the day - depending on your plan. You get complete freedom to select the period for which you want to rent the car.
Additionally, since the car isn't yours in the first place, you don't have to worry about the depreciation in its value, nor would you have to bear the hefty costs involved in buying a car in Singapore (which amounted to S$78,670.43 in this case).
Ready to rent a car? https://www.drivelah.sg/