Car Ownership

Should you own a car in Singapore?

Some years back, someone declared that he would buy a car because, using public transport took him 45 mins to get to work, and another 45 mins to home after work.

With a car, it just took 15 mins each way. So with a car, he saved an hour everyday on travel.

This was an hour he could spend relaxing, with his family, or just catching up on much needed sleep.

Everyone, he said, has 24 hours a day. If he loses an hour to commuting, he only has 23 hours. So how much is one hour of your life worth to you.

My response was to work out how much the car would cost on a monthly and finally daily basis. I don't recall my exact computation, but let's say it costs $25 a day to own a car. And he saved an hour per day. Therefore, he would have to earn at least $25 per hour. If he earned only $10 an hour, he would have had to work 2.5 hrs to save 1 hour. And that is not "profitable".

Well, with the recent measures to tighten car ownership (SG 2013 Budget, announced on 25 Feb 2013), the Sunday Times provided an analysis of what it would cost to own a car.

Their conclusion? It would cost about $1300 to $2600 per month to own a car.

I don't know how they worked that out, but let's go with those figures. Specifically, let's go with the lower figure.

If it costs $1300 to own and operate a car, then we can safely assume that if you earn $1300 or less, you should NOT get a car, You can't afford it.

Even if you earn a little more than $1300, you should still not own a car because you won't be earning a living. You would be working for your car, and indirectly for the govt (in terms of COE, road tax, ERP, parking fees etc that you pay to the Govt or to govt bodies.)

So even if you earn $2600, do you want to put half your wages into a car?

If we apply the same guidelines for car ownership as for home ownership or accommodation, and assume that you SHOULD not spend more than 30% of your wages on vehicle/transportation, then you should be earning at least $4000 before you even start to THINK about owning a (cheap, small) car.

If I recall correctly, this was the same conclusion I reach all those years ago. I figured that I would need to earn at least $4000 a month before I should own a car that would save me an hour in commute.

A few years later, I bought a re-sale flat close enough to my office that I could walk there. There is now NO savings from owning a car. It is all costs, no benefit. Plus my flat will rise in value. It was a much better solution. For me.

Again, this is not to say you should not own a car at any price. My situation is definitely different from yours. However, be aware of any "rationalisation" you might make to yourself for owning a car, instead of real, objective reasons, and real costs/benefit analysis.

Here's the Cost analysis

Cost of car (including COE, financing fees, interests)
This depends very much on the car you buy, the deposit you make, the loan you take, the interest charged, etc. But for simplicity, let's just take an example of a $90,000 car (COE included), and assume that you can pay for the car in full with a combination of cash and a trade-in vehicle. (Do NOT deduct the trade-in from the costs. That is part of the price.)

At $90k for a 10 year lifespan, it is $9k per year, or about $750 per month. If you had a 100% loan over 10 years, you can use the monthly installments. If you pay in full, this is a straight line depreciation rate.

Fuel. Estimate at $300 a month. This I believe is a low estimate.

Parking. HDB season parking is about $90 a month. If you are driving to work, your workplace car park season charges may be higher. Let's go with a low $100 a month.

Road Tax. Say $100 a month?

Insurance. Say $100 a month?

ERP. Say $100 a month? (These are all for ease of estimation. Use your own figures).

Routine Maintenance. This would probably be very low for the first few years (assuming normal or minimal usage), but as the car gets older, it goes up. Would $50 a month averaged out over the lifespan be too much?

Accidents. You would still have to pay the deductible. But assuming just 1 accident over the lifespan, the cost is quite negligible. And some people NEVER get into accidents. So assume $0.

Total estimated costs: $1,590 per month

Or about $53 a day for a 30 day month.

If you consider only working days, and assume a 23-working day month, it would be $69 a day. This is how much you need to earn a day to cover a $1590 per month cost. This assumes that you and your dependents can subsist on fresh air and sunshine, with occasional showers.


Using the original premise of a car saving you travelling time, assuming you save an hour in commute everyday, you would need to earn $69 an hour. Or about $550 a day, or about $12,700 a month. If you are earning $12,700 a month, you deserve to own a car. Or the government would like you to. (Because, taxes.)

Or you and your spouse should earn about $12,700 combined, which means you won't be living in a HDB flat and you need to adjust your season parking for condo rates.

If you don't save an hour in commute because of owning a car, say, you save only 30 minutes, then you need to earn twice as much. Since you only save 30 minutes, you need to earn $138 per hour. Every hour. 8 hours a day. 23 days a month (assuming 23 working days a month).


If it costs you $53 a day, this means that you can take up to $53 in taxi fares before it makes sense for you to own a car. So if your work requires you to drive a lot, it may make more sense to own a car, but not if you can claim transport for work. Then again, if the transport claim is more generous than actual costs, this can offset the personal costs to you.

So what does it all mean and what should you do?
Every time the government announces some new vehicle ownership curb, or increase in ERP, I am amused to read all the angry reactions in the press and online.

It is already a stated intent that the government is trying to curb vehicle population and vehicle usage. But somehow people seem to think that these curbs and restrictions DO NOT apply to them or SHOULD NOT apply to them.

And they get angry when it does.

If you understand, truly understand that the govt will try to make things difficult for you to own and operate a car, why get angry?

If you want to go against govt policy intent, then be aware that it will cost money. A lot of money today, and more tomorrow.

Be aware that even if you can afford to own a car today, you may not be able to tomorrow.

If you think the Govt should help you to own a car, you are delusional, if not deluded.


Singapore has more taxis than HK, but arguably has less satisfaction with our taxi service. This is a perennial problem. 30 years and counting.

The problem as a lot of people have noted is that Singapore doesn't have even 1 taxi company.


Lion City Rentals (LCR) was a subsidiary started by Uber to "help" would be car-owners to get a car so they can drive for Uber. LCR now touts itself as "the preferred choice" for ride hailing driver partners.

To be fair, I have not worked out the cost of renting and am not familiar with their terms and conditions. If you rent from them, do you HAVE TO BE A GRAB DRIVER?

Their lowest quote (as of April 2018) was $56 a day for a 6 month rental. That is comparable to the $53 a day for a 30 day month worked out above.

Screenshot of LCR's rental rates.

So if you would rather rent than buy, this could be an option.

If you are that desperate to have a car.

Offhand, I can think of a few good reasons to rent instead of buy.

Most important, no long-term financial commitment. From the options above, you can rent for 5 weeks, 13 weeks, or 6 months. Assuming there are no other penalties, deposits, or commitments, you can rent the car for 6 months (for the lowest rental), and if it is too much or you can't afford it, or your financial situation changes, you can just stop the rental.

I am assuming you do not actually need to work as a Grab driver, and that you have a permanent job that allows you to pay about $1700 a month in car rental.

Another "advantage" is (if I am not misunderstanding the options) that you can change cars. Maybe you started with the Attrage for the low rental. Then you need a 7 seater so you swap to the Sienta for a month or so. Then after that you decide to swap to a hybrid to see if the fuel savings is worth it. Again, I'm assuming you can swap cars without extra charges or penalties. If there are charges and penalties, that would be a different consideration.

There are terms and conditions for swapping cars.

But at least you can. If you bought the car, no such option, terms and conditions or not.

So is this a way to have a car and drive in SG? You have to work out the math for yourself. And find out about any extra penalties or charges. LCR makes it look painless and affordable. As they would.

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