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Detailed Breakdown on Costs to Afford a Car in Singapore

Read time: 3 min.

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Have you heard this term when people talk about the cost of a car, it is easy to buy one, but difficult to afford one?

To help you gauge if you can afford a car. We urge you to look beyond the “low down-payment”, “high omv” sales tactics which dealers frequently use. We will take you through the various costs of owning one.

Increasing variety of cars on the roads

This is not a sponsored article, so you will not get recommendations to dealerships, workshops or loan companies. You will however learn some knowledge to help with your next purchase. 

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Fixed Costs

When judging if you can afford a car, find out what the car cost by focusing on 1 word: “Depreciation”

DEPRECIATION is how much a car cost each year. Take the Parf Rebate Value of the car, which is basically 50% of the OMV and deduct this from the selling price of the car. This is the amount the car cost for its lifespan before the de-registration date. Divide it by the number of years and you get the depreciation per year.

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Depreciation for a Toyota Altis is around $10,000

Road Tax depends on the CC of your car. Tax for 2 litre costs around $1,200, 1.8 litre around $976, 1.6 litre around $740 and 1.4 litre at $620 per year.

Insurance varies depending on the type of car based on the classification by the insurance company so it ranges from $1,500 – $3,000 for the average cars. It also depends on the type of insurance you get.

So… Rent or Buy?

If you are considering renting, your rental price should be significantly lower than the total amount of the above fixed costs. Some people are also able to better afford rental than to fork out bigger down-payment to buy one.

Variable Costs

Maintenance of the vehicle

Depends on factors such as the type of car, the way you use it and mileage. It is the greatest variable in a car purchase, especially in the second-hand market. We can streamline the basic costs, so buffer it into your budget accordingly! You could also hold back on maintenance if you can afford it, bear in mind you might have to spend more on servicing if anything goes wrong. The maintenance cost calculated here is assuming you maintain a healthy car.

The first is engine oil flush, you can get it done typically around $140, definitely below $200. You should do this every 10,000km. Second would be tyre balance and wheel alignment which costs typically $20 and $50 respectively, recommended every 10,000km. We assume this cost to incur every 6 months.

Occasional changes would be air-con filter, washer fluid $10. Every 30-40,000km, you should change transmission oil, $70.

Do note that it depends on your car model too. Some cars require the maintenance to be done at a shorter mileage.

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Fortunately can be calculated. Calculate the distance using Google Maps from your home to office, then use $2 per every 10km (assume your car consumes 10km/L) to calculate the price for petrol that you would spend. Assuming mileage to be 20,000km per year, it would cost $4,000 in petrol per year. 

Parking and Cash Card Costs

Should be added in. Season parking in open carparks is now $80 and $110 for MSCP. Add in costs for your workplace. We will assume you top up your cash card per month at $150. This would mean $3,120 per year. 


There are bad days no matter how obedient driver you are. Consider it if you want to be very detailed and calculative. Allocate $150 for it. 

To end this list off, let us calculate the approximate cost of a 1.6L car with a depreciation of $10,000. Proceed on to car shopping if you are sure you can afford it:

Super reserved calculations

We hope you had followed us through our journey to the magic number, $20,280. We urge that you ensure you can afford a car before buying. It is a big commitment! There are other alternatives if you do not need the car as part of your work. Guidesify hopes that you are more informed on this topic after today!

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