From our previous post regarding Singapore Vehicle Growth Rate, we have received a number of calls looking for advice for car buying tips.

Car buying in Singapore is said to be an expensive investment, next only to buying a residential apartment. There are various factors responsible for this including the taxes, fees, duty, insurance, maintenance, fuel, freight; dealer margin and car loan interest.


The process of buying the car in Singapore is almost the same for citizens, PR and foreigners unless you decide to import a new car into the country. You need to consider three distinct parameters related to technical, commercial and legal aspects.

Technical Parameters of Car Buying in Singapore

Durability, performance, luxury, comfort and fuel consumption are the main technical aspects of concern while buying a car in Singapore.

  • Engine Performance: – Check the factors like the capacity in horsepower, displacement volume in CC, road load power, stroke volume, speed, specific fuel consumption acceleration limit per hour and effective power. You can compare three to four brands and their multiple models before deciding on the best.speedometer-display-dial


  • Fuel Type: – You can consider the diesel, Petrol and electric powered cars (since December 2017) for buying. In spite of the diesel engine efficiency, fuel cost and ability to run on bio-diesel, you need to pay a special tax for the diesel car which is six times the road tax. Since the electric cars are yet to become popular your choice now could be the petrol engine car.
  • Luxury and Comfort: – The level of luxury and comfort in your car depends on the brand and model you buy. An increase in the original market value of the car can cost you added registration fee ranging from 100% to 180% and other taxes.
  • Fuel Consumption: – Look for cars with fuel efficiency and lowest carbon emissions (<160GM/KM). You will be eligible for rebates ranging from S$5,000 to S$20,000. A vehicle with higher carbon emission (>211GM/KM) can attract same amounts of penalty in the form of surcharge).

Legal parameters of Car Buying in Singapore


  • Taxes: – The main taxes for private cars in Singapore are GST, road tax and special tax. GST is applicable to 7% of original market value (OMV with effect from July 2017) + the excise duty you pay. The road tax depends on factors like engine capacity in cc, vehicle age, vehicle scheme (Non-OPC, revised OPC or old OPC) and fuel scheme (petrol or diesel). The net road tax is the sum of road tax and annual road tax surcharge. A special tax is applicable for diesel cars.
  • Excise Duty: – Excise duty for your car will be 20% of the original market value of the car.
  • Mandatory Fees: – COE (Certificate of Entitlement) is the fee you pay for the right to own your car. This is applicable to two categories (A-cars below 1600CC and B for above 1600CC). This is a recurring fee which you need to pay after every 10 years as registration fee. You can bid for the COE (registration number) from the first and third Monday of the month (at 12 PM) and end on Wednesday at 4 PM Singapore time. The COE average cost in early 2017  stood at s$499,000+. The other fee is the additional registration fee (ARF between 100% (<S$20K), 140% (>=s$20K and <S$50K) and 180% (>=S$50K) of OMV). If you buy a car from OMV >S$50K you need to pay the sum of ARF under all the three slabs. The other fees are for basic registration, carbon emission scheme and processing.
  • Insurance: – The car insurance premium and other overheads depend on policy type, NCD (No Claim Discount), performance, safety and other regulatory factors. Car insurance is mandatory for driving in Singapore.
  • Dealer margin: – Dealer margin is the fee you pay for your car dealer which depends on the individual company. You can check with more than one dealer for the same brand and model before taking a decision.  


Financial Parameters of Car Buying in Singapore

If you can afford to pay the entire costs for buying your car you will be under no obligations. Otherwise, you might need to take the help of car loans from the private banks, financial institutions or the car dealer.

  • Interest Rate: – The interest rate you pay at the banks depends on net finance value, finance period (maximum of 7 years on average), car brand and model.
  • Eligibility: – Eligibility factors for the car loan include employment/self-employment proof, monthly salary, affordability, the guarantor (terms might change for non-guarantor loan) etc Once you are able to clear all the requirements you can apply for the car loan.

If you intend to purchase a car and have any further questions, feel free to contact Car Source and get some free advice.