Is it expensive to own a car in Singapore?

Owning a car in Singapore is often considered prohibitively expensive due to a combination of factors that make it one of the costliest places in the world to own and operate a vehicle. These factors include high taxes, limited road space, comprehensive public transportation, and environmental considerations.


One of the primary reasons for the exorbitant cost of car ownership in Singapore is the government’s efforts to manage traffic congestion and limit the number of vehicles on the road. In order to discourage excessive car ownership, the Singaporean government employs a complex system of taxes and fees that significantly inflate the price of purchasing a car. The most notable of these is the Certificate of Entitlement (COE), a quota system that grants individuals the right to own and use a vehicle for a period of ten years. COEs are limited in number and are auctioned off regularly. The demand for these certificates far exceeds the supply, leading to skyrocketing prices and fierce competition among potential car owners.

Furthermore, the Additional Registration Fee (ARF), a tax based on a percentage of the car’s open market value, adds significantly to the overall cost. The ARF can reach up to 180% of the car’s value, making even moderately priced vehicles considerably more expensive. Additionally, there’s the Goods and Services Tax (GST), which is applied not only to the car’s purchase price but also to the COE and ARF, further compounding the financial burden.

Singapore’s compact size and efficient public transportation system also contribute to the perception that owning a car is unnecessary. The island city-state boasts an extensive network of buses, trains, and other modes of public transport that offer convenient and affordable options for getting around. With such a well-developed system in place, many residents find it more practical to rely on public transportation for their daily commute, avoiding the hassles of traffic congestion and high parking costs.

Environmental considerations play a significant role as well. Singapore is committed to reducing its carbon footprint and encouraging sustainable practices. As a result, the government has implemented measures to promote the adoption of electric and hybrid vehicles, offering incentives and rebates for environmentally friendly choices. However, the initial high cost of these vehicles, coupled with the existing taxes and fees, still makes them relatively expensive options for the average consumer.

In conclusion, owning a car in Singapore is indeed exceedingly expensive due to a combination of factors, including steep taxes and fees, limited road space, the efficiency of public transportation, and environmental priorities. The government’s efforts to manage traffic congestion, promote public transport, and reduce carbon emissions have led to a complex system that drives up the costs of car ownership. While some individuals may still choose to own a car for specific reasons, such as convenience or certain job requirements, the overall consensus remains that Singapore’s comprehensive public transportation system provides a viable and more cost-effective alternative for most residents.