Cost of Owning a Car in Singapore 2026: COE & Running Costs

Key Takeaways

• Owning a new car in Singapore is expensive. There are many costs added to the vehicle’s cost, including COE, ARF and running costs such as car insurance and maintenance.
• When assessing whether one can afford a car, it is important to understand the various related costs, including monthly loan instalments.
• Buyers can choose between a car loan and a personal loan when buying a car. Car loans typically come with lower interest rates, but personal loans may offer greater flexibility.

Car ownership in Singapore is not just expensive, it is the most expensive in the world!

When you buy a new car in Singapore, you must account for not only the vehicle cost, but also the COE, ARF, Excise Duty, registration fees, road tax, GST and other applicable taxes. On top of that, you’ll also have to pay other ongoing, miscellaneous running costs, such as car insurance, maintenance, parking, ERP, and petrol/EV charging, which inevitably drive up the monthly cost of owning a car in Singapore.

Therefore, it is essential to do the math to understand your exact expenses. Only then can you decide whether the hefty price is worthwhile.

So, what is the cost of owning a car in Singapore? Let’s break it down.

Overview: Cost of Owning a Car in Singapore

The estimates for OMV and ARF are based on LTA’s data for cars registered in December 2025.

Other costs, such as car insurance, loan instalments, petrol (or EV charging), ERP, and maintenance, are variable and depend on factors such as driving behaviour, vehicle age and condition, driver profile, and choice of loan provider.

Open Market Value (OMV)

The OMV is levied on a vehicle by the Singapore Customs when it is imported to Singapore. It includes the purchase price of the vehicle, freight and insurance, amongst other charges incurred when selling and delivering the car to Singapore.

Most often than not, the OMV is usually included in the selling price of a new car, charged by the dealer.

Registration Fee (RF) and Additional Registration Fee (ARF)

RF and ARF are one-time fees paid when a car is first registered for use in Singapore. They are typically included in the selling price of new cars.

RF is currently S$350 per car.

ARF is charged as a percentage of the vehicle’s OMV. The more expensive the car, the higher the ARF, making it one of the heaviest costs of owning cars in Singapore.

Here is the ARF rate for cars registered with COEs from February 2023 onwards.

If you choose to deregister your car before it reaches 10 years of age, you can recoup some of your ARF fees through the Preferential Additional Registration Fee (PARF) Rebate system.

Depending on the age and type of your vehicle, you can receive credits for the balance of your COE and ARF. The younger the vehicle, the higher the PARF rebates it qualifies for.

Following Budget 2026, the PARF rebate amount for cars and taxis has been reduced, with the maximum rebate also capped at half the previous limit.

Excise Duty and GST

Excise Duty, which is chargeable on all imported cars, is calculated as 20% of the OMV.

GST in Singapore is currently 9%, and is chargeable on imported goods and most goods and services.

Both Excise Duty and GST make up part of the final price paid to the dealership for the car.

Vehicle Emissions Scheme (VES)

The VES aims to encourage Singapore car buyers to purchase less-polluting vehicles by offering an emissions-based rebate or imposing an ARF surcharge. The scheme has been extended to 31 December 2027.

The scheme categorises cars into five bands based on the pollutants emitted by their engines. Following the latest updates to the VES, only certain Electric Vehicles (EVs) qualify for the scheme, with hybrid vehicles having been removed. The surcharges have also been revised upwards for more polluting vehicles.

In 2026, the maximum rebate will be lowered to S$22,500, and then in 2027, to S$20,000.

In 2026, the maximum surcharge for the most polluting cars incur has been raised to S$35,000. This will be raised to S$45,000 in 2027.

Certificate of Entitlement (COE)

In order to legally drive on Singapore roads, all vehicles need to first obtain a COE, valid for 10 years.

COEs are obtained via COE Open Bidding exercises held twice a month. There is a limited quota of COEs available in each bidding exercise, which, for the most part, is competitive.

During periods when there is more demand than supply of COEs, COE prices can exceed the sticker price of cars. Today, COE is one of the heftiest costs of car ownership in Singapore, typically costing over S$100,000.

Dealers bid for COEs in the categories that apply to the relevant cars, and then pass on the cost to the buyer.

Here are COE prices from the second bidding exercise in January 2026:

If you elect to deregister your vehicle before its 10-year COE expires, you can apply for COE rebates and be reimbursed for the unused duration of your COE.

Car Loan

The upfront cost of owning a car in Singapore can easily go over six figures. Unless you have enough cash to pay for the car in full, you will need to take out a car loan.

Car loans carry interest, which typically range from 2.48% to 2.78% p.a. for new cars. Note that this is the Advertised Interest Rate (AIR) and not the Effective Interest Rate (EIR).

Interest rates can vary from bank to bank, so make sure you use a car loan calculator to work out your monthly loan repayments and compare car loan interest rates before committing to a loan.

You should also be aware that there is a car loan borrowing cap when it comes to the amount you can borrow to purchase a new or used car.

• For cars with an OMV of S$20,000 and below, you can borrow up to 70% of the purchase price for a maximum loan tenure of seven years.
• For cars with an OMV of more than S$20,000, you can borrow up to 60% of the purchase price, for a maximum loan tenure of seven years.

Suppose you want to buy a new car for S$150,000, including COE. The OMV for the car is S$21,000. That means the maximum you can borrow is S$90,000 (60% x S$150,000) for up to seven years, at an interest rate of 2.48% p.a.

You would thus have to pay a car down payment of S$60,000 (40% x S$150,000) to the dealer, and subsequently, monthly loan instalments of S$1,257. At the end of your seven-year loan tenure, you will have paid S$15,624 in interest, assuming all instalments are paid on time and in full.

Car Loan vs Personal Loan — What’s the Difference?

Other than taking out a car loan, you can also consider a personal loan. Unlike car loans, which use your car as collateral, personal loans do not require any collateral.

Personal loans typically carry higher interest rates, but offer greater flexibility. Depending on your income and credit score, you might be able to borrow more using a personal loan. You can also take multiple personal loans from one or more lenders.

Here’s an overview of the differences between a car loan and a personal loan in Singapore.

Not sure whether a personal loan would be more beneficial for you? You might find it helpful to obtain a free personal loan quote.

Car Insurance

To drive a car on Singapore roads, it is mandatory for you to have car insurance coverage, which protects you from financial losses if your vehicle is involved in an accident. At a minimum, your car insurance plan must protect you from third-party liability. But if you are willing to pay more, you can also opt for fire and theft coverage, or comprehensive coverage, as well as various add-ons.

The price range for car insurance is about S$700 to S$2,500 per year, depending on your age, coverage, car model, vehicle age, and any No Claim Discount (NCD) you might have accumulated over the years.

Road Tax

That’s not all. To drive your car on Singapore roads, you need to pay road tax, chargeable every 6 or 12 months.

The higher your car’s engine capacity and maximum electric power rating, the higher the road tax payable. In addition, cars older than 10 years are subject to a road tax surcharge.

While many variables affect road tax pricing, you can generally expect to pay roughly S$650 to S$2,400 per year for a new car.

Parking, Petrol and ERP

Parking

If you live in an HDB flat, you will need to pay monthly season parking, which ranges from S$80 to S$110 for a first car. You should also budget for other parking charges, such as HDB season parking at your workplace.

Petrol

The monthly cost of petrol depends on many factors, such as how much you drive your car, your driving habits, fuel prices, and your car’s fuel consumption.

Suppose you’re driving a Toyota Corolla Altis 1.6 Standard (A), which has a fuel consumption rate of 15.6km/litre. Your commute to work is 15 km, and you work a five-day work week, so you drive for a minimum of 150 km per week, or 600 km per month.

Based on the latest fuel prices, if your car consumes 95 RON petrol at S$2.88 per litre, you will spend at least S$111 per month on petrol.

ERP

The goal of Singapore’s Electronic Road Pricing (ERP) system is to reduce road congestion. You must pay a fee whenever you drive through ERP gantries at certain hours. Current ERP rates range from S$1 to S$5.

Car Maintenance and Servicing

How often to service your car is a personal choice, but it is advisable to visit a workshop every 10,000 km, or every six months.

While the costs of servicing your car will vary based on your engine capacity, mileage, car model and workshop, in general, the cost of simple maintenance tasks such as topping up the air-conditioning refrigerant, changing the oil and replacing the oil filter is about S$50 to S$200.

A more comprehensive servicing package, which includes inspection of the brakes and other components, topping up of fluid and replacing the air filter, will set you back about S$300 to S$500.

There are also other expenses to consider, such as tyre and other car part repairs and replacements, which can add up to thousands of dollars over time.

Breakdown: How Much It Costs to Own a BYD ATTO 3 in Singapore (10-Year Period)

Based on the above estimates, owning and driving a BYD ATTO 3 could cost you S$244,087 over 10 years.

The above estimates are based on what we would consider average car use. However, if you drive more (e.g., for a sales job that requires you to travel frequently), you might find yourself incurring much higher costs.

Conclusion

Owning a car in Singapore is an immense financial commitment; it is important to carefully consider whether you can truly afford it and avoid overextending yourself financially.

Paying off a new car in full may not always be the most feasible or financially prudent option. Your spare cash may be better used to generate passive income through investments or kept as emergency funds for rainy days. Compare the interest you would pay on a car loan with the returns you could potentially earn should you invest the money.

You should also compare car loans from multiple providers to find the most attractive interest rate.

Find our cost guide helpful? Read our other guide on the cost of hiring a domestic helper in Singapore.