4 Hidden Costs of Owning A Vehicle in Singapore

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In Singapore, the cost of owning a vehicle is not cheap as running a country with severe land shortage discourages individual vehicle ownership.

Besides the Certificate of Entitlement system, other disincentives include Electronic Road Pricing, hefty petrol taxes, expensive parking and so on.

Despite all these, Singaporeans still aspire to own a vehicle as it offers convenience not available to commuters on public transport.

After doing the math, one might be convinced that one could well-afford to drive based on one’s salary.

However, before you head down to the showroom, here are 4 hidden costs of owing a vehicle everyone living in Singapore should know.

car and keys

[image credits: www.theguardian.com]


Hidden Cost 1: Opportunity Cost

As a driver, I do not deny the convenience I enjoy. However, the convenience comes at a price.

Let’s take a look at the breakdown.

A brand new car with COE easily costs upwards of $100 000 and for the sake of this illustration, let’s stick to $100 000 as the cost.

Assuming that the owner makes a 40% down-payment and takes a loan over 5 years, the monthly installments would easily amount to $1000 per month.

Excluding the monthly expenses, the amount of money spent on car ownership alone, if invested at 5% compound interest would be about $126 000 after 5 years.

This figure would definitely be higher if one takes into account the other monthly expenses such as parking, insurance, road tax, regular maintenance and petrol which will cost at least $400 monthly.

The astronomical sum involved would definitely mean that car owners have to forgo investment opportunities such as buying shares when they bottom out, as we are driving away our own fortune quite literally.

Hidden Cost 2: Unforeseen Repairs

Aside from the fixed monthly expenses, one also has to account for the unforeseen repairs which are inevitable as a vehicle owner.

This will come about even if one is a zero-accident driver or drives a very reliable brand, simply because vehicles are subject to wear and tear.

In my 7 years of driving, my unforeseen repairs included changing tyres due to impact, overhauling the gear box, compensating another vehicle owner for accidentally knocking into his vehicle, changing my electrical system, changing my bumper due my own carelessness, and a few other incidents.

This is on top of what I am spending on routine maintenance, and the bill easily ranges from hundreds to thousands of dollars at a go.

Hidden Cost 3: Summons

Regardless of how careful one is on the road, it is inevitable to avoid summons as a driver.

The summons can be as minor as miscalculating the parking coupons which range from a few dollars to more serious traffic offences that leads to fines and demerit points.

The silver lining is that most of the summons could be avoided if one were to exercise caution and abide by the law.

traffic warden

[image credits: www.fivestarsandamoon.com]


Hidden Cost 4: Negative Mental Energy As An Owner

Most car owners have a sense of satisfaction holding on to the car keys the very first time.

However, there is always the other side of the coin. Car ownership involves an intangible cost – it exacts a toll on our mental and emotional health.

From not being able to find a parking space when you urgently need it, to being stuck in traffic, or worrying about getting scratched and so on.

In recent years with our flash floods, you also worry if your vehicle will sustain water damage if it rains too heavily.


[image credits: wwwdirectasiacom]



Despite the costs, I am still willing to drive as the public transport system is still too far from perfection.

For distances which can be covered within 10 minutes by car, it may take at least 30 minutes to travel by public transport.

Furthermore, having a car enables me to explore nooks and crannies of our island inaccessible by public transport, as well as take self-driven holidays to Malaysia.

That being said, one can lower the cost of ownership by timing the purchase of car or by purchasing a budget ride.

Are you prepared to handle the hidden costs of car ownership in Singapore? Let us know if there’s anything else that could cost a bomb!


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LYS is a typical Singaporean in his 30s who is married with a son. Like many, he is interested money and has spent his time learning a lot about it. He likes to write and wishes to share his experience on his relationship with money.

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