Clever Ways to Reduce Cost of Owning a Car in Singapore
Singapore is the most expensive country in the world to own a car. Aside from sky high Certificate of Entitlement (COE) premiums, car owners will also have to consider costly monthly instalments, taxes, insurance premiums, petrol prices, and so on. This makes owning a car in the country certainly a luxury. With the recent increase in COE bidding, there is a real need to save up or cut down on costs. In this article, we explore these methods to save you a few dollars when buying a car.
1. Go smaller.
Cars with an engine capacity of 1,600cc or lower fall under Category A of the Land Transport Authority (LTA). As of this writing, the COE price for Category A is SGD 53,694 compared to Category B (cars with an engine capacity above 1,600cc) that had a COE price of SGD 56,000. You will get to save roughly SGD 3,000 if you opt for cars in this category. This switch will also save you more money in the long run. Road taxes and petrol expenses will all be much cheaper if you do opt for a much smaller car.
2. Go for cars with lower carbon emissions.
Singapore has a Carbon Emissions-Based Vehicle Scheme or CEVS. This scheme was set up to encourage fuel efficiency and lower carbon emission vehicles. Cars that emit low carbon emissions can qualify to receive rebates that are offset against the car’s ARF (Additional Registration Fee). If you have a vehicle with carbon emissions of 135 CO2 g/km and below, you can expect a rebate of SGD 5,000-30,000.
3. Choose car insurance based on your needs.
Cheaper premiums are not always the way to go. This can end up making you shell out more money in the future because of poor coverage. Instead of choosing cheaper premiums, choose one that is based on your needs and preferences. Are you the only one going to drive the car? Do you plan to drive it regularly? These are just some of factors can save you a lot of money in the future.
4. Opt for car loans with lower interest rates.
With the easing of car loan guidelines by the Monetary Authority of Singapore (MAS), owning a car will be much more accessible to the public. However, it doesn’t necessarily mean it will be more affordable. Longer loan terms often mean higher interest rates. This will certainly make it more expensive in the long run. This is why you should always compare bank interest rates to see what bank offers the best rates with the loan term that you prefer. You can also lower your monthly instalments if you put down a higher down payment.
5. Go for used vehicles.
If you are in a rush to buy a car on the cheap, then a used car might be for you. Car depreciation is a huge factor as to why that is. On average, cars depreciate about 30% in first three years. This means potential car buyers can expect to save up to 30% on a used car. This is a huge percentage that could save you a lot of dollars.
Owning a car in Singapore definitely has its perks. Not only will you have the freedom to drive wherever you choose but it’s also super convenient if you have a family.
Do you have any other cost-effective tips to share? Feel free to share it with us in the comments section below.
5 Minutes for Instant Rewards
Discover our affordable and convenient insurance premiums in just five minutes. Choose the plan you want. Pay the way you want. You are insured!
*Compared to leading car insurers. 16% of DirectAsia customers would save $300 or more compared to the estimated average premium across leading insurers. Cheapest based on average price of more than 12,000 cases, compared to leading car insurers.