Rental vs buying a car 2024
Buying vs Renting a Car vs Cabbing Everywhere in Singapore
Buying a car is a very exciting time in one’s life, especially if it’s your very first car. Oh, all the places you will go! No more waiting for the bus or train, squeezing with folks, holding your breath from BO, or transferring from one mode of transport to another. Just get in, drive, and voila!
The pros of owning a car need no introduction. And once you’ve enjoyed that taste of freedom that comes with zooming around in your own vehicle, it might be very hard to then go without, and you may find yourself a lifelong car owner.
But is it really worth it to own a car in Singapore? Let’s face it, of all the things Singapore is well-known for, crazy expensive car prices are definitely at the top of the list.
“You pay HOW MUCH?! for a piece of paper???” is usually the response you’d get when you try to explain the Singapore COE (Certificate of Entitlement) system to people you meet overseas.
And COE is only one part of the equation; owning a car in Singapore involves a lot of other costs that can really add up, and weigh into your monthly expenses. So what about the alternatives to buying a car in Singapore? Can you make do without one, and still enjoy reasonable flexibility and freedom in getting around where you need to go?
In this article, we dive into the costs you’d be looking at buying a car versus renting a car occasionally, or simply relying on taxi or rideshare options instead, and explore what situations each option may be best for.
So if you’re wondering if you should be upgrading to becoming a car owner, or selling your car to simplify your life, here’s the breakdown you should definitely pay attention to.
How Much Does It Cost to Own a Car in Singapore?
Just the Basics to Own a Car
COE is the one thing you can’t run away from if you’re looking at owning your very own vehicle, and the fluctuation of COE prices gives as much rollercoaster thrills as the stock market does (can you believe it’s $112k for >1600cc?!).
Just to put a lump sum price tag on it, let’s go with a ballpark of $100k to begin with. (Most of the figures we’ll use in this article are going to be a rough estimation, since a lot of it depends on your actual choices and usage.)
For the car itself, let’s put it down as $80k, which is a decent price for a new sedan, or second-hand family SUV.
And that’s just the starting amount: $180k.
According to the Monetary Authority of Singapore, you can get a car loan for 60% of this total amount over 7 years. (This depends on a vehicle’s Open Market Value (OMV), for more details check this MAS page out.)
This means putting down a down payment of $72k, and paying the remaining loan amount plus interest via a rounded up/down monthly instalment of $1,300 over 84 months.
Now, for easy calculations, let’s put car insurance at $1k and road tax at $800 annually, so that works out to about $150 a month, so now we’re at $1,450 monthly expenses to own a car. Let’s add $50 a month for maintenance and servicing costs, and round that total figure to $1,500 monthly.
So $1,500 a month is what we’re looking at just to own the vehicle and make it eligible for use on the roads. You’ll also need to factor in the variable costs of actually using the car, such as parking and petrol.
Variable Costs: How Do You Use Your Car?
This is where the usage costs will differ greatly depending on what you use your car for. Do you use your vehicle daily to commute to and from work? Or do you use it only occasionally on weekends when the family goes out together? Do you use it extensively both on weekdays and weekends?
If you’re driving to and from work, you might also have to consider ERP gantry costs, as well as additional parking costs at your office building or nearby, on top of your season parking costs at your residential location. (For the purpose of this article we are not adding in ERP costs as you’d have to pay this even if you take a taxi.) If you usually head into town with your family on the weekends, then parking is also going to add up.
For someone who drives daily to and from work, in ballpark figures:
Monthly cost: $1k
For someone who uses the car occasionally, such as only on weekends:
Monthly cost: $500
Now you’re looking at a monthly expense of around $2k to $2.5k a month to own and drive your very own vehicle. And clearly, if you were to drive around a lot on all days of the week, this amount would be much higher.
How Much Does It Cost to Rent a Car in Singapore?
Naturally, we now have to consider the alternative options of renting a car on the occasions you need to use one (short-term rental or carsharing), or having one ready to go in your parking lot (long-term leasing).
There are plenty of carsharing options such as GetGo, TribeCar, Car Club, BlueSG, DriveLah and such, but prices vary greatly from $70-$120 per day; and frankly carsharing seems to make more sense if you only need a car for a couple of hours.
An extensive search in the SGCarMart car rental listings shows that daily car rental can go as low as $50, and weekend hire (pickup on Friday and drop off Monday morning) somewhere around $250.
You can lease a car for a longer period from as low as $1.3k per month, though this figure is more likely to be around $1.8k-$2k on average for a decent sedan.
Of course, with renting or leasing a vehicle, you’ll still have to pay the variable costs of owning a car, albeit temporarily, such as parking and petrol ($500-$1k).
At $2-3k a month, it seems comparable to purchasing and owning your own car, but renting a car presents a whole other set of pros and cons.
Pros and Cons of Renting or Leasing a Car
|Having the convenience of your own vehicle whenever you need it for a duration of time, especially if you only need it for a short period
|Having to pick up and return the vehicle at a certain location, which means additional costs to cab to and fro (although some rental companies do deliver to your doorstep)
|While you still have to pay some deposit and leasing fees, these will be rather reasonable (such as around $1k) instead of the 40% down payment needed to purchase a car
|Having to pay additional fees if you want to drive to Malaysia
|Being able to drive a wide range of cars, and even choose from luxury rentals including BMW, Mercedes Benz and Audi
|Not being able to always rehire the same vehicle that you like as it depends on its availability
|Being able to choose short-term rental on a daily, weekly or weekend basis, or a long-term lease for as long as you need a vehicle, and not any longer
|Some rentals require a minimum lease period, so you have to bae able to commit to that period
|Some car rental companies offer immediate car replacement in breakdown situations, and 24/7 roadside assistance
|Insurance excess is usually higher than with your own vehicle
|Some days you may simply need a sedan to get from point A to B, whereas on other days you might need a van or hatchback for transporting large items
|Leasing a car over many years may not make sense, because you'll still end up spending a six-figure amount but not actually owning a vehicle with intrinsic resale value
|Not having to worry about the miscellaneous things involved in owning a car such as road tax renewals, car servicing, or LTA vehicle inspection
|These are usually additional charges involved for things such as booking cancellations, late returns, not returning with a full tank, or adding a secondary driver
|Some rental companies have a lease buyback scheme which allows you to own the vehicle you've been leasing if you wish to do so
|It's not your car. Other people have been in it. You can't call it "my car". Enough said. It matters!
|The option of renting a Private Hire Rental (PHR) vehicle for a little side hustle work if you are eligible to do so with a vocational licence
How Much Does It Cost to Cab Everywhere?
With enough taxis and rideshare vehicles combing the Singapore roads, the convenience of booking something within minutes from your phone, and direct roadside pickup, relying on this transportation option also offers you a great deal of flexibility and freedom without any deposits, commitment, or parking costs whatsoever.
Assuming it costs $20 between home and work x 2 rides per day x 20 days a month = $800
Including fares for weekend hangouts = $100 per weekend x 4 weekends/month = $400
Total cost to cab everywhere per month: Around $1.2k
Of course, this amount is for someone who is pretty much a creature of habit and lives a fairly routine life week on week. If you’re having dinner and drink meetups with friends after work, or clubbing on the weekend, then you’ll also have to factor in city area and midnight surcharges.
Pros and Cons of Cabbing Everywhere
|You only pay for transport when you need it. You can save on cab fare if you don't go out so much, or opting for public transport.
|It's not always possible to get a cab or rideshare when you need it, so this lack of immediacy is a disadvantage compared to having your own vehicle.
|You can arrange daily pick-ups with a cabby or rideshare driver if you have a usual routine, such as to and from work.
|You have to factor in a lot of waiting time to get a ride during peak periods and the steep increase of price.
|You don't have to worry about finding a parking lot, ever!
|Dealing with the dreaded "Where are you?? I'm here!!" text from your driver.
|Not having to stress over road tax renewals, petrol prices, or constantly checking Google Maps to see which stop you have to get off at.
|That dip in self-esteem every time you try to flag a cab and they don't stop for you
|Since you're not the one driving, you can always do something productive in the car, such as reading a book, check your emails, or listen to a podcast
|Your life is in the hands of the driver and you are in no control whatsoever to prevent or avoid an accident.
Which Option Suits Your Lifestyle Best?
Clearly every option here, no matter which you choose, is still going to be expensive. Sadly, that is the price of convenience here in Singapore. The better question to ask is: Is what I’m paying for actually what I need?
To help you answer this question better, we’ve broken it down into some possible situations where either owning, renting, or cabbing may be the best option for you.
People who should own their own car or lease long term:
- Families with young children of various ages who would otherwise have to deal with the hassle of dragging baby buggies, strollers, maxi cosi's and booster seats around. With a car, they don’t need to be dragged up and downstairs, or take up space in the flat — they can just live in the boot.
- Families with elderly parents with mobility issues, especially if you have to drive them often for checkups and treatments. It’s a lot easier with a car if a wheelchair is needed as well.
- If you need to drop your kids off at different schools and ferry them to and from after-school and weekend activities
- If you work in an area with limited public transport and isn’t popular with taxis and rideshare vehicles
- If you work in a job that requires you to move around Singapore the entire day for your appointments and meetings, such as insurance agents, real estate agents, or salespeople. Not having to rely on another driver’s availability means having the control to be on time for your appointments.
- If a member of your family has sensory issues and cannot deal with the crazy crowded public transport in Singapore
People who should lease long term (vs buying a car):
- You can’t afford a huge five-figure down payment to own a car
- You like changing your car every year
- You like to test drive different car options
- You want the option to drive a luxury car without paying a huge deposit
- You’re an expat who isn’t sure how many years you’ll continue driving in Singapore for
- You don’t care about owning a car as an asset with resale value
- You don’t plan to lease a car for longer than 7 years (in which case it may make more sense to purchase a car)
People who should rent short term or carshare:
- You only need a vehicle for a particular purpose with a short duration, such as driving to Malaysia, going on a shopping spree, driving to see the Christmas lights, moving some furniture…
- You take public transport to work, but only need a car on the weekends
- You like to test drive different car options
- You’re able to plan your car use ahead of time and make advance bookings
People who should just cab it:
- You have the flexibility of working from home and only need to go down to the office occasionally
- You’re much of a homebody and only head out to town once or twice a month
- Your kids are older and you no longer have to bother with buggies and strollers — they’re able to walk on their own and you can just plop them into a cab
- You work in an area where season parking costs are insane and the company doesn’t pay for it but they will reimburse taxi costs to and from all meetings
- You tend to just do things spontaneously and don’t really plan ahead
So, Should You Buy a Car in Singapore?
Well, as you can see, the conclusion is Yes and No. It really depends on your budget (if you have enough of it!) and your lifestyle. If you do decide that owning a car is something that works best for your family, don’t forget to get the right type of car insurance to make sure you’re well-protected.
Otherwise, it might be beneficial to consider the alternatives to car ownership: short-term rental, long-term leasing, carsharing, taxis, and rideshare options, each with their own set of benefits.
We’re confident that you will make the best decision that suits your needs, and remember that you can always make a different decision down the road if your circumstances change.