The real cost of owning a car in Singapore is far bigger than the price a salesperson quotes you. You are paying for a Certificate of Entitlement, taxes stacked on the car's value, and a decade of running costs that keep pulling money out of your account every month. Plan for the whole stack before you sign, not the deposit alone.
For a young adult in Singapore, a car is usually the second most expensive thing you will ever buy after a home. Get the sum wrong and you spend your twenties funding a metal box that loses value while you sleep. Get it right and you either drive with a clear conscience or decide, with real numbers, that public transport wins. This guide breaks the cost into the pieces LTA actually charges, and points you to the live figures so you are never guessing.
The full cost stack, upfront and ongoing
Split the cost into two buckets. Upfront costs are what you pay to put the car on the road: the COE, the car's Open Market Value, the Additional Registration Fee, and the registration fee itself. Ongoing costs are what you pay every year to keep it there: road tax, insurance, petrol, parking, ERP, servicing, and inspection. On top of both sits depreciation, which is the money the car quietly loses each year whether you drive it or not.
Here is the whole stack in one place, with where to check the current number. Prices move, so treat any figure you see online as a starting point and confirm the live one on the official LTA pages.
| Cost component | Upfront or ongoing | Where to check the live figure |
|---|---|---|
| Certificate of Entitlement (COE) | Upfront | LTA COE page |
| Open Market Value (OMV) | Upfront (tax base) | LTA OMV page |
| Additional Registration Fee (ARF) | Upfront (tiered % of OMV) | LTA ARF page |
| Registration fee | Upfront (fixed) | LTA upfront vehicle costs |
| Road tax | Ongoing (yearly) | LTA road tax page |
| Insurance | Ongoing (yearly) | LTA insurance page |
| Petrol | Ongoing (monthly) | LTA fuel page |
| Parking and ERP | Ongoing (monthly) | LTA parking page |
| Servicing and inspection | Ongoing | LTA ongoing car costs |
| Depreciation | Ongoing (hidden) | Your purchase price minus resale value |
The upfront costs that dwarf the car itself
The strange thing about buying a car here is that the car is often the cheapest part. The taxes and the COE usually cost more than the vehicle. Break them down so no line item surprises you.
Certificate of entitlement
Before you can register a car, you buy the right to own one for ten years. That right is the COE, won through an open bidding exercise LTA runs twice a month. Supply is capped, so the price floats with demand and has swung widely over the years. For a mainstream car it has sat deep in five figures for a long stretch, and it is the single line most likely to blow your budget. Do not trust an old number. Read how the system works and check the latest result on the LTA COE page (as of June 2026) before you plan anything.
OMV, ARF and the registration fee
The Open Market Value is what the car actually cost to import, assessed by Singapore Customs. It is small compared with what sits on top of it. The Additional Registration Fee is a tax charged as a tiered percentage of that OMV, so the more the car is worth, the steeper the percentage climbs. There is also a fixed registration fee to put the car on the road, which was $350 (LTA, as of June 2026). Add GST and dealer margin, and you can see why the taxes and COE together often double the price of the vehicle you are actually driving. The official breakdowns live on the LTA OMV page and ARF page.
The ongoing costs people forget to add
Once the car is yours, the meter never stops. These are the yearly and monthly costs that decide whether ownership is comfortable or a slow squeeze on your salary.
- Road tax is billed every six or twelve months and scales with your engine size or, for electric cars, power output. Bigger engine, bigger bill. Check the current bands on the LTA road tax page.
- Insurance is compulsory and costs more when you are young and newly licensed. A driver in their early twenties can pay noticeably higher premiums than someone with years of no-claim discount. LTA explains the cover you must carry on its insurance page.
- Petrol depends on how far you drive and how thirsty the car is. A daily commute across the island adds up fast at pump prices. LTA covers fuel types and efficiency on its fuel page.
- Parking and ERP are the costs you pay just to stop or to move at peak hours. Season parking at home, hourly parking at work, and ERP gantries on your route can quietly cost more per month than your phone bill. See the LTA parking page.
- Servicing and inspection cover routine maintenance, tyres, and the mandatory inspection older cars must pass. Skip servicing and you pay more later in repairs.
None of these is huge on its own. Added together across twelve months, they often rival a modest monthly loan repayment, which is exactly why people underestimate them.
Depreciation is the cost you never see billed
Here is the number that catches almost everyone. Depreciation is the value your car loses every year, and because it is a ten-year COE car, most of what you paid disappears by the time the COE expires. Say you spend a large sum today. If the car and its remaining COE are worth far less when you sell, that gap divided across the years you owned it is your true yearly cost of driving. For many owners, depreciation alone is larger than petrol, road tax, and insurance combined.
To estimate it, take the all-in price you pay, subtract a realistic resale or scrap value at the point you plan to sell, and divide by the number of years you will keep it. Add the yearly running costs on top and you get your honest cost per year. That single figure is what you should compare against a year of Grab rides, taxis, and public transport before deciding a car is worth it.
How to plan the number before you buy
Planning the real cost is a five-minute exercise once you have the pieces. Work through it in order.
- Pull the current COE result for your car category from the LTA COE page so your upfront figure is real, not a guess.
- Add the car's OMV, ARF, GST, registration fee, and dealer costs for your total upfront price.
- List every yearly running cost: road tax, insurance, petrol, parking, ERP, servicing. Total them for one year.
- Estimate depreciation using your all-in price minus expected resale value, divided by years owned.
- Add yearly running costs and yearly depreciation. That sum is your true annual cost of ownership.
Then run the honest test. Divide that annual cost by twelve and ask whether that monthly number fits your budget without crowding out savings and investing. A useful rule of thumb many advisers use is to keep total transport spending well within a sensible slice of your take-home pay. National spending patterns on transport are tracked in the Household Expenditure Survey published by the Department of Statistics on SingStat, and the broader vehicle policy sits with the Land Transport Authority.
If the monthly figure means you cannot build an emergency fund or start investing, the car is borrowing from your future self. That is the trap behind so many early-career money regrets. Before you commit, read how to avoid lifestyle inflation after your first job and how to save money in your 20s in Singapore, because a car is the fastest way to erase both.
Frequently asked questions
How much does it really cost to own a car in Singapore per month?
Your true monthly cost is yearly depreciation plus yearly running costs, divided by twelve. Depreciation is usually the biggest slice, followed by petrol, parking, insurance, and road tax. Because the COE and taxes are so large here, the honest monthly figure is often far higher than the loan repayment alone, so always add depreciation before you decide.
Is COE part of the cost of owning a car?
Yes, and it is often the single largest line. The COE is the ten-year right to own a car, won through LTA's bidding system, and its price floats with demand. It is baked into your purchase price and lost over the ten years as the car depreciates. Check the current result on the LTA COE page rather than relying on an old figure.
Should a fresh graduate in Singapore buy a car?
Usually not in the first few years, unless your job genuinely needs one. The money that goes into COE, taxes, and depreciation is money that cannot build your emergency fund or start compounding through investing. Run the annual-cost calculation, compare it against a year of public transport and ride-hailing, and only buy if the gap is worth it to you.
A car decision is really a money-planning decision, and it is one of the first big ones you will face. If you want a structured way to learn budgeting, saving, and financial judgement from mentors who have guided over 1,000 young Singaporeans, apply to the free FINternship apprenticeship or start with the free masterclass. Getting this call right early is worth more than any car.