The True Cost of Owning a Car
A car's true cost in Singapore is dominated by depreciation — the upfront price spread over the COE's 10 years — plus running costs like road tax, insurance and fuel. In an illustrative Cat A example (OMV S$25,000), ARF, excise, GST, the S$350 fee and a S$132,004 COE push the on-road price near S$192,000 — about S$19,000 a year in depreciation alone.
People focus on petrol prices, but in Singapore the real cost of a car is set long before you reach the pump. It is depreciation — the money you will never get back — plus the running costs. Here is a worked, illustrative example to show how the numbers stack up. The tax rates are from LTA; the OMV, dealer margin and running-cost figures are illustrative and will differ by car.
Step 1: how the on-road price is built
Take a Category A car with an illustrative OMV of S$25,000. The regulated build-up (see OMV, ARF and PARF explained):
The COE is the largest single component. Illustrative OMV; tax rates and COE from LTA.
| Component | How it’s worked out | Amount |
|---|---|---|
| OMV | Assessed by Customs (illustrative) | S$25,000 |
| ARF | 100% of first S$20k + 140% of next S$5k | S$27,000 |
| Excise duty | 20% of OMV | S$5,000 |
| GST | 9% of (OMV + excise) | S$2,700 |
| Registration Fee | Flat | S$350 |
| COE (Cat A) | 21 Oct 2026 premium | S$132,004 |
| Regulated subtotal | S$192,054 |
A dealer’s margin sits on top of this. The single biggest line is the COE, not the car itself — which is what makes Singapore car ownership unusual.
Step 2: annual running costs
| Running cost | Illustrative annual figure |
|---|---|
| Road tax (1,600cc petrol) | ~S$743 (verified formula) |
| Insurance | ~S$1,200–2,500 (varies) |
| Fuel | depends on mileage and pump prices |
| Parking (season + ERP) | varies by location and use |
| Maintenance & servicing | rises as the car ages |
Only the road tax here is a fixed, official figure: for a 1,600cc petrol car it works out to about S$743 a year using LTA’s formula. The rest depend on how and where you drive.
Step 3: depreciation — the number that matters
This is the cost most buyers underestimate. At the end of a 10-year COE, the PARF rebate is nil (it only applies if you deregister within 10 years), and the COE itself is fully used up. So over a full 10-year hold, essentially the entire purchase price depreciates.
On the S$192,054 regulated price, that is roughly S$19,200 a year in depreciation alone — before a single dollar of fuel, insurance or parking. Add running costs and the real monthly cost of the car becomes clear.
If you sell or scrap earlier
Depreciation per year is usually lower if you sell before 10 years, because you recover value: a rebate for the unused COE and, if within 10 years, a PARF rebate (part of the ARF paid). That is why many owners track depreciation per year rather than the sticker price when comparing cars — see COE renewal and PQP explained for the end-of-life choices.
Related
- OMV, ARF and PARF rebate explained
- Car insurance in Singapore: what to know
- Petrol vs electric car: real cost
This worked example is illustrative; OMV, dealer margin and running costs vary by car and over time. Tax rates and the COE premium are from LTA as of the dates stated. Not financial advice.
Sources
- Vehicle Tax Structure (ARF, excise, road tax, PARF) — Land Transport Authority (OneMotoring) (as of October 2026)
- Road Tax (rates and surcharges) — Land Transport Authority (OneMotoring) (as of October 2026)
- COE Open Bidding results (latest premiums) — Land Transport Authority (OneMotoring) (as of 21 October 2026)