Buying a car in Singapore is a significant financial decision, but the price tag of a new car for sale is just the beginning. For prospective buyers, understanding the hidden costs of car ownership is essential for financial preparedness and avoiding unexpected expenses. In 2025, these costs remain as relevant as ever, affecting everything from your monthly budget to long-term commitments. Here are the critical areas where costs can add up.

Certificate of Entitlement (COE): The Biggest Hurdle

The Certificate of Entitlement (COE) continues to be the largest upfront cost when purchasing a vehicle in Singapore. For buyers looking to buy a new car in Singapore, the bidding system for COEs adds a significant premium. The cost of securing a COE often rivals, or even exceeds the base price of the car itself. With fluctuating COE prices driven by demand and market conditions, buyers must be prepared for this mandatory expense, which determines whether car ownership is financially feasible.

Vehicle Taxes and Registration Fees

Beyond the COE, Singapore’s car buyers face a variety of taxes and fees upon registration. The Additional Registration Fee (ARF), based on the car’s open market value (OMV), can add thousands to the overall cost. The Goods and Services Tax (GST) and road tax add to the ongoing expenses of car ownership. These charges make it essential to account for taxes when evaluating the total cost of cars for sale. Proper budgeting ensures that these mandatory payments do not come as an unwelcome surprise.

Insurance Costs: Protecting Your Investment

Car insurance is non-negotiable and represents another recurring cost of ownership. Premiums vary based on the driver’s profile, the car’s value, and additional coverage options. For those considering buying new cars in Singapore, higher insurance costs may apply to models with advanced technology or luxury features. Comparing insurance providers and understanding the terms of coverage can help drivers make informed decisions and secure the best rates.

Maintenance and Repairs: Keeping the Car Roadworthy

Owning a car in Singapore means committing to regular maintenance and potential repairs. Routine servicing, tyre replacements, and unforeseen repairs can quickly add up. While new cars for sale typically come with warranties, these do not cover wear-and-tear items or accidents. Skipping regular maintenance may lead to costlier problems in the long run, making this an unavoidable expense. Additionally, opting for authorised service centres or specialist garages may further influence maintenance costs.

Fuel and Parking Expenses

Daily running costs such as fuel and parking fees form a substantial part of car ownership in Singapore. With fluctuating fuel prices, even a fuel-efficient vehicle can incur significant expenses over time. Additionally, the city’s limited parking spaces result in high parking fees, particularly in central locations. For those who commute frequently, factoring in these expenses is critical to understanding the full cost of car ownership.

Depreciation: The Silent Cost

Depreciation is an often overlooked aspect of owning a car. The value of a new car begins to decrease the moment it leaves the showroom, with significant depreciation occurring in the first few years. For buyers exploring cars for sale, understanding the depreciation rate is vital when considering long-term ownership or future resale value. Certain car models retain value better than others, so researching this factor can help mitigate potential losses.

Learn More: Your Guide to Buying a Car in Singapore

Electronic Road Pricing (ERP) and Congestion Charges

Navigating Singapore’s roads involves dealing with the Electronic Road Pricing (ERP) system, which imposes charges during peak traffic hours. These expenses can accumulate over time for regular commuters. While ERP charges might seem minor at first, frequent travel through high-demand zones can impact monthly budgets significantly. Understanding ERP rates and planning routes accordingly can help minimise these recurring costs.

Leasing Versus Buying: An Alternative to Ownership

With the increasing costs of car ownership, many Singaporeans are considering leasing as an alternative. Leasing offers flexibility, with lower upfront costs and no COE fees, but it comes with its own set of terms and conditions. For those considering whether to buy a new car in Singapore or explore leasing, evaluating the pros and cons of each option is essential to finding a solution that aligns with financial goals.

Navigating Car Ownership in 2025

Car ownership in Singapore comes with numerous hidden costs, many of which are unavoidable. From taxes to maintenance, understanding these expenses in advance allows buyers to plan effectively and make informed choices. As the market evolves, keeping an eye on cost-saving opportunities, such as fuel-efficient vehicles and favourable COE periods, can reduce the financial burden.

For more information about new car options available in Singapore, contact VINCAR today.

Danny White