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The cost of owning a car in Singapore: a two-year update

At the start of my two-year ownership experiment, I bought a new Hyundai Tucson 1.6 petrol for S$178,900 on the road. That included the five-year Certificate of Entitlement (COE), registration and tax. I paid S$39,800 up front and borrowed S$139,100 over seven years at 4.9%, with a monthly instalment close to S$1,960.

The first year looked manageable because fuel and road tax stayed predictable. The second year did not produce a dramatic saving: my all-in economic cost fell by only S$1,730, even though depreciation and finance interest eased. A set of tyres and heavier servicing absorbed most of those gains, while parking and road tax barely moved.

Singapore makes the price of car ownership unusually visible. A buyer sees the COE, Electronic Road Pricing (ERP) charges, tightly managed kerbside spaces and a reliable alternative on the mass rapid transit (MRT) network. Australian drivers also understand the monthly burden, but their tolls, rego, insurance excess and parking rules are organised differently. The shared left-hand traffic makes the road itself feel familiar.

This is my receipt-based update, not a quote or professional financial advice. Amounts reflect my car, routes, insurer, HDB parking bay and about 15,500 kilometres a year. COE prices, premiums, fuel and service costs move, so another owner could see a very different result.

What two years of ownership showed

I recorded every payment in a consistent format, then separated operating expenses, loan interest and estimated loss in vehicle value. That keeps cash flow distinct from the cost of actually owning the asset. My receipt ledger breaks down as follows:

Cost category First 12 months (S$) Second 12 months (S$)
Fuel 3,890 3,720
Road tax 1,060 1,060
ERP charges 610 560
Parking 4,320 4,320
Insurance 1,320 1,370
Servicing and tyres 920 1,840
Cleaning, washes and other running costs 430 360
Finance interest 6,620 5,910
Operating cost plus interest 19,170 19,140
Estimated vehicle value loss 18,500 16,800
Economic cost of ownership 37,670 35,940

The operating-and-interest line was almost unchanged at S$19,170 and S$19,140. In year two, fuel fell S$170, ERP charges fell S$50 and loan interest fell S$710. Insurance rose S$50, while servicing and tyres jumped S$920 as I replaced four tyres and completed a major service.

I exclude loan principal and the S$39,800 deposit from the annual cost because both leave me with equity in the car; estimated depreciation captures the economic decline instead. I refreshed dealer quotes and checked private-sale estimates to guide that calculation. On this basis, ownership cost S$37,670 in year one and S$35,940 in year two. The saving was real, but modest.

Buying price, finance and the cost behind the badge

The S$178,900 headline was only the first layer. My five-year COE accounted for more than half of the on-road price, while the vehicle’s value fell once it left the showroom. Before signing, I used the same evidence-first approach as in my recently listed SGX company review: separate what I was paying from what the asset might earn or lose. For the Tucson, that meant dealer quotes, COE terms and realistic resale values.

At 4.9%, the seven-year loan carried about S$25,500 in interest over its life. Monthly principal and interest stayed close to S$1,960, but the balance fell and the interest component declined. A lower monthly payment would have looked better in a household budget, yet it could have stretched the term and increased total interest.

The more useful comparison was cash versus financing. Keeping the down payment in cash meant forgoing interest on savings, while borrowing left that cash available for emergencies and other near-term needs. I also avoided treating CPF balances as ordinary spending money. I budgeted the full loan payment separately so a lower fuel bill would not be mistaken for extra disposable income.

Running costs behind the dashboard

Fuel was my largest variable running cost at S$3,890, then S$3,720. I covered about 15,500km each year and averaged roughly 8.2L per 100km, while my receipts worked out near S$2.06 per litre. ERP charges of S$610 and S$560 were smaller, partly because my regular routes crossed chargeable roads only occasionally. ERP still deserves attention because the charge depends on time, location and vehicle class.

Parking was the largest predictable bill: S$4,320 in each year, or S$360 monthly for my HDB bay. The annual road tax was S$1,060, and insurance moved from S$1,320 to S$1,370. Servicing and tyres were the biggest timing trap, rising from S$920 to S$1,840 when replacement tyres joined routine work.

The car consumed less than I expected on ordinary trips but still carried fixed costs whenever it moved or stood still. Public transport worked well for planned journeys, yet work, errands and occasional passenger pickups made a private vehicle convenient. The lesson from the ledger is blunt: lower mileage saved fuel, but it did not remove parking, tax or insurance.

Why an Australian comparison needs context

An Australian buyer receives a different cost stack. There is no tradable COE bolted to the purchase price, and a comparable vehicle in Sydney or Melbourne is normally quoted with GST included, while registration and dealer charges are shown separately. Aussies call fuel “petrol” and annual registration “rego”; those familiar words can distract from the fact that rego varies by state, engine size, weight and location.

Tolls show why a straight Singapore–Australia comparison fails. Sydney’s M4 and M7 and Melbourne’s CityLink and EastLink use cashless plate-based charging, while some rental agreements add administration fees. Singapore’s ERP feels different, but both systems make route choice part of the running cost. An Australian owner who rarely crosses a toll road may pay nothing there and still face heavy urban parking costs.

Parking depends just as much on location. A suburban driveway can make parking nearly free in either country, while a Sydney or Melbourne apartment without allocated parking may charge weekly visitor rates. Servicing is another market difference: dealership work can carry higher labour rates, while independent mechanics and local workshops often provide competitive quotes for routine work. Australians commonly book a “service” and say they will “get a quote” before authorising major jobs, which is useful when ERP or COE costs are also uncertain.

Rules I am carrying into year three

The two-year view changed how I evaluate any vehicle. I now focus on the complete cash and economic cost instead of the badge, monthly instalment or distance advertised in a review.

The list is not about buying the cheapest badge. It is about avoiding a cheap purchase that becomes expensive later. Before any renewal or replacement decision, I revisited my CPF special account balances and kept special-account savings separate from cash that could meet a vehicle deposit. I would rather repeat the exercise now than judge the Tucson by its purchase date.

Keep the running-cost ledger visible

Looking back, the car was never the largest part of the first-year bill. The down payment, interest, parking and value loss were all significant, while fuel attracted most attention because its price moved visibly at the pump.

The next update will add the third year, track COE renewal quotes ahead of the five-year mark and include major servicing due that year. I will keep using S$ for raw receipts, separate AUD examples for Australian readers and report both operating costs and the economic total.

Follow The Financial MTC for the next ownership update, and share your own annual car-cost breakdown through the comments.