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The Big Read in Short: What drives Singaporeans' car-owning dreams amid soaring COE prices?

SINGAPORE — Not long after getting his driving licence, car enthusiast Mohammad Izzraimy Mohammad Isham made an “impulsive” purchase — a second-hand Honda Civic costing around S$28,800.

Meanwhile, 35-year-old Romulus told TODAY that while he personally prefers to be driven around as a passenger in a private-hire vehicle (PHV), he decided to buy a three-year-old Mazda 6 sedan recently.

“I ‘die die’ also must buy a car, because I’m going to be a father soon,” said Romulus, using the Singlish describing the lack of alternative choices.

The logistics professional, who declined to give his full name, said he saw the purchase as necessary to bring his wife and future child around in a more comfortable and convenient manner. 

“In public transport, people hardly gave up their seats to my wife,” he said, adding that car-sharing services — which he had used before her pregnancy — fell short in terms of reliability.

“If not for the baby, I think I really have no reason to own a car because taking a PHV is a lot cheaper and I can take the journey-time to sleep.”

Mr Romulus and Mr Izzraimy are among those in Singapore who, for various reasons, decide to own cars despite the increasingly prohibitive costs of having one. 

Premiums for Certificate of Entitlement (COE), which form a big chunk of a car’s final price tag, have been hitting new highs this year at various bidding exercises. Besides pushing up car-owning costs, the upward trend also indicates an increasing demand for the vehicles.

All this is happening while Singapore is making inroads in improving its overall transportation system, and other commuting choices become more readily available.


Currently seven in 10 households are within a 10-minute walk to a train (MRT or LRT) station, with the proportion to increase to eight in 10 by the next decade, said Transport Minister S Iswaran in Parliament in May. 

While the private car population had declined slightly — from about 535,200 in 2012 to 532,300 in 2022 — the number of private-hire cars grew significantly over the same period: From under 15,000 to about 72,600.

This has prompted calls to carve out a separate COE category for such cars or to put a cap on its population, to which the Government has said it would continue to monitor the impact of such cars on the premiums.

Based on the latest figures in August compiled by Onemotoring, here are the recent price tags of some cars, before and after COE:

Some Singaporeans who took the car-plunge recently told TODAY that they had bought second-hand vehicles, as it made “more sense” than buying brand new cars, given the prevailing premium prices.

Mr Nur Syahiran Masli, 33, bought a 13-year-old Mitsubishi Lancer in October last year for slightly under S$90,000.

The prevailing premium for a new car in that category that month was already over S$80,000.

The car owners who spoke to TODAY generally spent up to 30 per cent of their monthly income on car-related expenses, which would typically include monthly instalments for car loans, electronic road pricing and parking charges, petrol as well as other outlays for insurance, road tax as well as maintenance and repairs. 

Rising interest rates — which would bump up refinancing costs — as well as climbing pump prices (from about S$2.50 per litre in October 2021 to around S$2.90 earlier this month) makes the price of owning a car all the more prohibitive.


People usually own cars for two broad reasons: For a faster and more convenient means of transportation; or they enjoy driving or believe certain cars “provide a certain social status”, noted transport economist Walter Theseira.

“In reality, many Singaporeans buy cars for both reasons in some mixture,” said the associate professor from the Singapore University of Social Sciences (SUSS). 

As COE premiums soar, the market is reacting in various ways to allow people to own — or at least effectively own — their cars in ways that are more manageable.

Some dealers would advise their clients who already have a car, to trade in their cars every two years or so.

Others throw in perks such as longer warranty or offer zero-per cent down payment options, though this would typically entail higher monthly repayments.

It is also not clear how the dealers get round a Monetary Authority of Singapore rule that requires downpayment of 30 to 40 per cent depending on the car value and a maximum loan tenure of seven years.

Besides turning to the second-hand market, some, like Mr Izzraimy, spend a few extra hours after work to monetise their car as carpool or PHV drivers.

Another way for Singaporeans to enjoy the benefits of having their own car without a heavy upfront outlay is via car leasing.

Mr Desmond Chan of Sgcarmart said that the platform does not have specific figures to indicate demand for car leasing.

“However, based on LTA (Land Transport Authority) data, the population for ‘company cars’, which car leasing falls under, has grown a fair bit in recent years. So certainly, at least from a supply side, car leasing is on the uptick,” he added.

LTA data showed that the number of such cars had grown incrementally from 21,403 in 2012 to  24,610 in 2019. It then surged by about 26 per cent in a year to 30,966 cars by 2020, before growing even further to 35,109 in 2022.

However, industry players explained that the rental price is typically higher than the monthly instalment for buying a similar car, as the rental would also cover costs such as insurance and maintenance. 


As the Government continues its push for a car-lite society in land-scarce Singapore, it is inevitable that many would not be able to fulfil their dreams of owning a car, some experts noted.

Dr Tan Ern Ser, an associate professor of sociology from the National University of Singapore, said that such unfulfilled aspirations might be a cause for concern.

“But Singaporeans are also pragmatic people who could make the adjustments, especially if our public transport system has last-km convenience,” he said, referring to the distance between one’s residence and public transport.

Chief operating officer of CarTimes Group, Mr Benjamin Loo, said that at the end of the day, cars are not strictly necessities for most people.

“Whoever can afford the luxury to pay for convenience and time saved, they will continue buying cars,” he said.

Assoc Prof Theseira of SUSS said that there are still tweaks that can be made to usher the society towards a more car-lite direction — including continuously improving the user experience of other modes of transportation, and even tweaking the way we lead our lives to involve less commuting.

“But ultimately, you cannot tell people that it’s better to go car-lite; they have to find that it is genuinely so, because they get the travel they need done more cheaply and conveniently without a car,” he said.

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