The true cost of car ownership in Singapore

Today, I shall explore the true cost of car ownership in Singapore. Let me use a simple sedan car, the Toyota Corolla Altis Standard 1.6 Auto as a guide. Taken from Toyota's website at https://www.borneomotors.com.sg/asp/ToyotaPriceListPassenger.aspx, the price with guaranteed COE stands at $114,888.

We assume at 20% downpayment, which comes up to $22,978, and a remaining loan of $91,910. Using the car loan calculator found at http://www.stcars.sg/car-loan-calculator, it works out to be $1,706 mortgage payment a month for 5 years loan, coming up to $20,496 per year.

Now we shall calculate the road tax. I use the calculator found here at http://www.sgcarmart.com/services/roadtax_calculator.php, and it gives me an annual road tax of $744.

Car insurance is a range depending on many factors. For simplicity, I will just use a low cost of $2000 per year for 10 years.

Next up is petrol cost. The cost is subjective, and factors including usage will cause it to vary. Doing a simple assumption that the tank has to be topped up once a week, and each top up costs $60, it will come to $240 a month, or $2,880 a year. We add in maintenance fee in here, as it will be roughly related to petrol cost. The more you drive, the more petrol you need, and the more maintenance you require. Add 50% on petrol cost to arrive at annual maintenance cost at $1,440.

Lastly, parking fees. I assume only parking fee for our housing, which is a HDB open-air car-park. According to HDB's website at http://www.hdb.gov.sg/fi10/fi10327p.nsf/w/CarPark1NewSP?OpenDocument, it is $65 a month, a $780 fee yearly.


Category
Yearly fee
Total cost
Downpayment (20%)

$22,978
Loan repayment (5 years)
$20,497
$102,485
Road tax
$744
$7,440
Car insurance
$2,000
$20,000
Petrol
$2,880
$28,800
Maintenance
$1,440
$14,400
Parking fees
$780
$7,800

The total cost comes up to $203,904 over 10 years. Note that these money are simply the cost. Let me illustrate the true cost of it assuming you do not pay these month, and put into an index fund that generates 7% per annum (like the STI ETF).


Category
Fee ($)
Duration
FV factor
FV ($)
Downpayment (20%)
22,978
Start of 1st year
1.9672
45,202
Loan repayment (5 years)
20,497
First 5 years
5.7507x1.4026
165,327
Road tax
744
10 years
13.816
10,279
Car insurance
2,000
10 years
13.816
27,632
Petrol
2,880
10 years
13.816
39,790
Maintenance
1,440
10 years
13.816
19,895
Parking fees
780
10 years
13.816
10,776

PV factors are taken from the PV table from http://www.retailinvestor.org/pdf/futurevaluetables.pdf.

Adding the FV up gives me a total of $318,901. Assuming a 2% dividend rate on a basket of shares worth $318,901, it gives us an additional $531 each month in 10 years time. And that's only 10 years. Now, that's the true cost of car ownership in Singapore.

Note: $531 in 10 years is equivalent to $415 now assuming an inflation rate of 2.5%, which has been the average inflation rate for the past 10 years.
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