What Is The Cost Of Buying A Car In Singapore Compared To Malaysia?
The cost of owning a car goes for as long as you own the vehicle. The upfront payment of a car is just the beginning of your expenses.
Apart from that, you have to factor in loan financing, road tax, motor insurance, fuel consumption, maintenance costs, and depreciation as some of the hidden costs such as repairing a car.
Price of car ownership in Singapore
Last year, the total number of vehicle ownership in Singapore dropped for the fourth consecutive year. According to the Land Transport Authority, the private car population fell by 1% to 546,706 – the lowest in eight years. Observers attribute the fall to a clawback of Certificates of Entitlement (COEs) in the early 2010 to correct an earlier oversupply.
The Singaporean government aims to be a zero-car ownership city by 2065, due to scarcity of land and having watched its neighbouring cities choked themselves with traffic jams and slowed their economies.
The government took pre-emptive moves to introduce COE to regulate the supply of cars, and the Electronic Road Pricing (ERP) to regulate the use of cars.
The barriers to vehicle ownership is therefore quite high. In addition to the COE, which can at times be pricier than the cost of the vehicle itself, the cost of a car will also include the following:
- Excise Duty – 20% of the Open Market Value of the car
- Goods & Services Tax – a 7% tax is imposed on both the Open Market Value (OMV) of the car and the excise duty
- Additional Registration Fee – up to 180% of the OMV of the car
- Vehicular Emissions Scheme – provides a rebate or surcharge depending on vehicle’s carbon emission
In addition, the maximum car loan you can get is only 60% or 70%, depending on the vehicle’s open market value. This means that you’ll have to fork out a minimum down payment of 30% or 40%.
Malaysia’s pro-vehicle ownership policies
In Malaysia, the volume of sales for new passenger cars alone totalled at 514,697 in 2017.
Malaysian government policies are not designed to curb, but actually encourage driving the car on a daily basis. In Malaysia, it is all about producing more Proton and Perodua cars. And to protect them, taxes on foreign cars have been increased. The government builds more highways with tolls, while financial institutions provide easy loans to purchase cars.
The Malaysian prime minister is still calling for a third national car project to be spearheaded by the private sector. Meanwhile, the government has also brought back fuel subsidies, allocating 3 billion ringgit (S$991 million) to subsidise pump prices till the end of 2018.
In Malaysia, you can get a car loan of up to 90%. This means that you’ll only have to fork out a minimum down payment of 10%.
How much does a car cost in Singapore compared to Malaysia?
For illustration, we’ve compared the cost of buying and owning a Honda City in both Singapore and Malaysia:
|Down payment||30% (S$23,100)||10% (RM8,420.50)|
|Auto insurance ii||S$1,987 (first year)||RM2,468.83 (first year)|
|TOTAL UPFRONT COST||S$25,087||RM10,889.33|
|Loan period||5 years||5 years|
|Total interest cost||S$7,492||RM13,262.29|
|Road tax||S$684 per year, S$3,420 for 5 years||RM90 per year, RM450 for 5 years|
|Auto insurance||Around S$7,268iii||Around RM6,461iv|
|Petrol (fuel economy: 16.9km/L)||Total monthly mileage: 2,000km|
S$16,615 over 5 yearsv
|Total monthly mileage: 2,000km
RM18,817 over 5 yearsvi
|Maintenance cost||About S$3,575vii||About RM3780.59viii|
|TOTAL COST OF OWNERSHIP||S$115,369||RM126,976|
ii. Varies according to insurance provider, and other factors such as your age and gender
iii. Assuming you are entitled to a No Claim Bonus (NCB) of 10% in the second year, 20% in the third year, 38.33% in the fourth year and 45% in the fifth year
iv. Assuming you are entitled to a No Claim Bonus (NCB) of 25% in the second year, 30% in the third year, 30% in the fourth year and 40% in the fifth year
v. Based on 95-Octane petrol price as of September 2018 at S$2.34 per litre
vi. Based on RON95 petrol price as of September 2018 at RM2.65 per litre
Toll and parking costs are independent of choice of car, and vary depending on location and length of time in any given place. As such, these factors have been excluded from the calculations.
While the upfront cost to buy a vehicle is much higher in Singapore, the total cost of ownership is cheaper than in Malaysia – although not by much. On the other hand, it is much easier to purchase a car in Malaysia compared to Singapore, due to the low upfront cost.
However, the median household income in Singapore is S$9,023 (as of 2017), while that of Malaysia is RM5,228 (as of 2016). The purchasing power in Malaysia is much lower compared to that of Singapore. Ultimately, this means that the average household in Malaysia will probably spend a larger chunk of its earnings on a car, compared to the average household in Singapore.
This article was originally published on November 8, 2017.
June is an ex-journo specialises in covering local, general, community and political news. She is passionate about social welfare.