Your Complete Guide to Buying Your First Car in Singapore + Car Loan Calculator
Let’s be honest — buying a car in Singapore is not like buying a car anywhere else in the world. Between COE, ARF, road tax, insurance, and petrol, the actual cost of ownership can catch first-time buyers completely off guard. This guide is designed to cut through the confusion so you go in with both eyes open.
Understanding the True Cost of Car Ownership (2026 Edition)
The sticker price is just the beginning. Here’s what actually makes up what you’ll pay.
Purchase price A new car in Singapore is expensive because it carries several layers of tax on top of the base vehicle cost. You’re paying for the Open Market Value (OMV) of the car, then adding Excise Duty (20% of OMV), Additional Registration Fee (ARF), GST (9%), and of course, the COE itself. As of the second COE bidding exercise in March 2026, Cat A (cars up to 1,600cc and 97kW) closed at $111,890, while Cat B (larger or more powerful cars, including higher-output EVs) closed at $115,568. That’s excluding the car itself.
Insurance First-time drivers typically pay $1,500–$4,000/year. If you’re going electric, budget on the higher end — EV insurance premiums remain elevated due to specialised repair and parts costs.
Road tax For petrol cars, road tax is calculated based on engine capacity. A 1.6L car pays around $740/year as a rough guide. Electric vehicles are assessed differently — their road tax is based on power output (kW) plus an additional flat component.
Petrol This one has been stinging lately. 95-octane petrol was going for $3.46–$3.47/L before discounts as of late March 2026 — a record high for 2026. With card discounts or loyalty programmes, you’ll typically pay less, but budgeting $350–$550/month for normal commuting is a sensible starting point for now. Prices are volatile, so check regularly.
Maintenance Budget $600–$2,500/year depending on the car. Japanese makes like Honda and Toyota remain the most affordable to service in Singapore as parts are readily available and workshop rates are competitive.
Parking HDB season parking runs $80/month for a surface carpark or $110/month for a sheltered or multi-storey carpark — that’s for your first car as a resident. Non-residents or second car owners pay more.
Depreciation This is the biggest cost most buyers underestimate. With high COE premiums and the changes introduced in Budget 2026 (more on that below), most new cars now depreciate by $14,000–$22,000/year depending on the model. It’s a number worth sitting with before you sign anything.
New vs. Used: Which Is Better for First-Time Buyers?
In 2026, used cars are often the only viable entry point. However, be aware that the Budget 2026 PARF rebate reduction means cars deregistered after 9 years now only return 5% of the ARF (from the original 50%). This makes the “paper value” of used cars lower than in previous years.
How to Choose the Right Car
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Calculate LTV Limits: If the car’s OMV is >$20,000, you can only borrow up to 60%. You must have 40% in cash for the downpayment. For cars at or below $20,000 OMV, you can borrow up to 70%.
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Check PARF vs. COE Research: A car with high OMV used to be a “safe” bet for scrap value, but with the 2026 rebate caps ($30,000 max), luxury cars now lose value faster.
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Get a Pre-Purchase Inspection (PPI): Always request for PPI to check for hidden defects, this is a non-negotiable.
Car Loan Tips for 2026
Loans are strictly governed by the Total Debt Servicing Ratio (TDSR). Your total monthly debt (house + car + credit cards) cannot exceed 55% of your gross income. This applies to everyone, not just first-timers.
| Car OMV | Max Loan (LTV) | Min. Cash Downpayment |
| $20,000 or less | 70% | 30% |
| Above $20,000 | 60% | 40% |
Beyond TDSR, pay close attention to your loan tenure. A longer tenure feels more affordable month-to-month but means you pay significantly more in interest over the life of the loan. Run the numbers both ways before deciding.
Ready to Buy Your First Car?
At Vision Motoring SG, we stay ahead of the latest LTA and MAS regulations so you don’t have to. Whether you’re figuring out the right loan tenure, or just want someone to walk you through the process without the sales pressure, our team is here. PPI and STA inspections are always welcome. We’d rather you buy with confidence than buy in a hurry. Visit our showroom or WhatsApp us today.
Your satisfaction, our vision.
Use our car loan calculator to see what monthly repayments would look like for the cars you’re considering.
