Singapore is one of the most popular countries for expats – it pays well, is clean and comfortable, and is a great place to be based at if you have plans to travel around and explore Asia. If you’re a foreigner who is considering or has decided to relocate to our little red dot, one of your key concerns would be getting around the city.
The good news is that compared to many other countries, Singapore is small. We also have a very efficient public transport network of buses, trains and taxis, which makes it reasonably easy to travel within the city. However, if you’re used to having your own car like you did back home, you may want to know if it’s possible to continue driving here.
This article will cover everything you need to know about driving and buying a car as a foreigner in Singapore.
- Can foreigners buy cars in Singapore?
- How to buy a car in Singapore?
- Understanding COE, or Certificate of Entitlement
- Costs related to owning a car in Singapore
- Applying for a car loan as a foreigner
- Converting a foreign driving licence
- Car insurance in Singapore
Can foreigners buy cars in Singapore?
Yes, foreigners can buy cars in Singapore. Just remember that different makes and models are offered in different markets, so you may want to do some research to familiarise yourself with the cars available here to avoid making a hasty purchase. Singapore cars drive on the left side of the road, which means the cars here are right-hand drive.
How to buy a car in Singapore?
The process of buying a car is pretty much the same in most countries. In Singapore, you can shop for cars either at online car marketplaces, or in-person at the dealers’ showrooms.
However, unlike elsewhere where you can drive your vehicle for as long as you want, in Singapore, you can only drive it while your Certificate of Entitlement (COE) is valid.
Understanding COE, or Certificate of Entitlement
The COE is basically a quota licence that you must bid for. It is part of the Vehicle Quota Scheme (VQS) to manage the number of vehicles on the road.
If you buy a brand new car, it will come with a new COE that’s good for 10 years. If you buy a secondhand car, it will come with an existing COE and you can continue driving it for the remaining years left. For example, a two-year-old car would have eight years left on the road. Once the COE is up, you can either 1) scrap the car and take the Preferential Additional Registration Fee (PARF) rebate, or 2) renew the COE for another five or 10 years.
Although you can bid for the COE on your own, most people leave it to the dealer to save themselves the fuss. The agreed price of a brand new car will include the COE so don’t worry about needing to pay extra.
Costs related to owning a car in Singapore
Now, onto the most important consideration: how much would you need to pay? Here’s an overview of the costs involved:
|Cost in owning a car||Estimated cost||Description and/or things to note|
|Buying the car||From $80,000||Price of the car|
|Interest (for car loans only)||2.48% to 2.78%||Interest costs for getting a car loan (not applicable if you pay in full)|
|Road tax||$686 yearly||Based on 1,500cc car under 10 years old|
|Motor insurance||$1,500 yearly||Variable depending on driver’s profile|
|Regular servicing||$100||Average cost of servicing, may be more if ad hoc repairs are needed|
|Petrol, parking and ERP||$250||A conservative estimate, may vary depending on how often you drive|
The most obvious cost is the price of the car. Cars in Singapore are very expensive due to the many fees and taxes levied, and are definitely considered a luxury good. A more economical Asian car will cost at least $80,000, while the more luxurious Continental cars can go up to over $300,000.
But as you can see, that’s not all. If you take a car loan, there are interest costs to factor in. Currently, car loan interest rates are around 2.48% to 2.78% p.a. There’s also road tax, which is mandatory (you can estimate the tax payable here).
On top of that, motor insurance is mandatory in Singapore (more on that below). Assuming you are well protected with a comprehensive plan, you may spend about $1,500 yearly.
Not forgetting regularly servicing to maintain your car, as well as petrol, parking and ERP (tolls) costs when driving on the roads.
Applying for a car loan as a foreigner
As mentioned above, unless you have a few hundred grand sitting around, you may need a car loan, which thankfully, most banks in Singapore offer. The eligibility criteria vary depending on the lenders, so you’ll need to check with them individually. Popular banks include DBS/POSB, OCBC Bank, UOB, Maybank, Hong Leong Finance and Standard Chartered Bank.
Once you check all the necessary boxes, to apply for a car loan, you will typically need to submit proof of identity, proof of income and your work permit or employment pass. Depending on the model of your car, you can loan either 60% or 70% of the cost, for up to seven years. Singapore does not allow full financing, which means you can’t borrow 100% of the car’s purchase price and must make a downpayment (either 30% or 40%).
Converting a foreign driving licence
If you already have a driver’s licence back home, you may be wondering if it’s valid for you to continue driving in Singapore. If you’re only here for less than 12 months, good news! You can drive here. If your licence is not in english, you will need to obtain a valid International Driving Permit (IDP) or have it translated. In Singapore, the IDP is issued by The Automobile Association of Singapore (AA) and it costs just $20.
If you’re intending to stay for over a year, you’ll need to convert your foreign driving licence to a local one. To do this, you’ll first need to pass the Basic Theory Test (BSS) at any of the three driving schools (Bukit Batok Driving Centre, ComfortDelGro Driving Centre or Singapore Safety Driving Centre).
Once that’s done, you can proceed to apply for conversion at the same driving schools. You will need the following documents:
Original and photocopy of your passport, NRIC, entry permit, employment pass, dependent pass, social visit pass or work permit
Original and photocopy of your valid foreign driving licence
A passport photo (matte, coloured, white background, eyes and ears visible, no tinted glasses and no headgear unless for religious purposes)
(If foreign licence is not in English) An IDP or official translation to English
(If foreign licence does not have date of issue) An extract of your licence record from your local licensing authority
Note that your foreign driving licence must have been issued before you came to Singapore. Also, there is a $50 processing fee that’ll be payable during application. You can pay via NETS or CashCard.
Once you obtain your Singapore driving licence, it will be valid for five years before you have to renew it again. You’ll also be on probation for one year, during which you must not accumulate over 12 demerit points.
Car insurance in Singapore
Last but not least, to drive a car in Singapore, it is compulsory to be covered by motor insurance. Third party coverage is the bare minimum required by law, but if you want better coverage or are taking up a car loan, you can get either comprehensive or third party, fire and theft plans.
There are many insurers with competitive car insurance plans in Singapore, so the most convenient way to compare them is to head over to GoBear’s car insurance comparison page where you can easily compare quotations based on your driver profile and the car you’ll be driving.
We hope this article has been useful in helping you to budget for your upcoming car purchase. After all, whether you’re local or a foreigner, driving and owning a car in Singapore is expensive business!