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Finder guide to car ownership

Here's what you need to know about owning and insuring a vehicle in Singapore.

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Buying a car in Singapore is no mean feat. It’s expensive and could be one of the biggest purchases of your life.

In this comprehensive guide, we explore the major considerations you should make to ensure your (often emotion-driven) purchase decision is as well thought out and rational as possible.

New vs used cars – which is better?

There are few things in life as intoxicating as new-car smell. It’s the sweet, heady scent of luxury, success, and all the good things life can bring all rolled into one.

But is new always better than used? And under what circumstances could picking a used car actually work out better for you? We compare the pros and cons.

CriteriaNew carsUsed carsWinner
Value for moneyIt is said that a new car depreciates the most in its first five years. As soon as you put your pedal to the metal and zip out of the dealership, your sweet new ride instantly drops a few thousand dollars. Ouch.

However, note that not all cars depreciate at the same rate. Some brands, such as Toyota and Honda have a reputation for reliability and are known for holding their value particularly well.

You pay significantly less (depending on the age of the car) as compared to a newer version of the same model.

Furthermore, as the first owner has already absorbed most of the loss, a used car depreciates less. So, you stand to lose less should you resell the car.

With the lower prices of used cars, you may even be able to afford a higher class of car.

Used cars
WarrantyNew cars come with warranty, typically for the first three years or 100,000km (whichever comes first). Some car dealers also offer warranty extensions to 5 or more years. Warranty packages usually include free car servicing, which covers both the interior and exterior of your new car.If your used car has run out of warranty, you may have to pay for repairs out of pocket.

And if you got a dud and have to keep returning it to the workshop for repairs, your eventual bill could run up to the thousands.

New cars
Financing optionsTo sweeten the deal and attract new car buyers, automakers offer a bevvy of incentives, such as cash rebates. New car loans also come with better interest rates. You may also be able to negotiate down the price of the car with the salesperson.

You may end up not paying too much more for a new car, as compared to a new-ish used car that is 1 to 2 years old.

Used car dealers can help provide information on interest rates, maximum loan and tenure should you require a loan.New cars
MaintenanceNew cars are low maintenance as there is no wear and tear and everything is pristine and brand spanking new — from the latest upgraded engine and technology specs, to the gleaming new paintwork and tyres.It’s true what they say about buying a used car — you might just be buying someone else’s problems. The car may have been poorly maintained or involved in accidents.

However, if you have a trusted workshop to go to, you could get them to check the condition of the car before you even buy it.

New cars
Ease of shoppingYou get the full retail experience; the convenience of looking at the full range of car models at various budgets, the fun of test driving different cars to get a better feel of which suits you best, and the good customer service.You need to be a very discerning buyer and know more or less what you want to look out for. Choices may be limited at that point in time. You also need a good trusted professional to help you do a thorough check on the condition of the used car before you ink the deal.

But if you luck out and end up finding a barely used car for a good deal, it could mean significant savings for you.

New cars
Certificate of Entitlement (COE) pricesTo register a vehicle, you must first bid for a COE. You can bid for a COE during the open bidding exercises conducted twice a month.

Before the start of each bidding exercise, the Land Transport Authority will announce the vehicle quota of COEs available for each category.

When you secure a COE from the bidding exercise, you can register a vehicle and use it for 10 years.

New cars are more of a bargain when COE prices are low.

Comparatively cheaper when COE prices are high.Depends

With these factors in mind, it is clear that if your budget is not an issue, purchasing a new car can offer more peace of mind. If you maintain it well and drive it over a long period of time, you will also get your cost per wear down and most importantly, enjoyment out of the drive.

Costs of owning a car

We all know that the upfront cost of buying a car is very high. But there are also many other day-to-day expenditures that could add significantly to your monthly spend.

ERP charges, season parking fees, petrol

If you are a first-time owner of a car, you could be shocked by how the dollars and cents add up. This is especially if you are driving to work in the CBD every day. Here’s an estimate of how much it could cost you:

Cash card top-up for ERP charges, parking$200
Season parking$250 (for office); $120 (for HDB)

Car insurance

All car owners have to be covered by car insurance, minimally a Third Party Only or Third Party, Theft and Fire insurance policy. A TPO costs about $513.28 per annum.

Find out more from our Guide to Car Insurance

However, you may find it necessary to upgrade to a more comprehensive car insurance policy for better coverage against personal injuries and damage to your car.

Your car insurance premium depends on factors such as how long you’ve been driving, whether you’ve had any accidents, and how old your car is. Assuming you are what insurance companies consider a “safe driver”, comprehensive car insurance plans could start at $700 per annum.


As they say, nothing is certain except death and taxes. You will have to pay an annual road tax for your car. How much you pay depends on your car’s engine capacity, age, scheme and fuel usage. Assuming you drive a Toyota Corolla Altis 1.6 that is less than 10 years old, you will likely have to pay $742 in road taxes a year.

And if you drive a vintage car, your road tax could be up to 50% more expensive.

Maintenance costs

Whether you purchase a new or used car, it will need regular servicing maintenance for tip-top performance. New cars have an advantage as they have no existing wear and tear, and enjoy a warranty of at least three years that covers free servicing.

But once the warranty is over, it’s all fair game. If you drive a continental car, be prepared for higher repair costs than Asian brand cars.

Don’t forget, you will also need to replace consumables such as tires, windshield wipers and brake pads when they wear out.

The estimated cost of normal servicing: $250 per session, every 6 months

Minor accidents

No matter how careful you are, there’s a possibility of getting into scrapes. This is especially if you are a new driver and have not developed a good judgement of close corners, or cannot react fast enough to changes on Singapore’s busy and congested roads.

A mishap could result in a few scratches or dents, or the need to replace some parts. While the repair is unlikely to cost you an arm and a leg, you could still be paying through the nose if you have not set aside sufficient funds for such incidentals.

Costs of owning a car

What affects your car insurance premiums

So, how “safe” of a driver are you? That’s important because It’s going to affect your car insurance premiums. Here are the variety of factors insurance companies consider to determine the rates they will charge you on your car insurance.

Your car make, model and age

Here are the main aspects of your car make and model which can make your premium more costly:

  • Luxury car or SUV: your car parts may be more expensive to replace/p>
  • High engine capacity: These tend to be more expensive models and will be costlier to repair. The rate of accidents for such cars are also higher, and they tend to deal more damage because of their higher power.
  • New car: Older cars are cheaper to insure as reconditioned old parts are usually used to repair cars more than three years old.

Your age, gender, marital status

Drivers in their 20s are deemed by insurers to be more reckless and accident-prone than those in say, their 40s.

Male drivers also tend to be charged a higher premium than women as they are significantly more likely to get into an accident.

If you are married, you could be viewed by insurers as a more responsible driver.

Driving experience and demerit points

Accumulating more years of driving experience without a hitch or demerit points translates to lower premiums. This is because you have built a proven track record for being a “safe” driver.

If you are a young driver slapped with a high insurance premium, fret not, you need only prove yourself to be a safe and responsible driver over the next few years to get a friendlier rate.

Number of claims filed in the last 3 years

If you’ve made a claim(s) recently (even if the accident was caused by the other party), you will be deemed more likely to make a claim by the insurance company and charged a higher premium.

No Claims Discount (NCD)

The more years of driving you’ve had without making a claim, the lower of a risk you will be deemed to pose. You will be rewarded with a discount on the full-priced premium from your insurer.

While you may have an NCD of 50%, it does not necessarily mean that your premium will be discounted by the exact same percentage. Other factors, such as those mentioned above will come into play. However, your premium discounts will generally be in the approximate range of your NCD%.

Add-ons – should I get them?

Upselling tends to have a bad rep, but when it comes to car insurance, some add-ons can offer great value to your overall package. We list down the add-ons that we think are truly worth it.

Protected NCD

After years of careful driving and playing by the rules, you do not want to have to sully your record with a claim which could result in a significant rise in your insurance premiums.

Many insurance companies will let you cover your NCD for a small fee. Should you need to file a claim, you will still get to keep some or all of the discount and maintain your premiums.

Even if you do get into an accident and are considered at-fault, your NCD will be protected from dropping by the customary 30%.

Roadside Assistance

When your car breaks down, Roadside Assistance can be a real life-saver. In addition to emergency towing services, you could also get a flat tire change, battery jump-start, locksmith service and even emergency fuel delivery.

Personal injury cover

Most comprehensive policies already offer a degree of personal injury cover for the insured but it may be worthwhile to enhance the level of protection to a higher range of a $100,000 payout. This is especially important if you do not already have a full coverage health plan or any medical insurance.

Windscreen cover

Windscreen damage can be fairly common but relatively cheap to repair. As such, a separate cover may come with a lower or zero excess. It won’t affect your no-claims as well, which is a real plus.

Myths about car insurance claims

myths about car insurance claims

Myths about car insurance claims abound. Let’s right the wrongs and dispel some untruths about car insurance claims.

Your NCD will still be affected if you get into an accident that’s not your fault

If your car is damaged through no fault of your own, you will not lose your NCD and there will be no upfront excess payment required on your part.

You stand to lose a significant amount of NCD when you make a claim

If you are at fault for an accident and have to make a claim, there will typically be a 30% reduction in your NCD, which will result in a higher premium for you.

However, some insurers offer you a lower NCD reduction with some comprehensive plans, which will help to keep your premium affordable.

You cannot insure your car if it has been modified

Always check with your insurer before modifying your car, be it for cosmetic or performance purposes. You may incur extra charges to insure your modified car, but it trumps getting your claims rejected when you most need it.

As long as your modifications are compliant with Land Transport Authority regulations, most insurers may offer coverage for it.

You will be paid what your car originally cost you if it is stolen or written off

Typically, you will only be paid the current market value of your car. However, if you’ve opted for a more premium car insurance plan, the insurer could even replace your car with a brand new one of the same make and model. This has its limitations too and your car has to be a new purchase that is less than two years old.

You have to report all incidents to your insurer or your policy will be voided

Certain insurers only require you to declare incidents where you were at fault. Others, such as those including cases beyond your control or “acts of God” do not have to be declared.

6 dos and don’ts following an accident

dos and donts following an accident

Sometimes, accidents in life are unavoidable. If you do get involved in one, here are the steps to follow:

1. Call for an ambulance if there are people who are hurt; make a police report

Check if you are okay, then look at the other people around you to ensure that no one is in a dire, life-threatening situation. If the injuries are severe, call for an ambulance at 995. Conduct first aid or CPR if you are a certified practitioner.

You should also call the police at 999 if the accident involves fatalities, pedestrians/cyclists, hit-and-run cases, life-threatening injuries, damage to government property or foreign vehicles.

2. Gather evidence

Next, have a look at your car and assess its damages. Take as many photos as you can of your car, the scene of the accident (lane markings, skid marks and any debris nearby) as well as the other vehicles involved. Snap the shots from a variety of angles and positions to provide a fuller context of what happened. Don’t forget to take photos of the license plates of all the vehicles involved.

Also, try not to move your car from its position after the crash as that might give the car insurance company reasonable doubt to reject your claim.

3. Exchange particulars

The information you should get includes the other driver’s full name, NRIC number, contact number, home address as well as the name of their insurer.

Do note that you could meet a difficult driver who refuses to give you their particulars. In this case, the photos of their license plate numbers should come in handy.

If there are witnesses, get their particulars too if they are willing to vouch for you.

4. Report the accident to the insurance company

You need to report the incident to your insurance company within 24 hours, irrespective of whether you intend to claim from the other driver directly or from his insurance.

If you do not, the insurance company may have cause to reject your claim or claims made by the other driver. You stand to lose your NCD upon policy renewal, or the insurer may refuse to renew your policy altogether.

5. Call for a tow truck

If your vehicle needs to be towed, contact your insurer for help. Some comprehensive car insurance policies cover roadside assistance which includes emergency towing. Otherwise, your insurer will advise you on getting a tow truck, as well as the workshop to send your damaged car to.

You should only use tow truck operators and repair workshops that have been authorised by your insurer, to ensure your claims go smoothly.

6. Claim for personal injury/property damage

Whether you are the victim or at-fault, you need to decide if you will be making a claim. If your NCD is sizable, and the damage is superficial, cheap to fix and does not risk safety, it may be better to settle out of pocket so your NCD is not affected.

Should you decide to make a claim, provide your insurance company with all the information you have on the other driver so they can act on your behalf to make a claim against the other driver’s insurer.

If you have caused a serious accident and the police get involved, you may be penalised for dangerous driving based on the extent of harm caused and your responsibility for the crash.

And if you are the victim and have suffered severe injuries or damage to your vehicle, you should also consider hiring a personal injury lawyer to assist you in making your claim and getting the maximum payout you deserve. Your insurer should be able to advise you on how to engage such a lawyer.

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