Car Ownership in Singapore

The below is taken from The Sunday Times, Chery QQ from China is the cheapest car to own in Singapore right now and it’s still quite expensive.

Cost of owning a Chery QQ

Car Price (with COE): $32,000

Financing Charges: $5,096 (70% loan over 7 years)

Cost After Financing: $37,096

Estimated Scrap Rebate by 10th Year: $3,700

Effective Cost: $37,096 – $3,700 = $33,396

Annual depreciation on capital expenditure: $33,396/10 = $3,339.6 – A
Annual Usage Charges

Petrol: $1,500 (abt $125/mth)

Insurance: $1500 (26 yr old male with zero no claims bonus)

Road Tax: $454

Parking (Home & Workplace): $3000 (abt $250/mth)

ERP: $1000 (abt $83/mth or $2.7/day)

Maintenance (Regular servicing and inspection fees but excludes fines, accidents): $300

Total Usage Cost: $7,754 – B
Annual depreciation & usage: A + B = $11,093.6

Monthly Car Expenditure: $11,096.3/12 = $924.5

The figure is $924.5 just to own a small car in Singapore. The example above I guess is referring to someone who drives to work and I dun think his workplace is in the CBD area as the parking fee over there is insane. The season parking alone can be as high as $240 or more. Even my boss takes the public transport to work when we were still in Tanjong Pagar although her pay is quite high.

Let’s take an average degree holder with a gf in Singapore, earning $2500/mth as an example. He would be taking home abt $2000 and he owns a Chery QQ. He had only abt $1000 to spend on himself and maybe his gf after paying for the car. Food and entertainment expenses would be around $200 to $600 if he pays for his gf as well (Normally he does). Remaining $400 would be used to pay for bills and other miscellaneous stuffs. In short, he would have almost no money left and the cycle goes on until he receives the next paycheck. This is life of an average male Singaporean who aspires to own a car.

The same goes for people who earns more than $2500 a mth and wants to own a car. The sad fact is, the more you earned, the more you would spend unless you are really disciplined which is quite hard but not impossible. You would wanna own bigger and better car, buy more material stuffs, eat in restaurants, live in condominium etc… If you are disciplined, probaby you might be able to save a few hundreds a mth? If not, you would be just like the example above, left with nothing at the end of the mth until the next paycheck. So the next time you see a car owner, he’s either living with not much savings, have some savings or he’s obviously very rich.

I learnt in my accounting that a car is categorised under assets when it’s obviously a liability. So why do people still wanna own a car knowing that it will suck them dry. The benefits are quite a lot like convenience, saves time, boost your attraction level (people with a car is usually more fun to be with but not all the time) and maybe ‘buy’ a little love. Honestly speaking, if a girl would have to choose between 2 guys with the same character but only one of them has a car, she would obviously choose the one with the car although it’s never true. The car is sort of a ‘tag’ telling them that Wow, this guy owns a car so he’s quite rich (ablility to provide, a provider) when actually he isnt if you wanna talk about an average guy (He’s living life on the edge every mth). Girls who say that they would choose the one with better character is not totally been truthful. Subconciously, they would want the guy with the car though character and whether there’s chemistry do come first for most girls. But I’m talking abt both having the same character.

To conclude, despite the high cost of car ownership in Singapore, most people with a licence would still aspire to own one. Anyway, public transport is also not getting any cheaper nowadays though it’s still much cheaper than having your own private transport. And to those who is so used to driving, it’s hard for them to suddenly switch to public transport so they would still continue to drive.

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~ by livingthedream on July 11, 2006.