The cost of owning a car in Singapore is mostly decided before you drive: the COE, the Additional Registration Fee (ARF) and the cash down payment MAS requires. On our illustration, a $225,000 car bought with a seven-year loan costs about S$2,560 a month while the loan runs, and about $2,700 a month averaged over ten years once running costs are added.
That is our own example, not a quote. Below is how each piece is set, with the official figures as at November 2026, so you can price the car you have in mind.
A caution on borrowing: a car loan finances an asset that loses most of its value in ten years. Borrow only what you could keep repaying if your income dropped, and keep the loan out of your emergency fund’s way.
What You Pay Upfront
According to LTA’s tax structure, a new car’s price is built from:
- Open Market Value (OMV): the import cost assessed by Singapore Customs.
- Excise duty: 20% of OMV.
- Registration fee: $350.
- ARF: a percentage of OMV in bands. For COEs from the second bidding exercise of February 2023, 100% of the first $20,000, 140% of the next $20,000, 190% of the next $20,000, 250% of the next $20,000 and 320% above $80,000.
- COE: the quota premium from the bidding exercise.
- Others: GST, any Vehicular Emissions Scheme rebate or surcharge, and the dealer’s costs and margin.
COE results. In the first open bidding exercise of November 2026, Category A (smaller cars) closed at $139,001, Category B at $132,334 and Category E (open) at $135,998. The next exercise runs from 16 to 18 November 2026. Premiums change every exercise, so check the latest result before committing.
The Cost of Owning a Car in Singapore: An Illustration
Take an illustrative Category A car with an OMV of $25,000 and a dealer price of $225,000. Our own figures; your car’s numbers will differ.
| Item | Amount | Basis |
|---|---|---|
| OMV | $25,000 | Assumed |
| ARF | $27,000 | 100% of $20,000 + 140% of $5,000 |
| Excise duty | $5,000 | 20% of OMV |
| Registration fee | $350 | LTA |
| COE (Category A) | $139,001 | November 2026, 1st exercise |
| GST, VES, dealer costs and margin | $28,649 | Balance of assumed price |
| Price | $225,000 | |
| Loan at 60% | $135,000 | OMV above $20,000 |
| Cash down payment | $90,000 | 40% |
| Interest, 7 years at 2.8% flat | $26,460 | Assumed rate |
| Running costs, 10 years | $76,820 | Assumptions below |
| Less PARF rebate at 10 years | −$1,350 | 5% of ARF |
| Total over 10 years | $326,930 | About $2,724 a month |
The loan. $135,000 at an assumed 2.8% flat over seven years costs $26,460 in interest, an instalment of about $1,922 a month. Over five years, the instalment is $2,565 and interest $18,900. Flat rates understate the true cost; see car loans compared.
Running costs we assumed, per year: road tax $682 (a 1,496cc petrol car, from LTA’s formula), insurance $1,600, petrol $2,400, parking $1,500, and servicing, repairs and ERP $1,500. That is about $7,680 a year, or $640 a month. Prices for your own car and driving will differ. Our car insurance guide explains what drives premiums.
So while the loan runs, the car costs about $2,560 a month. After it is repaid, about $640. Over ten years, including the $90,000 down payment, it averages about $2,700 a month. Illustration only, not a quote.
The short version: Price a car over its full ten-year COE, not by the monthly instalment. Add the down payment, interest, insurance, road tax, fuel and parking, then subtract the small PARF rebate. Divide by 120 to see what it really costs a month.
The MAS Car Loan Rules From 30 October 2026
MAS’s motor vehicle loan rules apply to purchase agreements on or after 30 October 2026:
- OMV of $20,000 or less: borrow up to 70% of the purchase price, over up to seven years.
- OMV above $20,000: borrow up to 60%, over up to seven years.
The 29 October 2026 announcement extended these limits to private hire cars bought by individuals, including sole proprietors. They apply to banks, licensed and exempt moneylenders, and to hire purchase and conditional sale agreements. Private hire cars not owned by an individual remain exempt.
The cash down payment of 30% or 40% cannot sensibly be borrowed. A personal loan for it adds a second instalment at a higher rate; see our personal loans hub.
What Comes Back at the End
COE lasts ten years. When you deregister, you may get a PARF rebate, based on the ARF paid, and a COE rebate for any unused COE period.
The PARF rebate was cut sharply for new cars. According to LTA, for cars registered with COEs from the second bidding exercise of February 2026, it is 30% of ARF if deregistered within five years, falling by 5 points a year to 5% between nine and ten years, capped at $30,000. Cars with COEs from February 2023 to the first exercise of February 2026 get 75% falling to 50%, capped at $60,000.
On our car, that is $1,350 at ten years, not the $13,500 an older car would have received.
How a Car Affects Your Next Loan
A car instalment counts towards the Total Debt Servicing Ratio when you apply for a home loan. MAS caps all monthly debt repayments at 55% of gross income. A $1,922 car instalment reduces the home loan a bank will grant. If a home is in your plans, see the best home loans guide and test both instalments in our home affordability calculator.
What To Do Next
- Use our car cost of ownership calculator to work out the all-in monthly cost of a car.
- Get the OMV and full price breakdown for the car you want, and check the latest COE result on OneMotoring.
- List your yearly running costs, then put the instalment and running costs into our budget planner.
- Ask at least two lenders and the dealer for the flat rate, EIR and early settlement terms.
- Work out the ten-year total and monthly average using the table above as a template.
- If you already have a loan and want to clear it faster, try our debt payoff calculator.
