Once you’ve paid that big price tag, don’t forget that you have other expenses that really add up.

As the price of COE premiums fall (Cat A prices now at $61,000), some of my colleagues are considering buying a car. One of them decided to buy a used car with 3 years remaining on the COE (her old car was recently scrapped after 10 years). She’s in her 50s and figured that in 3 years time, she would either be semi-retired or have flexi-work arrangements. So she thought 3 years was more than adequate. But when she told me the price she paid on this supposed “good deal” ($35,000+), I was shocked and wondered if she had done the math. So I decided to in this post.

She lives adjacent to Clementi MRT Station and like most people, commutes to the central region. She typically drives to work 6 days a week. And often uses the car on her off day to run errands and visit with friends and family. On her working days, she drives directly to her workplace and then parks there for the entire duration of her shift. Likewise, when she returns home, she parks the car at the HDB car park. There is a food centre nearby so she typically doesn’t use the car after she returns home, though she might swing by a restaurant to get take away on her way back from work.

It is easier to compare the cost of different means of transportation by converting the costs into a per day basis. I compared the estimated cost of her car on a per day basis to that of taking a taxi or other form of transport. Here’s what I come up with.

Driving Your Own Car:

The Assumptions:

  • Assuming her salvage value is $5000, she is paying $10,000 per year for “use” of the car. ($35,000 – $5000 = $30,000. For a period of 3 years, that = $10,000 per year).
  • Assuming she works 300 days out of the year (excluding off days, holidays, MC days, etc.), that’s $33 a day to use her car for commuting purposes. This is what I labelled the “daily rate for commuting”. I decided not to include her off days in the estimate since those days vary quite a bit in how much she uses her car.
Daily rate for commuting (for return trip): $33


However, this figure does not include carpark fees, ERP, petrol, maintenance, repairs, or insurance; and if you took a loan to buy a car, interest.

Here is a very conservative estimate taking into account the aforementioned expenses (on a per day basis).

Daily rate for commuting (fore return trip): $33
Carpark at work: $10
Carpark at hdb: $3
ERP: $2
Petrol (assuming $70 every 2 weeks): $5
Maintenance (assuming no maintenance cost): 0
Insurance (assuming $1460 per year): $4
Interest (assuming no loan): 0
Total (per day): $57


What is Excluded:

  • Maintenance cost.
  • Interest on loan payments.
  • Intangible/other costs such as having to drive, time wasted finding a parking space, accidents or other related expenses (e.g., parking tickets, traffic tickets, theft, vandalism).
  • The social & environmental costs (i.e., air pollution, noise pollution, productivity and time wasted due to traffic jams, etc.)
  • Intangible benefits such as the feeling of freedom and control, time savings, and not having to book a taxi or plan your route based on the public transport system.

If these above items are applicable to you, the daily cost of using a car may be much higher. Also, if you buy a more expensive/luxury car, your cost will increase.


Taking a Taxi:

Now let’s take a look at if she were to use a taxi. The taxi charges, depending on which taxi she books vary from $14 to $16 (includes booking fee) for a one-way trip. Some taxi drivers will allow you to make monthly or weekly arrangements with them, particularly if they are heading in the same direction that you are heading in anyway. These arrangements usually comes with discounts on the fare.

There are also taxi sharing, car pooling, and ride sharing platforms that make daily commutes even less expensive. They can be as little as $5 per trip.

Taxi daily rate (U.P. for return trip) $28 – $32
Taxi daily rate (with arrangement discount that excludes booking fee) $22 – $26
Ride Sharing $10 – $20


In the case of my colleague, driving her own car costs her 2 – 6 times more compared to taking a taxi or ride sharing.

Of course, by owning a car, you have more control. You have the “ownership” status (and one of the infamous 5 “C’s”). But the flipside of ownership is responsibility. You are responsible for maintenance and upkeep, for safe driving, for observing traffic rules, and for loan payments.

And responsibility can easily slip into obsession. I’ve seen grown men lose control and become deranged when a small pebble hits their car. For them, the car becomes a top priority in their lives. And other things become less important, like their health and relationships. (This is often the case when a person feels they must work harder until burnout and exhaustion just to afford their car payments). And just like home ownership, an outsider looking at the situation would wonder what ownership really means. Does you own the car? Or does the car own you?



Everybody’s situation is different. And you will have to work out your own estimates and calculations. You will have to consider certain things, and certain roles you have. If you’re a business owner and must make frequent trips across the island on a daily basis, owning a car may makes sense. If you must ferry children, elderly parents, or other dependents around, owning a car can be a huge convenience.

In my colleague’s case,  the costs don’t justify owning a car, especially because she lives adjacent to an MRT Station and can take public transport for less than $5 a day for a return trip. Or, if she wants to save time and ride in comfort, she could have just taken a taxi and still saved money.

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