Why are cars so expensive in Singapore?
Why are cars so expensive in Singapore?

Why are cars so expensive in Singapore?

Why cars in Singapore are so expensive? 

In Singapore, to buy a car, you’d need to have a certificate of entitlement (COE) which grants you the right to purchase and own a car.

In 1990, the government implemented the 10-year Certificate of Entitlement (COE) program as a strategy to alleviate congestion.

Individuals aspiring to own a car in Singapore are required to possess a COE to facilitate the purchase of a vehicle.

These certificates are auctioned bi-weekly, and the government regulates the quantity available for sale as a means of control. There are several categories of COE.

Cat A are cars < 1600cc, Cat B are cars >1600cc, Cat C are goods and vehicle buses, Cat D are for motorcycles and Cat E is an open category except for motorcycles.

COE Category

Cars < 1600cc & 130bhp or 110kW 


Cars > 1,600cc or 130bhp or 110kW

Goods Vehicle & Bus


Open all Except Motorcycle

During the recent round of COE, Cat A was at $85,000, Cat B was at $110,001! 

Not only that, Singapore imposes substantial taxes and import duties on cars. These include the Additional Registration Fee (ARF), which is a percentage of the car’s open market value, and the Goods and Services Tax (GST). These taxes add significantly to the final cost of a vehicle.

The government actively promotes the use of public transportation to reduce congestion and pollution. Policies are designed to make owning a car financially less attractive compared to using public transport. 

New cars typically experience significant depreciation in their first few years. When you buy a used car, much of this initial depreciation has already occurred, allowing you to avoid the steepest part of the depreciation curve. This means you may not lose as much value over time compared to buying a new car.

The Certificate of Entitlement (COE) system in Singapore requires prospective car owners to bid for and obtain a COE, which can be a significant additional cost. When you buy a used car, you don’t have to go through the COE bidding process, potentially saving you money. 

That also means that buying a used car today would likely help to save quite a bit of money if you bought a used car that was registered 4 years ago, the COE would’ve likely been a lot lower than it is priced at today.

Despite used cars being cheaper, opting for one may present challenges that could potentially result in a higher cost compared to purchasing a new vehicle. In certain cases, used cars may have undergone undisclosed repairs, especially in the aftermath of accidents. Superficial cosmetic fixes might make it appear in good condition, but underlying structural damages, deemed too costly to rectify, may prompt previous owners to place the vehicle on the market.

At BW Automobiles, we prioritise transparency and customer satisfaction. All our vehicles undergo rigorous inspection by the Singapore Test Centre (STA), and we furnish our customers with the authentic STA Inspection Report. Digital copies are readily available on our website, while physical copies are conveniently placed within the cars at our showroom.

Many customers see the importance of having an STA inspected report to clarify any underlying problems that are not easily noticeable by the naked eye! Hence, it is important to send your car to STA or to any workshop of your choice! In addition to our commitment to transparency, we offer flexible financing options tailored to the diverse financial needs of our clientele.

 At BW Automobiles, our reputation is built on the positive feedback from countless satisfied customers who have chosen to make their purchases with us. Visit our showroom today to discover more about the exceptional range of cars we have to offer!


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