Blog / Car Insurance
Is it cheaper to own a car or use Grab? Get the facts here.
Technological disruption is changing the way we live. Only a decade ago a chauffeur-driven car was a fantasy for most of us, but now with Grab it is an everyday reality. It’s cheap too. Cheaper than owning a car in Singapore - one of the world’s most expensive country’s for motors?
Let’s find out.
Here are some findings by consumer research firm, ValueChampion.
To carry out the investigation they had to make some assumptions:
- The average car is driven 17,500km annually, or four trips of 12km per day
- The average car is a Toyota Corolla Altis, which gets 6.5l/100km economy
|Main Costs of Car Ownership||Average Annual Cost|
|Purchase Price||$105,000/10 years = S$10,500 per year|
|Annual Insurance Premium||$909.5|
|Road Tax (1,600 cc engine)||$742|
For Grab in Singapore, the following assumptions were made:
- The same daily travel of four trips of 12km.
- The average speed travelled of 50km/h.
|Annual Cost of Ride Sharing Services||Grab|
|Number of Trips||1,460|
|Base Fare||$3,650 ($2.5/ride)|
|Distance Based Cost (17,500km)||S$8,750 (S$0.5/km)|
|Time Based Cost (21,000 minutes)||S$3,360(S$0.16/min)|
What looks like a conclusive victory for having your own car does change a bit when other costs – such as parking – are considered. And credit card schemes tip the scales further in favour of the ride-hailing schemes, for now. While motorists enjoy 20% savings on fuel with some cards, other cards currently offer ride-hailing app users even greater benefits.
So for the absolutely average Singaporean, taking Grab looks like the cheaper option thanks to the benefits given by the credit card companies.
Car owners can do their bit to improve their lot, of course. Not paying commission when buying insurance is a good start. Driving more gently to save fuel is another. And, counterintuitively, driving more distance in a year tips the scales back in car owners’ favour.
Cruising past people forlornly looking at their ride hailing apps on a rainy evening is just the icing on the cake.