Best First Car Singapore: Top Tips to Make the Right Choice

Cars are expensive—especially in Singapore, where prices are nothing short of astronomical. If you’ve managed to scrimp and save enough to finally afford your own set of wheels (well done!), navigating the complexities of car ownership can feel overwhelming. With so many options available how do you know which car is right for you?

An Informed Decision = The Best Choice

If you don’t know much about cars, don’t fret. We’ll guide you through a few simple steps to help you make the right choice. After all, making an informed decision ensures you get the best car for your needs.

Understanding Car Ownership

Owning a car is a significant responsibility that comes with various costs. Beyond the purchase price, you’ll need to budget for Certificate of Entitlement (COE), car insurance, fuel, maintenance, repairs, and depreciation. Research the total cost of ownership before making a decision. Online tools and car dealerships can help estimate these expenses.

Certificate of Entitlement (COE) and Its Impact

A key cost factor in Singapore is the Certificate of Entitlement (COE), which grants you the legal right to own and use a car for 10 years. COE prices fluctuate based on demand, significantly impacting car affordability. When considering a car purchase, factor in the COE cost and decide whether to opt for a new COE or a vehicle with a shorter remaining COE validity. Additionally, COE impacts the resale value of a car—vehicles with more COE years left tend to retain higher value. If purchasing a used car, consider the cost of COE renewal when the current one expires.

Financial Planning for Car Ownership

Proper financial planning is essential to manage the ongoing costs of owning a car.

• Setting a Car Savings Goal: Determine how much you need—including the purchase price, insurance, and ongoing costs—and set a car savings goal. Consider opening a high-interest savings account dedicated to your car fund or exploring other savings options like term deposits.
• Budgeting & Expense Tracking: Identify areas where you can cut back and allocate a portion of your savings toward your car fund. Automating transfers to your savings account can help you stay disciplined.
• Loan and Financing Considerations: If financing is necessary, explore options from dealerships, banks, and online lenders. Check your credit score and assess your financial situation before taking out a loan. Look for competitive interest rates and flexible repayment terms.

Car Maintenance and Servicing Costs

Regular maintenance and servicing are crucial to keeping your car in good condition and avoiding costly repairs in the long run. Be sure to:

• Factor in servicing costs when budgeting for your car.
• Check your warranty coverage and understand the terms of servicing packages offered by dealerships or workshops.
• Schedule routine inspections to detect issues early and extend the lifespan of your vehicle.

By understanding these aspects of car ownership, you can make an informed decision and manage your finances effectively while enjoying the convenience of owning a car.

Choosing the Right Vehicle

Your first car should suit your lifestyle, driving habits, and budget. Research different models—compact sedans, SUVs, or hybrids—and prioritize features like fuel efficiency, safety technology (e.g., adaptive cruise control, lane departure warning), and reliability. Certified pre-owned vehicles can also be a smart way to save money.

Your relationship and living situation influence your car choice. Are you single? Happily attached? Married? Have kids? Live with your parents? If you’re single, a sleek sports car might be perfect. But if you have family responsibilities, a two-seater isn’t practical—consider an SUV or MPV instead.

Beyond that, think about how you plan to use the car. If your daily commute is short and straightforward, a compact sedan or hatchback may be a great choice. However, if you frequently ferry passengers, a four-door vehicle with ample seating is essential. While a sports car might be fun, squeezing kids into the backseat could quickly become frustrating.

Now for the fun part—what do you actually like? Do you want a stylish car that turns heads? A practical one that accommodates your hobbies, like cycling? A fuel-efficient hybrid to save money on petrol? Consider what’s most important to you. With so many options available, there’s a car that perfectly matches your lifestyle.

Test Drive Before You Decide

Even if you’re on a tight budget, test drive a few pricier models first. This helps you understand the difference in comfort, handling, and overall driving experience. Sometimes, spending a little more on a higher-quality car is worth it—not just for your own comfort, but for the safety of your passengers too.

Negotiate Tactfully

Don’t be afraid to negotiate, but do so politely. Ask the dealer about ongoing promotions, discounts, or freebies. A useful tactic is to express interest, negotiate, and wait a few days—salespeople often return with a better offer. When accepting freebies, make sure they’re actually useful (e.g., extended warranty or service packages) rather than gimmicks you won’t use. Also, visit multiple dealers to compare deals before making a decision.

Buying a Used Car

If you’re buying a second-hand car, always get it inspected by a trusted mechanic. Small details—like unusual engine noises—can indicate potential problems. If possible, test drive a new version of the same model at a dealership before checking out the used car. This gives you a better reference point for comparison.

Additionally, you can request the current vehicle owner to buy a Vehicle Accident Report History using the Government Electronic Automobile Record System (GEARS). You can also ask the current owner to check vehicle details through the Land Transport Authority’s (LTA) OneMotoring platform. This includes information such as the vehicle log card, outstanding road tax status, and inspection records. However, accident and maintenance histories are not included in LTA’s records. It's crucial to gather as much information as possible including past car accidents, ownership transfers, and other essential details that can help you make an informed decision before finalising your purchase.

Read our blog on how to spot if your used car has been in an accident.

Check Insurance Premiums Before Buying

Different car models come with different insurance costs. Before finalising your purchase, compare insurance premiums for the models you’re considering. To help, we’ve compiled a list of the Top 10 Everyday Car Models with the Cheapest Car Insurance—be sure to check it out!

Happy Shopping!

Buying your first car is an exciting milestone. With careful planning and informed decisions, you’ll find the perfect car to suit your needs.

Best First Car Singapore. Commonly Asked Questions

How much salary do I need to own a car in Singapore?

To comfortably own a car in Singapore, you should ideally earn at least S$6,000–S$8,000 per month. This accounts for expenses like loan repayments, insurance, road tax, maintenance, and petrol, considering the high cost of COE and car ownership.

Buying a car in Singapore – how much is the downpayment?

The downpayment depends on the car’s Open Market Value (OMV):

• OMV ≤ S$20,000 → Minimum 30% downpayment
• OMV > S$20,000 → Minimum 40% downpayment

For example, if a car costs S$100,000 with OMV above S$20,000, you’ll need at least S$40,000 upfront.

What do I need to know before buying a car in Singapore?

• Total Cost: COE, road tax, insurance, maintenance, and fuel add up significantly.
• COE Category: Certificate of Entitlement (COE) affects car prices.
• Loan & Interest Rates: Understand financing options and repayment plans.
• Depreciation: Cars in Singapore lose value fast due to the 10-year COE validity.
• Usage Needs: Public transport is efficient—ensure owning a car is necessary for your lifestyle.

What should I look out for when buying a used car in Singapore?

• Accident & Service History: You can ask the current owner to check LTA’s OneMotoring or GEARS for past accidents and ownership records.
• COE Expiry: Ensure the remaining COE years align with your budget and plans.
• Mileage & Wear: Lower mileage isn’t always better—look at maintenance history.
• Inspection: Get a trusted mechanic to check for hidden mechanical or structural issues.
• Loan & Insurance Costs: Some older models may have higher premiums or lower loan eligibility.

Is it worth buying a used car in Singapore?

Yes, if you want to save money. Used cars are cheaper upfront, have lower depreciation, and may come with an existing COE. However, factor in potential higher maintenance costs and shorter remaining COE when making a decision.

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