Should you buy a Car in Singapore?

Singapore is the country where simply the permission to keep a car on the road for 10 years (its called COE) can cost up to a 100,000 dollars. This is before you add in punitive import duties, wealth tax resembling road tax and eye watering large dealer margins. On the other side, you have probably one of the world's best public transport systems, efficient, connected and incredibly cost effective.

So then, how can you possibly justify buying a car in Singapore?

The answer is, that you can, but only under certain qualifying conditions. And that is what we are going to get into. But first let's get one thing straight. Owning a car will never make sense financially vs. the alternative modes of transport, including taking cabs. A quick illustration.

The cost of owning a car in Singapore starts at about S$15-20K a year and can go up very quickly. I explain it in detail here. Now let's compare it vs a Cab + Public transport lifestyle.

Let's assume you take a 20 dollar cab twice a day 5 times a week. A reasonable assumption given you may not go to office everyday and if you work in the CBD, the train is likely to make more sense. Let's assume you spend a grand total of 45 weeks in the country, accounting for travel, leisure or otherwise, a likely prospect given Singapore is just a city state. This grand cabbing lifestyle of yours will run you in at $9000/year. Still half of the entry price of car ownership. Add in 500 public transport journeys just for fun at 2 dollars a pop. You are still at $10,000 well below the $15-20K that car ownership begins at.

With all that said, let's get into the three or four circumstances that can help justify a car in Singapore over the excellent public transport and relatively affordable Taxis

Reason 1: Kids/Pets/ Infirm family members

This is the main logical reason to own a car in Singapore. Regardless of the convenience of the bus and mrt or that app on your phone, nothing beats the convenience of your own vehicle at crunch time. It may serve as a portable wardrobe for your family's stuff as you run from place to place doing errands. It will save you the hassle of trying to find a cab in the rain (a nigh impossible task and honestly the main case for car ownership) in the moment that really matters. The value of your aging parent not having to stand for that 10 minutes and getting the car exactly when they need them is difficult to quantify. And for pets, pet friendly cabs are an option but they are rather restrictive in nature unless you encounter a particularly friendly taxi driver. And Pets are of course banned from public transport, limiting options for pet owners even further. Can you put a price on being able to take your dogs to Sentosa beach or East Coast Park and frolicking in the water with them? Perhaps you can.

Reason 2: Job Nature

To begin this with an anecdote, my friend and I both joined Procter and Gamble at the beginning of our careers in Singapore. While I joined the Marketing function, he had a choice between Finance and Sales. He chose Sales, not because he fancied himself as the next Harvey Spector (the ultimate closer), but Sales in Singapore came with an incredible perk. A company car.

Sadly this story doesn't end with my friend driving off into the Sunset, selling Shampoos and Razors to whoever would buy them. He left Procter and Gamble for better opportunities but a year later. And Procter and Gamble Singapore stopped the car incentive for sales a few years later and started giving a taxi allowance.

This story illustrates two things. One, how aspirational car ownership is in Singapore that one would make a career decision based on getting a car (I will not lie. I was tempted to join sales as well just for that reason). Secondly, how even professions that justify a car in most countries struggle to do so in Singapore.

There are a tiny handful of professions that may justify having a personal car in Singapore, though that is usually if you are at the top of your game and the economics can support it. A good example, again drawing from life, is my wife who is a leading Realtor here in Singapore, often selling very expensive houses and often ferrying around clients. The math for once is rather compelling.

There is a measurable cost of taking a cab to five or six viewings all across Singapore (it would easily be more than a 150 dollars a day), or the unmeasurable aspect of being fresh all day despite a punishing schedule, having access of all the paraphanelia a Real Estate agent requires in one's car and just a happy fresh client avoiding Singapore's heat in a comfortable Mercedes E Class, Germany's luxury taxi of choice. Add to that diesel economy from Mercedes OM654 engine (that's the E220d for normal, non car people), I daresay having a car adds thousands of dollars in value to my wife's practice. But this scenario is an exception not a rule as even most real estate agents would not have the practice size to allocate $20K a year on the fixed expense of a car.

Reason 3: Insanity (aka myself)

There is a particular disease that afflicts an unfortunate percentage of homo sapiens. It's called the thrill of driving. If you like at it, wanting a pilot a multi-ton machine with significant liability and even more cost makes no sense, but a small percentage of us have convinced ourselves that it is the essence of life. And if you fall into that small percentage (like me), there is no getting convinced out of it. I raced to get a drivers license the moment I turned 18 and 20 years later, there are no real signs of slowing down. Luckily there was ways and means to fund this irrational desire , even in Singapore. It requires deep understanding of the Singapore market and a deeper obsession with cars in general. Then you can identify gaps in the market, find opportunities in consumer perception and pricing, and most importantly save 10s of thousands of dollars vs a generic approach.

This is what I have been doing since I bought my first car in Singapore 14 years ago and have been through 15 cars in the process (I cheat slightly since I'm included the three cars I bought for my wife but you get the picture). My friends think I am a touch mad and I perhaps am (hence reason 3 being insanity) but they have benefited from my obsession when time came for them to make a 100,000 dollar or more decision to buy their own car when reason 1 came calling. And that is why I now offer Car Consulting in Singapore as a service, to help buyers decipher this complex, expensive market and more important, save thousands (if not 10s of thousands) of dollars.

As always, instead of reading, you can watch this content on Youtube below