According to the Worldwide Cost of Living Report 2018 by the Economist Intelligence Unit, Singapore has held the title of the most expensive city for the fifth straight year since 2014. The top factor contributing to Singapore's ranking is the cost of car ownership.
Singapore is the most expensive place in the world to buy a car (and maintain a car), thanks to its successful car control policy. When you plan to buy a car, it is important to understand the breakdown of the car price you have to pay. If you are a foreigner and hold a foreign driving license, you need to convert your foreign driving license to Singapore driving license after 12 months.
As a highly populated city-state, Singapore cannot afford a massive traffic jam. So the government invested billions of dollars each year in the public transportation system to make it affordable, reliable (decreasing in recent years), accessible and efficient.
For car ownership, the Singapore government fabricated a complicated, fair, and effective car regulation system. Since 1990, the Certificate of Entitlement (COE), complemented with tax and duties, has been introduced (and tweaked) to regulate the demand, and Electronic Road Pricing (ERP) to regulate road usage.
Today, when you pay the “purchase price” to the car dealer, less than 25% of the price is the actual car value. In simple words, for the same money you paid, you probably can buy 3-4 identical cars in the US.
So, why a car in Singapore is so expensive?
When you buy a car, you are not paying only for the car. The purchase also includes at least the following 10 items:
- COE (you can bid one for yourself, but most dealers will mark up the car price);
- Open Market Value (OMV);
- Additional Registration Fee (ARF);