First Timer’s Guide to Buying a Car




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First Timer’s Guide to Buying a Car

Next to a house, a car is probably the second-biggest purchase in life for many Singaporeans.
For many of us, the freedom and convenience a car provides cannot be overstated. And being
one of life’s big-ticket items, we’re naturally inclined to do what we can to get the most out of our
hard-earned cash.
For the uninitiated, buying a car in Singapore can be a very convoluted process with systems
atop of systems. To help you be a savvy buyer and get the most out of your dollar, we’ve
devised an easy first-time guide to buying a car with everything you need to know!

Type of Car

When you sit down to think about buying a car you should first consider your present and future
use cases.
Are you using it to commute to work daily? You probably want something reliable with good
mileage and fuel economy. Will you be taking your family out on weekend trips? An SUV will
have the capacity to fit you, your family and your shopping comfortably.
Once you’ve figured out what you want out of your car and narrowed down the types that suit
you, then you can start considering other factors like the brand, model and price.

Brand of Car

Ask anyone you know about their opinion on certain car brands and you’re likely to receive a
different answer every time. While people’s opinions on individual brands can be subjective,
there are certain characteristics that define the makes from different regions.
Japanese cars are famed for their value-for-money and reliability. Brands like Honda, Toyota
and Nissan are well-known for being economical workhorses that meet the needs of families
and busy commuters.

Continental cars produced in Europe like BMW, Mercedes-Benz, Audi and Volkswagen are
synonymous with luxury, comfort and top-of-the-line engineering.
Korean cars are also fast becoming a common sight on the roads. Brands like Hyundai and Kia
create vehicles that are great value, affordable and understated. They are regarded as an
underdog compared to Japanese and continental makes but have their fair share of fans.
Regardless of your preference for a certain brand, avoid narrowing your choices too early —
instead, create a shortlist of models that suit your intended usage and make plans to test-drive

Budgeting the Costs for Your Car

Many first-time car buyers get confused by the flurry of acronyms and amount of financing
loans, deals and packages when buying a vehicle in Singapore. There are plenty of costs a
first-time buyer needs to be aware of when buying a car. These costs can be broadly
categorised into upfront costs during the purchase of the car itself, and costs to continue
maintaining, driving and keeping the car on the road after purchase.

The Purchase Price of the Car

There are several components that go into the initial purchase price of your chosen vehicle.
Most dealers will display a price that includes the Open Market Value (OMV), Additional
Registration Fee (ARF), Certificate of Entitlement (COE), Vehicular Emission Scheme (VES)
rebate or surcharge, Excise Duty, GST and profit margin for the dealer.

Certificate of Entitlement

Unique to Singapore is the need to buy a Certificate of Entitlement (COE) in order to own a car.
COE is given out in bidding auctions administered by the Land Transport Authority, and are held
bi-weekly on the first and third Monday of every month. COEs last for 10 years before you need
to renew them. There are four categories of COE depending on the engine capacity of your car,
as well as a free category. Prices for COE certificates vary according to market forces, so it is
always worth checking how much you’ll have to pay before — you’ll have to choose between
bidding for a COE yourself, or having your dealer bid on your behalf with a predetermined range
of prices.

Costs of Keeping Your Car On the Road

Buying your first car is far from a one-time purchase. There are plenty of upkeep and
maintenance costs you’ll need to factor in, as you’ll be paying for these throughout your

The type of car and model you choose, type of petrol you use as well as how often you drive will
affect how much you will have to spend on petrol each month. This number can range from
anywhere between $60/mth to $100/mth or more.

The Land Transport Authority website hosts a fuel cost calculator you can use to gauge how
much you would be spending on a particular model. Owner groups on Facebook are also a
great place for you to ask other owners how much they’re spending on fuel costs each month.
Some dealers may display the car’s fuel consumption on the windscreen, or you can ask the
salesman for the information.

It goes without saying that you’ll need a place to park your car. Besides season parking for the
car park near your home, you’ll also have to consider season parking at your office and top-ups
for the cashcard in your in-vehicle unit.

Road Tax
Road tax in Singapore is set up to reduce congestion on roads and help maintain it. You can
choose to renew your road tax for 6 months or 12 months. The amount you have to pay varies
depending on your vehicle which you can check on LTA’s OneMotoring website here.

Car Insurance
Car insurance is one of the things we don’t think we need until we do. Insurance covers your
repair costs if you get into an accident. It can also cover fires or third-party theft. How much you
pay per month depends on your driving experience, car model, level of coverage and your
insurer, but first-time owners covering the basics can expect to pay premiums anywhere from
$1200 to $2500 per month without No Claim Discount (NCD).

Frequent maintenance and regularly scheduled visits to the workshop are part and parcel of
owning a car. Ultimately, the amount you pay comes down to how you drive, the workshop you
visit and how well you take care of your car. You should also note that some dealers cover
servicing costs for a few years after buying a car as part of your package deal.

Buying a Car for the First Time

Buying a car for the first time can be an overwhelming mess of options and opinions from the
people around you. Rather than having to sit down and look into each aspect of car buying
one-by-one, wouldn’t it be simpler to have an expert you can trust to guide you through the
entire process, so you can make good decisions?

At CarVault, our in-house experts guide you through every step of the car buying journey. From
picking a model to financing options, insurance and after-sales maintenance service, everything
is covered for the most hassle-free car shopping experience in Singapore.

Call or WhatsApp us at 8883 2909 to speak with our experts or book a no-obligations
appointment with us today!