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Is It Cheaper to Buy or Rent a Car Long Term in Singapore?

Published by Handy Work on

Is it cheaper to rent or buy a car long-term in Singapore?

The price of a rental car in Singapore varies greatly depending on the type of vehicle and time of year. The cost for a compact is typically around $35/day, but can go up to $100+/day in peak season.

A small SUV costs about $50-$60/day or more, with a luxury car starting from around $100/day. Prices vary greatly based on the age and design of the vehicle, as well as the time and location.

On the other hand, buying a new small sedan (e.g., Toyota Corolla) in Singapore will set you back about S$150-200K. You can also buy used cars at varying prices depending on their condition and age. We saw some for sale for around S$10K just last month!

However, you may not be able to get insured if your car isn’t new or hasn’t been registered for at least 3 months. In addition, there are taxes due when you purchase a new or used vehicle (about 10% of the value).

We did some calculations and found that it is cheaper to buy a car long-term than to use rental car in Singapore. The price difference is about S$20-25/day on average, which can save you up to $2K per year.

However, this assumes that you’re not going to be moving around much. Otherwise, the cost of using rental car in Singapore will be more comparable. If you’re living in an apartment and don’t have a parking space, it may be worth renting a vehicle instead.

What insurance do I need?

You must have third-party liability insurance if you own or rent a car in Singapore (even if it’s just for a couple of days). This covers damages caused by your vehicle in an accident that you are responsible for.

It costs around $200/year for a small sedan with no accidents or traffic violations. If you get into an accident with your own vehicle, then comprehensive insurance will pay out to cover any damage.

You can opt for this while getting your third-party liability coverage. Comprehensive insurance costs about $100/year for cars under 10 years old. Note that most rental cars do not come with insurance, so you need to buy it separately.

We also recommend buying excess/deductible for your third-party liability insurance, as this will reduce your premiums. The deductible is the amount you must pay out-of-pocket if you’re liable for an accident. For example, if you get into a minor fender bender that costs $4K, then the deductible would be $3K.

The excess is the amount that you can claim back from the other party’s insurance. For example, if you hit another car and it costs $6K but their insurance only covers up to $5K, then their excess would be $1K. If there is no other party involved or they don’t have any insurance, then your own insurance will cover all of it.

Is It Cheaper to Buy or Rent a Car Long Term in Singapore?

Insurance Minimum Coverage Amount

Insurance Minimum Coverage Amount 3rd Party Liability S$7500 (Compulsory) Excess/Deductible S$200 Comprehensive S$2000 (Optional)

Note: You can buy both your 3rd party liability and comprehensive coverage at once as a package. We recommend doing this because it works out cheaper.

In addition to the above, you should also consider buying additional coverage to cover any damage or injuries caused by your vehicle. Personal accident and third party liability are often sold as one package at a discounted rate.

This will pay out in case you get into an accident that causes bodily harm or property damage, or if someone is injured inside your car. For example, if a pedestrian runs across the street right in front of you and gets hit by your car, then the third party liability insurance would cover any medical bills they may have incurred.

In this case, we recommend getting a higher amount of personal accident coverage than what they offer for free with the 3rd Party Liability Insurance – it’s just like having health insurance!

Insurance Minimum Coverage Amount Personal Accident S$20K (Compulsory) Third Party Liability S$10K (Compulsory) Excess/Deductible S$0-$200 (Optional) Third Party Liability & Personal Accident S$30K (Optional)

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Are there other ways to save on car insurance?

If you live in Singapore for more than 3 months and have no accidents or traffic violations, then you can apply for a Certificate of Entitlement (COE). This is a form of temporary license that allows you to drive for a certain amount of time before it expires.

The price of the COE depends on the type and age of car, and it can take up to 2 years to get one – we recommend using a broker if you need one because they can save you up to 20% on the cost.

For example, if we were to buy a used car for around $10K with no accidents or traffic violations, then we’d have to pay about $14K for the COE. We could then use this for 3-5 years until it expired, which would save us around $20-30K depending on how much we used the vehicle during that time!

Note that only people who are permanent residents or citizens qualify for this benefit – non-residents cannot apply unless they have been living in Singapore for more than 3 months and plan on staying longer than 1 year.

Categories: Automotive

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