Do you see the table below? These are the changing charges over the past four months for the privilege of driving the car my wife and I already own.
Yeah, it confuses me too.
Here’s the deal. We own a 2002 Mazda 3. It’s a great little car. But if we want to keep driving it, we have to pay the Singaporean government $57,009 SGD, or roughly $44,000 U.S. dollars before June.
Category A Category B Open Category
The Singaporean government is a brilliant revenue generator. With such a great public transit system, the government recognizes that people don’t really need to drive cars.
And those who do want to drive will pay heavily for it.
The proceeds go into the government’s coffers. It’s no wonder Singapore has no long term debt.
When you buy a new car in Singapore, there are two costs associated with it: the cost of the car itself and the certificate of entitlement, giving you permission to drive the car for ten years.
After the ten years are up, as they will be with our car this June, you have to renew the COE. With a small car like ours, it’s just $44,000 U.S.
To renew the COE of a larger car would cost $78,189 SGD.
In Singapore, it’s better to purchase something small.
And what about purchasing another car? If we bought a new car, we’d get the COE thrown in as a complimentary accessory. Is that a good deal? You tell me.
If we bought a 2012 Honda Civic, it would cost $126,900 SGD, roughly $100,000 U.S.
A 2012 Volkswagen Golf would set us back $205,300 SGD, roughly $160,000 USD.
A BMW M Series Sedan could cost $489,800 SGD or roughly $338,000 USD.
But if you’ve read my book, Millionaire Teacher, you’ll know that I’d never buy a new car. So what about used costs?
This is particularly distressing. If we don’t renew our car’s COE, we’ll receive a small sum for the car and it will then get shipped (likely) to Malaysia, where it should enjoy a second lease on life. It won’t be welcome on Singapore’s roads again.
The used car market doesn’t look as promising as we’d like.
A tiny 1.3 litre 2006 Honda Fit would cost $36,800 SGD, and we could only drive it for 4 more years before the CEO runs out. When it does, if we want to keep driving the car, we’d have to pay another $57,000 SGD to keep it on the road (and that’s if the CEO cost doesn’t increase).
With houses in Michigan state going for less than the cost of a new Singapore car, it certainly has me wondering.
According to the Detroit Free Press, the average home in Michigan sold for a paltry $95,882 in January.
You’ve probably heard the expression: you can live in your car, but not drive your house.
But what if you never really own that car?
Andrew Hallam is a Digital Nomad. He’s the author of the bestseller Millionaire Teacher and Millionaire Expat: How To Build Wealth Living Overseas