Driving in a car is the most convenient way to get around the city. Although the public transport in Singapore is efficient enough to get you where you need to go, it still doesn’t offer the same freedom, security, and comfort as owning a car. 

Unfortunately, becoming a car owner isn’t as easy in Singapore as it is in other countries. For one, the government discourages having an influx of vehicles to maintain good traffic and to help lessen carbon emissions in the country. 

The process is purposely difficult with plenty of paperwork and fees involved, regardless if you are a local or a foreigner. You need to pay road tax and motor insurance, present a certificate of entitlement, and arrange for insurance.  

However, if you think that owning a car can make your life easier and more comfortable, then I’d be more than happy to show you how to buy your car as a foreigner in Singapore. 

Can foreigners buy a car in Singapore? 

Foreigners can buy a car in Singapore. However, they need to present a certificate of entitlement (COE) which will allow them to legally register and own a vehicle in the city for 10 years. 

Even then, obtaining a COE will not be easy. You need to bid on the certificate and pay the premium related to the bid, which can cost somewhere between $103,721 to $124,501 depending on your car type. 

Aside from the COE, you also need to pay for car insurance, car registration fee, road tax fee, excise duty fee, and additional registration fee. Submitting your original employment pass bearing your Foreign Identification Number (FIN) is also required. 

How much does it cost to own a car in Singapore? 

The cost to own a car in Singapore can go up to $236,338 on fees like road tax alone. While the price of the car itself can cost an average of $106,000 for a sedan, $107,000 for an SUV/crossover, and $183,000 for a luxury car. 

The price of the fee will increase depending on the type of car you have and how much you are paying for your vehicle. Fees like the additional registration and excise duty are calculated based on the market value of your automobile. 

How to Buy a Car in Singapore as a Foreigner

To buy a car in Singapore as a foreigner, you need to have your license converted, present a COE, secure insurance, register your vehicle, and pay all associated fees.  

The guide below will show you in detail how you can accomplish your purchase.

Step 1: Do your research. 

The reason why a lot of foreigners get overwhelmed and surprised the moment they decide to purchase a car in Singapore is due to a lack of research. There is a vast difference between the rules and fees applied in this country compared to other nations. 

While foreign countries make it easier even for the common folks to purchase their own car, Singapore does its best to make the process of purchasing a vehicle as expensive and as difficult as possible for a good reason. 

In 2017, the Singaporean government announced its intention to limit the number of privately owned vehicles on the city road. According to the government, this will prevent heavy traffic and increase efficiency in public transport while reducing carbon emissions. 

To dissuade people from purchasing cars and encourage them to use public transport instead, the government applied exorbitant fees for purchasing vehicles. In short, you should expect to pay at least double the amount for your car.  

Researching the pros and cons of purchasing new or secondhand vehicles can also help you make a better decision. Additionally, you should look for dealers who can help you through the process of acquiring the necessary documents for your investment. 

Some car dealers can help you apply for a COE and even bank loans. If either of these documents is your concern, it would be best to find a dealership that offers assistance in the area of your entitlement application. 

Step 2: Secure a certificate of entitlement (COE).

The COE is one of the most important documents you should have if you want to be a car owner in Singapore. It is a certificate that will allow you to register your vehicle with the Land of Transport Authority (LTA). 

A successfully acquired COE will allow you to own a vehicle that you can use on the road for 10 years. After that, you can renew your certificate in the LTA office to use your vehicle again. 

Here are all the things you need to know about COE. 

Open Bidding Exercises 

The COE is acquired through the method of bidding in an open bidding exercise hosted by the LTA twice a month. 

The bidding event usually occurs on the first and third Monday of the month starting at noon. The exercise will end on the same week at 4 PM, Wednesday unless there is a public holiday in between. 

You will see the number of COEs available for bidding on the Land of Transport Authority website before the start of every exercise. The results of the bidding will also be announced on the LTA page. 

Vehicle Categories 

There are five vehicle categories in Singapore: Category E, D, C, B, and A. These categories are separated based on the car size and status as either privately owned or company owned.   

The vehicle category is one of the variables involved in deciding the price of your bid and thus, it is important to be familiar with it. Below are the descriptions and possible bidding prices for each category type.  

How to Bid for a COE 

To acquire a COE, you first need to submit a bid during the bidding exercise. Only individuals aged 18 years old and above are allowed to submit.

In joining the bidding exercise, you must only submit one bid using your name, bank account, and ID. All bids can no longer be withdrawn once processed, so make sure that all your information is correct. 

Here’s a run-through of the bidding procedure:

1. Make sure to have sufficient funds in your bank account since it will be used to automatically deduct your bid once your application for COE has been approved. 
2. Submit an LTA-recognized ID. This can either be your Singapore NRIC, Foreign Identification Number (FIN), Accounting & Corporate Regulatory Authority (ACRA) number, or Unique Entity Number (UEN). 

If your bid is successful, your vehicle can only be registered under the ID you used in your COE application, so please make sure that you are using the right ID. 

3. Indicate your reserve price or the maximum amount you are willing to pay for your COE bidding. The minimum price to start the bid is $1 but you need to pay more than this if you want to be successful in acquiring the COE. 
4. Once you submit your bid, the amount you selected will automatically be deducted from your bank account along with the administration fee.  
5. You will receive a 6-digit acknowledgment code after you successfully submit or revise your COE bid. You can use this code to revise your bid or inquire about your COE application.  

COE Bid Payment Options

There are two ways to submit your COE bid and that is through online banking and ATMs. 

Unfortunately, there are only a few LTA-recognized banks, so you need to have an account with these banks before your request can be processed. The table below will show you your bid options as well as what banks offer your preferred payment type. 

Step 3: Purchase your car. 

Once you’ve secured a COE, you are free to purchase a vehicle. 

Make sure that the car you are going to buy fits the category you applied for in the COE bidding. Otherwise, your transaction will not be approved. 

During purchase, you only need to present your COE, approved bank loan, and ID. You may be asked to sign a few documents about your payment duration and car ownership as well. 

Step 4: Secure car insurance. 

According to the motor insurance law in Singapore, you are not allowed to drive a vehicle unless it has a valid insurance plan. The minimum requirement for insurance is that it must provide coverage for bodily injury and death. 

The different types of car insurance available in Singapore are listed below. 

Comprehensive insurance is our most recommended plan since it offers wider coverage that will benefit you as a driver. 

Step 5: Register your car and pay the fees. 

After you secure your car insurance, COE, and vehicle, all that is left for you to do is register your car. Schedule your registration appointment at LTA’s official website and bring all the required paperwork on the day assigned to you. 

For ex-pats, it is important to provide proof of employment within Singapore. The recognized proof includes an original copy of your Employment/Immigration Pass Card issued by the Ministry of Manpower (MOM) and the Checkpoint Authority of Singapore. 

If you do not have a document featuring your Foreign Identification Number (FIN) or proof of employment, your car registration will likely not be approved. So be sure to secure these documents before you apply for an appointment online. 

As for the fees, you have the following items to take into account:

With all these fees, it would be safe to assume that you will pay more than twice the price of your vehicle before you can drive it around the city. 

Make sure that you have a huge fund before you decide to buy a car because some of these fees need to be renewed after a couple of years.   

Car Loans in Singapore 

A car loan is a primary option to finance a vehicle if you don’t want to pay for your car in cash. To help you understand car loans in Singapore, we listed down a few key pieces of information below. 

How to Apply for a Car Loan as a Foreigner in Singapore

To apply for a car loan as a foreigner in Singapore, you must be at least 21 years of age with a monthly income of at least $4,000.  You also need to present a vehicle sales agreement, your employment details, and income documentation. 

Your employment details should include your company name, length of service, designation, and monthly gross income.

As for your income documentation, you can present either a copy of your salary credited to your bank account, a computerized payslip, or an IRAS notice of assessment. 

If you have less than 1 year of employment, you can submit your latest CPF contribution history statement. You can also use your Singpass to retrieve your personal information related to your income. 

How much can you borrow in a car loan in Singapore? 

The maximum car loan in Singapore can go between 60% to 70% of the Open Market Value (OMV) of your vehicle. The amount that will be loaned to you will largely depend on the valuation price of your car. 

The table below will show you your possible loan percentage depending on your car’s OMV. 

Whatever amount is left from the maximum car loan would be your downpayment. This downpayment should be paid in cash, so you need to ensure that you have sufficient funds in your bank account before you purchase a car even with a loan. 

How long can your loan tenure be? 

The longest car loan tenure in Singapore can go up to 7 years. You can also opt for a shorter tenure of at least 24 months or two years. 

The longer your tenure, the more interest would be collected from your loan. However, this is not to say that you should just opt for the shortest loan periods. 

Find a loan tenure that would allow you to balance your budget and keep your finances stable even while paying for a car. 

If you are getting a secondhand car, be informed that your loan period will be determined based on the registration date of your vehicle. Car loans are available for vehicles no more than 10 years old. 

For example, if you intend to purchase a car registered 6 years ago, your maximum loan tenure can only be up to 4 years. 

Additional Fees for Car Loans

Aside from your car loan, other fees can contribute to the effective interest rate of your vehicle. These include the following: 

How to Convert a Foreign Driving License to a Singapore License 

To convert your foreign driving license to a Singapore license, you need to pass the Basic Theory Test (BTT) and apply for conversion at the Traffic Police Test Center in your chosen driving center. 

Step 1: Pass the BTT. 

To take the basic theory test, you first need to create an account with any of the three approved driving centers in Singapore. Take a look at the details of these driving centers below. 

Step 2: Apply for a conversion. 

Apply for a foreign license conversion in the Traffic Police Test Center located in any of the three approved driving schools. Upon application, submit the following documents to the available officer: 

1. Original copy and photocopy of your passport along with your NRIC, entry permit, employment pass, dependent pass, work permit, or social visit pass. 
2. Original copy and photocopy of your foreign driver’s license. 
3. A recent colored matte passport-sized picture with white background. Your photo should feature you looking straight with both ears and eyebrows visible. 

Headgears are also not allowed in the photo unless it is for religious purposes. You are allowed to wear glasses as long as it is not tinted. 

4. Pay the processing fee of $50 through NETS or CashCard. 
5. If your foreign driver’s license is not in English, you must submit either of the following documents: 

• International driving permit 
• Official translation of your driver’s license in English. It should be obtained from your relevant embassy, high commission, or any of Singapore’s registered translation companies. 

6. Foreign driving license must be obtained before the issuance of your work pass, dependant pass, or student pass. 
7. If your license doesn’t feature the first date of issue, you are required to obtain a driving license record from the licensing authority in your country. 

After submitting your requirements, you will be notified about the status of your application within two weeks. 

Other Things to Consider When Buying a Car in Singapore

Purchasing a car in Singapore is a huge investment, so before you go through with your decision, here are some of the things you should consider. 

Budget and Affordability 

Your budget is one of the biggest things you should consider before deciding to buy a car in Singapore. With the exorbitant fees and requirements in this country, you should expect to pay more than twice the actual price of your vehicle. 

With that said, think about whether a car is within the scope of your budget. A car comes with all types of expenses separate from the initial cost you have to pay for the vehicle itself, the certificates, and the additional tax and fees. 

Be sure that you are well aware of all the fees that come with owning a car before you sign yourself up for a couple of years-long loans. 

Car Loan Tenure

Some people will tell you that opting for a short-term car loan is the best way to pay for your vehicle since it has less accumulated interest. While this is, in fact, correct, you shouldn’t be afraid of signing up for long-tenure loans if it offers the term you can afford.  

Do not pressure yourself to enter short-tenure loans if you can’t afford the monthly payment. Just settle for a term that can easily accommodate your budget without taking too much away from your daily living expenses. 

Car Function and Features 

Another thing you should consider is the car itself. Pick a car that suits your skills, needs, and budget. 

Don’t base your decision on the car aesthetic alone. Be sure to check if it fits your lifestyle. 

To make an informed decision in selecting the perfect vehicle, create a list with the modifications and specifications you are looking for in your car. 

Let the car dealer know about your list and let them present you with several choices that fit your description. 

Lifestyle and Need

Before you decide to buy your car, ask yourself if this is a good decision for you financially. 

Singapore has a highly effective traffic and transport system, so you should think about why having a car is necessary for you. 

To help you in making your decision, try imagining yourself with a car and look into how it will affect your everyday life. Don’t forget to factor in the expenses necessary to maintain your vehicle. 

If you think that the comfort and convenience are enough for you to look through the possible expenses, then feel free to process your purchase and get your dream ride in Singapore. 

Having a car is convenient, especially if you are someone who loves to go around places without waiting in line. It is also perfect if you are carrying around heavy objects. 

While there are plenty of benefits to owning a private vehicle, it also comes with a lot of headaches in the form of paperwork, approvals, and most of all, money. You need to be secure in your finances if you want to have a car in Singapore. 

If you think you can handle the financial burden, then we urge you to start setting a bid for your COE on the next bidding exercise month. Be sure to check in with your financial advisor as well before signing into any loans. 

To make the process easier for you, connect with a trusted car dealer who can help you apply for your COE and car loan. In addition to the dealer’s professional advice, you should also do your research to make an informed decision. 

Finally, review the pros and cons of having a car before you push through with your purchase. See how it can affect your lifestyle and think hard before you commit.