The Car Conundrum

For the past 30 months blogging on this site, I haven’t really talked about cars. Since I am supposed to be “A Frugal One” and given the cost of owning a car in Singapore, you would have expected me (especially in my earlier days)  to bash silly car buyers in Singapore. 

But well, I haven’t.

Because I know that I desire the experience of owning a car (at least once) in my lifetime.

Image result for please, just this once meme

Hopefully, this doesn’t happen 10 years down the road…

And yes, I am writing about this car conundrum as I am contemplating buying one in the very near future. 

Why We Don’t Need One

  1. Most of the time, I either work from home or walk to my students’ place for lessons.
  2. It is extremely costly to own a car in Singapore. Relying on public transport and the occasional taxi should only set a couple back by at most $500 a month. However, driving a new but no-frills car for 10 years could easily cost up to $250,000! That could be $200,000 saved over 10 years!
  3. We seldom have late nights out and the car could be spent idling in the carpark, a big waste of our money.
  4. There are opportunity costs to the money. Buying a car might result in us delaying financial freedom for a decade.

Why I Am Thinking Of Buying A Car

Having grown up in a household which was never anywhere near owning a car and having driven a max of 10 times since getting my driving license eight years ago, I admit that I know nuts about engines, torque or throttle. But I do know that we are approaching the best time to buy a car in the past 5 years.

Simply put, COE prices are trending down. Yours truly would probably not bite now, but it’s much harder to resist if COE for CAT A goes down below $25,000 (I am not so greedy as to be expecting <$10K).

My main reason for buying a car?

If we are going to have a kid soon, the convenience could come in very handy for the Mrs and if we are not having one, we could easily afford a car. 

Just to let you know, the Mrs is not really in favour of owning one.

Questions That I Have

I am no expert in this area so I do have alot of questions with regards to owning a car.

  1. Using this article as a gauge, It appears that the 50% downpayment ruling has caused demand for 2nd hand cars to spike. Thus, is it true that there is actually no value in buying a 2nd hand car? Is the depreciation of new cars mostly lower than 2nd hand cars right now?
  2. For someone buying a new car for the first time, is it a folly to be buying from a Parallel Importer instead of an Authorised Distributor?
  3. Would it really be much cheaper to lease when one “needs” the car, even when prevailing COE is high?

Would appreciate views and opinions on this issue!


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20 thoughts on “The Car Conundrum

  1. Bob


    1. Don’t have a mathematically based answer for this. What I do know is what route you go is largely based on cash flow – how much cash are you will to stump up for a car right now? Some people use a strategy of buying old cars with only a year or 2 left, because their cash flow is limited.

    2. I feel it’s always a gamble with PIs for the sole reason that dealerships are established, and probably won’t go bankrupt or screw you over with the warranty (“oh this isn’t covered!” “Oh, you voided the warranty!” “Oh, the parts will only be in in 6 months time!”). In both, you can make a lot of noise, with a lot of other people, to seek redress. With PIs, I feel you have less leverage. But PIs tend to be cheaper upfront.

    3. This would definitely be cheaper. But you get that in exchange for convenience. Unless your’e situated near a car sharing site (like in your carpark). Then it might be as convenient as owning a car!

    In general, when faced with the decision of whether to buy a car or not, I think it comes down to assessing what “quality of life” means to you. If a car adds to that, it might be worth spending the money. For example, I work in Tuas and live in Yishun. If I didn’t drive, I’d spend hours taking public transport, taking away from my “quality of life.” So I stump up the $ to be more comfortable.

    Could I use the money for something else to make me more comfortable? Of course! But I know the daily irritation of having to get from Yishun to Tuas, and back, would just slowly eat away at me. Sometimes what’s so much more important to me is a quiet drive to or from work, than say a weekend getaway or a fancy meal.

    If you have children, the convenience of having your own wheels can really add to your quality of life, PLUS make available other money saving opportunities that where not available to you previously. For example, buying things wholesale, or further but still accessible childcare for your children. I’ve heard this repeatedly from other parents with children – thank god for the car! So many options, so many more opportunities.

    It’s also important to think about what you’re saving for. Is it a huge pot of gold to be enjoyed in retirement? What if you never get there because of death or illness? The numbers may dazzle, and the potential for investment returns might be exciting, but that’s only useful if you can still enjoy the returns then! If you can afford it, it might be a better idea to enjoy a little bit of life as you live it.

    That said, once you get a car, it’s hard to put the genie back into the bottle 🙂

    1. My 15 HWW Post author

      Hi Bob,

      Thanks for the sharing and insights!

      Having not owned a car before, I am always puzzled by how often one needs to “service” a new car. I always wonder if it’s a false “peace of mind” but seems like my perception is likely to be wrong.

      I am happy for you that you are enjoying your ride and that the travel to work is not “more painful” than it already is.

      I think I will think through again how much I will “enjoy” the car before making a decision!

      1. Bob

        Most new cars come with a 3 year warranty on parts and labour. Some come with a 5 year warranty. So, if anything breaks down, repairing/replacing it will be free.

        The only maintenance costs you will have to pay are

        1. 6 month / 10,000 km servicing

        2. wear and tear items like tyres, wipers, brake pads

        3. repairs arising from an accident.

        In terms of cost, these are manageable and predictable. You won’t have to worry about an unanticipated costly gearbox repair for example (which happened to my 8 year old car recently, unfortunately).

  2. Jes

    Hi 15HWW,

    My current second hand care is due to renew soon. Guess you have the option not to buy but I really need it for my job! Are you also looking at Honda vezel range as you mentioned PI? Just go for the reputable ones even though they are more expensive. I agree that second hand cars are more ‘expensive’ in terms of depreciation currently.

    Honestly, once you start having a car, you may not be able to go back to not having one! It’s definitely useful for a family. You have earned enough, time to spend 🙂

    1. My 15 HWW Post author

      Hi Jes,

      I was looking at some 2nd hand vehicle a few months back and were horrified that their depreciation cost could be higher than brand new cars.

      The Honda Vezel is indeed selling like hot cakes and it’s definitely in the shortlist. However, I have heard horror stories regarding PIs and wonder if I were to buy a car, should I take the risk?

      Since your job requires it, I guess it’s only a matter of time before you get a new ride. If I do get one, I am really adamant about not getting “addicted” to it. =p

  3. Jes

    Hi 15HWW,

    My current second hand car is due to renew soon. Guess you have the option not to buy but I really need it for my job! Are you also looking at Honda vezel range as you mentioned PI? Just go for the reputable ones even though they are more expensive. I agree that second hand cars are more ‘expensive’ in terms of depreciation currently.

    Honestly, once you start having a car, you may not be able to go back to not having one! It’s definitely useful for a family. You have earned enough, time to spend 🙂

  4. Joyce

    Hi 15HWW,

    Once Mrs gets preggie, a car could be useful because of the number of trips you need to make to buy baby items as well as visit the gynae and sometimes depending on individual ladies, being preggie for the first time during the first trimester can be quite horrible so a car could make it more convenient. However, with the upcoming ERP 2.0 system, COEs could take a dive in a couple years time so it really depends on your needs at the point of purchasing your car.

    1. My 15 HWW Post author

      Hi Joyce,

      Thanks for the advice. You are right, the main purpose behind getting a car is to allow the Mrs to go to work more comfortably.

      We definitely do not need it at this moment, that’s why we are still monitoring.

  5. Jared - SMOL

    15 HWW,

    Isn’t this beautiful?

    Typical example of how men and women make decisions.

    Men like to compare and weigh the pros and cons, try to be as logical as possible.

    Women? They just ask, “Does this dress make me look fat?” It’s all feelings.

    Just kidding!


    1. My 15 HWW Post author

      Hi Jared,

      Long time no see you here. But I knew I would get a comment from you for this post.

      No “hole in the heart” poke? I am surprised!

      Hey, I admit first. =p

  6. GMGH

    Hi Mr 15HWW,

    After studying the LTA statistics, I’m on the view that COE will trend lower and probably 2017 would be the trough of the COE, unless ERP 2.0 and some other factors come into play that really tosses up the vehicle market.

    I think the utilization rate of the car is very important to consider. Can the Mrs drive as well? Would there be any other people / drivers that could benefit from the car? If the car is going to be sitting in the car park most of the time, then you would be paying a very high premium for the convenience of a car, which may or may not be worth it depending how much that is valued to you.

    Perhaps to increase the utilization of the car, freelancing Uber/Grab could be an idea if you have the time and energy. Other than charging friends or neighbours to borrow your car (which you might not have the heart to do), I don’t see how else the car might be better utilized if it doesn’t already have big impacts to your routine lifestyle. You might find that it is more expensive than a taxi, which you still need to drive, park and maintain (washing your car, vehicle inspections, workshop trips, insurance renewal, road tax payment, etc etc).

    I am lucky to be in a household with a car, yet most of the time when I go out, I find myself preferring not to take the option of driving even if it is available to me. I don’t have to worry about driving when I am tired (and I can do other things instead), finding parking, I’m not restricted to only wander is an area around my parked car and I can also drink alcohol if I wanted to. And this isn’t even taking into account the additional monetary costs.

    If you aren’t a supper guy, don’t frequently travel to ulu places and don’t require a vehicle for your work, I personally find it really hard to justify owning a car instead of whipping of Uber and Grab and letting drivers bid to be at your beck and call.

    Then again, the point of money is to spend it on things that make you happy. The convenience of a car is hard to place a dollar value on because it varies so much for each individual. Some people can’t live without it. Others don’t even see the need to get a driver’s license.


    1. My 15 HWW Post author

      Hi GMGH,

      Always good to hear from you.

      We are close to 2017 and COE prices are already trending down, so you could be very right. If ERP 2.0 comes into play, it should theoretically become even cheaper.

      The Mrs will actually be the main driver. To be honest, sometimes when we have access to a car (her family has two cars right now), she’s the one driving and I am being fetched around. =p

      But I get your point about the utilisation rate of the car. It’s hard to imagine though. Sometimes, I do wonder if we are really homey people or our behaviour is constrained by the fact that we don’t have a car.

      Both of us like to walk to places so I agree with you that sometimes, taking public transport can be more convenient. For example, from our house to NEX shopping centre, it could be both faster and more convenient to take the train.

      At this moment, I do find it difficult to justify having a car, except for extra convenience to the Mrs. It probably has more to do with the ego than anything.

      Indeed, one can’t place a value on the pride and convenience of owning a car. Mathematically-speaking, alternatives will prove to be much more palatable to the wallet as compared to owning a car.

  7. KP

    HI 15HWW,

    thought I’ll share my 2cts worth on how the decision to invest in 1 came about:

    1. Didn’t see the need to buy a resale vehicle until my wife was in her late second trimester as trips to the gynae increased. We were just fine cabbing before that as we live close to the clinic.

    2. did the math and bought a resale which had slightly more than 2 yrs left – you may be surprised to learn that there are still bargain deals out there – if you know what to look for. Here’s 1 source of reference:

    3. End of day, i believe you can’t put a premium on ‘convenience’ as pointed out by some of your readers – esp when the ‘need’ arises

    4. the cost for cabbing / uber isn’t that much cheaper as compared to driving (disclaimer – just comparing the amt u pay for point A to Point B only and the time factor taken to get there, inclusive of ERP.)

    5. it also made a lot of sense for us because all members of my family travel to the same area for work / school, 5 days a week.

    A lot of factors come into play when purchasing such a big ticket item so like investing, it has to be a long term plan.

    Good luck in ur search. Would love to read about your journey on this blog in future.


    1. My 15 HWW Post author

      Hi KP,

      Thanks for dropping by and sharing your own experience of buying a car. And the calculator does looking interesting!

      Actually, I think on most days, uber/cabs should be cheaper. It’s not often one would have to make many trips on a single day. But I guess having a car might mean less planning since one can respond to situations more promptly. I admit this ability does help alot if there is an infant or a pregnant women in the family.

      Yup, I will definitely think through again before making a decision. I am quite sure I will blog about it if I really purchase one.

  8. coconut

    1, if you first time, buy a pre-own car with 1 to 2 years left til coe expired. try it out and if no good can scrap with minmium lost. don’t buy new car unless you sure you want to keep for 10 years. ask dealer for higher loan quantum, they can arrange.

    2, buy new car from agent, don’t buy from PI since you know nuts about cars.

    3, never lease a car, if you want even lower cost, go for car sharing scheme.

    p.s. if you buy old cars make sure you choose reliable one like honda jazz etc, don’t go for the cheap one cos a lot of problems maintainance.

    1. My 15 HWW Post author

      Hi coconut,

      1. I am more and more open to this idea. Buying a brand new car could be too risky for a newbie like me. Hmm, but why would you suggest taking a higher loan quantum?

      3. I guess you meant that leasing will almost always be more expensive than owning a 8-9 year old car, regardless of prevailing COE price.

      And finally, thanks for sharing and giving your opinion! Much valued!

      1. Clueless Punter

        I agree with Coconut, shop around for a 1-2 year one with decent condition and price if it exists. Then you have the option to 1. renew if COE is high, 2. scrap if COE falls to buy a new car, 3. scrap after deciding not to drive

        1. My 15 HWW Post author

          Hi Clueless Punter,

          Thanks for your advice. I am definitely open to a 2nd hand car but it seems the Mrs is not! I will probably hold the purchase for a little longer. Will only act if COE prices falls and the price of a new car fits into our budget.

  9. Clueless Punter


    Having been through the process a few months ago, let me add my 2c

    1. Mostly true. Demand spiked for old cars when Uber entered the market, so if you can afford, the new car makes more sense. However timing your car purchase in Singapore seems to be like trying to time the market. My colleague is lamenting the ‘loss’ of a couple thousand now because she bought during the last Car Show.

    2. Like Jes, I’m guessing you have your eye on the Vezel?
    Parallel importers may offer you ”warranty” but repairs are done at their appointed workshop. If you absolutely need to buy from a PI, look for one that has ready stock and avoid paying a hefty deposit up front.
    Just spend some time to walk around the car malls but before you go, my advice is to surf the local car forums, there are some threads that rate dealers and this will spare you a great deal of trouble since you can avoid them. There are also some that come with better reviews so keep an open mind. Another point is if the salesman is puffing away while talking to you, just save your time and walk away.
    There are also bigger names selling pre-owned cars such as the authorized dealers themselves, you have peace of mind but need to pay a premium.

    3. I did consider that option, as there are not just straight out leasing, but also leasing directly such as CarsClub. But after reading some horror stories I decided to drop the idea. For eg. penalties for returning the car late, or disputes over scratches and dents.