Tired of the peak hour crowds in public buses and trains? Amazed at how all taxi drivers turn into Houdinis when you really need them? Car ownership is still an achievable dream in Singapore, if you wouldn’t mind used cars and be mindful about your costs. Let us attempt to work out how much you will need to pay every month to achieve your dream of owning a car.

Let’s take one of the popular car model in Singapore as an example, a Honda Fit 1.3A G is a robust car that is exceptionally fuel efficient. This car is listed in Carro.sg. It’s listed price is at $37,000.

To ensure you will have the lowest down payment, you would want to qualify for the maximum loan in terms of the largest loan amount for the longest loan period. This means your car’s applicable pro-rated Open Market Value (OMV) needs to be lesser than $20,000 (in order to qualify for a loan of 70% of the car price). The pro-rated OMV decreases according to the age of the car, for this car, the OMV is listed at $13,819.

What is the income requirement for the loan when you are buying a used car in Singapore?

To better the probability of your car loan approval, your monthly installment should not exceed 1/3 of your monthly salary. To get the maximum possible loan of 70% of the car price, you should go for the maximum loan period of 7 years. The maximum loan period is dependent of the months left on the COE, capped at 7 years.

This car is listed at $37,000, the maximum loan you can get is $25,900. DBS Bank is offering an interest rate of 2.28% (check with our car heroes about this now!). This car has only 38 months left, (though you can take a loan amount of up to 7 years), that means a monthly instalment of $731. To qualify for the loan for this car, you will need a monthly income of at least $2,200.

But that’s not the end of it.

Monthly expenditure: $731

What is the down payment required when you are buying a used car in Singapore?

The minimum down payment of a car depends on the difference between the car’s listed price and it’s loan amount. The OMV amount is $13,819, your loan amount is 70% of the car price. That means your down payment is 30% of the car price ($11,100). You will have to pay an additional $11 transfer fee to LTA.

You will usually have to pay your 1st month instalment upon making your initial payment, but with DBS direct loan, you will be able to defer this payment but GIRO is required.

This is excluding insurance.

Amount to be paid upfront: $11,111 

What is the insurance amount required when you are buying a used car in Singapore?

In accordance to the law in Singapore, it is mandatory to have a comprehensive coverage for your motor insurance if you are looking to take a car loan. There are 3 tiers of insurance, 3rd party, 3rd party fire & theft, and comprehensive policies. The cost of your car insurance will depend on your profile and the make & model of the car you are buying. For profile, the age, gender, occupation (indoor/outdoor), driving experience and previous claims matters.

Let’s say you are 28 years old, female driver working in an indoor environment with 4 years of driving experience, your insurance will cost at least $1,400 at 40% No Claim Discount (NCD). Make sure the car is covered by your insurer before your take over.

Amount to be paid upfront: $1,400