Singapore remains the world’s most expensive city to live in for the fifth year running. So it’s not surprising that you need a lot of money and a certain degree of sacrifices to own a car. Yet, the demand for owning a car has not wavered.
You just can’t deny the convenience of having a car, no matter how good the public transport system is here. The freedom to drive to wherever you want, whenever you want is an amazing feeling. The convenience of a car is amplified if you have young children or elderly parents to ferry around.
But at the end of the day, is car ownership in Singapore really worth it? With its expensive costs, troublesome upkeep and maintenance, being tied down by loans (and the list goes on), it’s hard to see the value of buying your own car. There surely are other ways for one to own a car without all the hassle and restrictions.
Here are 5 reasons why you shouldn’t own a car in Singapore!
1. It’s a Depreciating Liability
You would think that when you put in so much money into something, it would help you make some money or at least appreciate in value over time. But that’s not the case for cars, especially in Singapore.
Instead, your car depreciates every single day. And if you don’t know, the average rate of depreciation for a car is roughly $1,000 a month! That’s $12,000 a year and it’s not including the perpetual cost of car ownership.
2. The Unexpected & Never-Ending Costs
In life, expect the unexpected. If you own a car, the unexpected can come in many forms. An accident, a flat tyre, an engine leak… you get the picture.
Facing these unexpected issues usually just means one thing – paying more money!
You also have to worry about maintenance and servicing costs, which can be quite confusing and scary. Even more so for someone who’s not very car savvy. There will always be the fear of getting cheated, paying too much or whether the workshop you’re visiting is trustworthy and reliable.
But that’s not all. There’s also the never-ending costs behind owning a car. The annual insurance premiums, road tax, parking and petrol. Although if you compare these costs with the cost of your car, they’re nowhere close, the cost adds up year on year and makes it quite painful.
All these never-ending and unexpected costs are quite painful and will affect you (and your wallet) even if you’re not using the car. So keep that in mind before you decide to buy your own car.
3. It Affects your Chances of Home Ownership
When you buy a car, more often than not, you’ll need to take up a car loan. In some cases, you might even take a personal loan to help you with the hefty downpayment. Getting a car loan is pretty much the norm when buying a car. But did you know that your car loan will affect your home loan?
This means that if you haven’t bought a home yet, your home loan application will be affected! And that’s because of the Total Debt Servicing Ratio (TDSR) framework that was introduced in 2013. Under this framework, individuals will not be allowed to commit more than 60% of their gross monthly income in repaying loans.
So, if your TDSR threshold is $3,000 and your existing loan obligations (car loan, education loan etc.) add up to $2,000 a month, it means that your monthly repayments for your home loan cannot exceed $1,000. This a huge limitation that will hinder your chances of getting the house of your dreams.
4. The Restrictions of a Car
You wouldn’t think that owning a car has restrictions, right? After all, people own cars because they want the freedom and convenience that it brings about. But, in certain situations, owning a car can be restrictive for you and your wallet.
How? When your needs change, you don’t have the freedom to change your car just like that. You’ll be tied down to the car that you chose because of the loan tenure (usually 5 to 7 years) and the difficulty of selling your car at a desirable price.
Because your choice of car that you’ll buy as a single man and as a father will be really different. You’ll be stuck with a depreciating liability for the course of its COE and trying to sell it will be an even more annoying task.
5. Heavy Cash Output
When you buy a car, one of the most painful things you’ll face is the downpayment. By law, you are required to put down a downpayment of 30% to 40% of the car’s price. So if you’re buying a $100,000 car, you’ll have to put down at least $30,000. That’s a lot of cash and it’s something that not many of us have lying around.
Additionally, parting ways with so much cash at one go is quite careless, especially if you don’t have a war chest in savings. You never know what might happen or when you’ll need the cash. There might be a recession and you could lose your job. Or you might need the money for medical emergencies.
Own a Car Flexibly
We can give you a thousand reasons why you shouldn’t own a car, but that’s probably not going to stop you from owning a car. Most of the time, the convenience and freedom of owning a car is too attractive.
But luckily, there’s now a way for you to own a car without the pain of letting go of your cash, the unexpected and endless costs of car ownership or the worry of the car’s depreciation and with an experience that has no restrictions and doesn’t affect your home loan.
Welcome to the future of car ownership with Singapore’s First Car Subscription service.
You can now own a car with full flexibility and no commitments. There’s no downpayment to worry about, just a 100% refundable deposit to get started. And because you don’t own the car, you don’t have to worry about it affecting your TDSR or about how much it depreciates every year!
You’ll enjoy the freedom to drive with no contract to tie you down. This gives you the power to simply cancel, return or switch cars every month, penalty-free.
Plus, the monthly fees are all-inclusive, covering everything a car owner needs – insurance, road tax, maintenance, 24/7 roadside assistance – and starts from just $1,199 per month. No more additional costs or worrying about maintenance!
It’s an easy and hassle-free experience that has more pros than cons!
For more information, visit https://carro.sg/leasing