Cost of a car in Singapore which costs Rs. 775,000 here in India – Shockingly Very High at Rs. 7,000,000

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at

Wish you all a Happy Dussehra! Festive season has started here in India and though somewhat muted, usual festival activities are up and running now. People have started shopping for the festival stuffs and winter clothing here in North India.

These days are considered auspicious for various kind of consumer durable purchases also, like TVs, refrigerators, washing machines, furniture, cars etc. I am sure many people in India wait for these festive offers to finalize their buying decisions.

But, due to slowdown and high interest rates, people are trying to postpone their discretionary spending for quite some time now. Auto industry has also suffered one such blow here in India. On one hand, auto manufacturers are raising their product prices to maintain their margins and on the other hand, to attract the customers & beat this slowdown, they are trying different kind of things and showering various offers on the prospective buyers.

But, will you be interested in buying a car if the government today hikes the excise duty or import duty and imposes some kind of additional tax to make its price nearly 5-10 times its current market price? Yes, it is not 5-10%, it is correctly written as 5-10 times.

To be precise, I mean, will you be interested in buying a Honda City for Rs. 65,78,550 against its current on-road price of Rs. 10,58,196 for the same model?

Background to this Post

Last weekend, I, along with a friend of mine, went to Select CityWalk Mall in Saket, New Delhi. We had nothing lined-up in our agenda to shop for but to kill time and to quickly check if anything is there on the shelves for the coming winter season to match our spending budgets. If you are familiar with this area of Delhi, you must be knowing that Select CityWalk has two more malls besides it, one is MGF Metropolitan Mall and the other is DLF Place.

After we got exhausted with Select CityWalk, we decided to quickly roam around MGF Metropolitan Mall which is relatively smaller in size and not fully occupied also. While passing by the Volkswagen showroom, our eyes fell on a stunningly looking black Volkswagen CrossPolo. It is not that we saw Polo for the first time, but this recently launched sporty version of Polo, in the form of CrossPolo, was looking amazingly super hot.

Price of Volkswagen CrossPolo in Delhi

Just to satisfy our curiosity of knowing its price, we asked the sales guy for its price. He handed the price list to us, which was reading its ex-showroom price as Rs. 7,75,000 and the on-road price of Rs. 8,71,875, including RTO/registration charges & Road Tax of Rs. 69,750 and insurance of Rs. 27,125.

Though its looks were simply amazing, we felt it was much overpriced. We discussed with each other that one would rather buy a bigger sedan like Honda City or Hyundai Verna or an entry level SUV like Renault Duster or Ford EcoSport with such a price tag.

After wasting 3-4 hours there, I came back to my place and started checking my regular mails. While deleting my spam mails, a mail from one of the car blogging websites striked me. I decided to visit the site and started to research more about CrossPolo. Then somehow I searched about it on Google and saw a link which had its Singapore price.

I clicked on the link and what I saw was this:

Submodel                 Price          Fuel Economy     Power     Transmission     Detailed Info

1.2 TSI DSG (A)      $138,800       18.1 km/L            105bhp     7-speed(A) DSG      Specs/Features

Note: ‘$’ is Singapore Dollar or SGD here.

As I had an idea about the exchange rate of Singapore dollar vis-a-vis Indian Rupee, I quickly opened the calculator on my desktop and started pressing the keys of my keyboard. I was stunned to see the figure. At Rs. 49.50 to a Singapore dollar, it was Rs. 68,70,600.

I thought I was making some kind of mistake somewhere or I was missing something which should be there in the details of its price. To cross-check, I decided to check it on Volkswagen Singapore website. The price its “Price List” carried was quoted even higher at $1,54,300. So, probably there was nothing which I was missing. At $1,53,300, the price tag in Indian Rupee stands at Rs. 75,88,350.

Break-up of Volkswagen CrossPolo Price

Some other cars with huge price differences

So, why the cars in Singapore are so expensive?

Though the cost of car ownership is shockingly very high in Singapore, it has all the noble reasons behind it. Singapore is a relatively smaller country with a land area of only 710 square km, which is less than half of Delhi’s land area of 1,484 square km and just more than Mumbai’s land area of 603 square km.

It is the policy of the Singapore government to discourage individual car ownership, make its people use public transport to the maximum extent possible and thereby prevent congestion on its limited road space.

The government there does not raise taxes to discourage vehicle buyers, rather it has Vehicle Quota System (VQS) in place, which helps its authorities in controlling the number of cars out there at any point of time. Thereafter, the demand and supply factors determine the price of Certificate of Entitlement (COE) via fortnightly auctions.

Land Transport Authority of Singapore (LTA) has set 0.50% as the annual growth rate of its vehicle population between February 2013 and January 2015. In India, we don’t even have a system of scrapping old cars, how can we think of controlling our vehicle population growth and set a target for the same. Our automobile industry gets disappointed if the import duty or excise duty on vehicles gets raised by the finance ministry.

Some other interesting facts about Singapore Car Market

* Average Life of a car is 10 years – As per the policy of Singapore government, you will be given a Certificate of Entitlement (COE) which remains valid only for 10 years, after which it gets expired and you are not allowed to run your car on its roads. After 10 years, you may choose to de-register your car or get your COE revalidated for another 5 or 10-year period by paying the prevailing Quota Premium.

We buy a Maruti 800 here in India for Rs. 52,500 (on-road price Delhi, 1983), make it run for 25 years and celebrate its Silver Jubilee. That ways the average cost of owning a Maruti 800 works out to be Rs. 2,100 per year. Now, if you buy a Honda City in Singapore at SGD 132,900 with a cap of 10 years running life, your average yearly cost would work out to be Rs. 657,855. I think this is more than what an average urban youth would earn in an entire year here in India.

* Average Interest Rate < 2% – Singapore is a developed country and the risks, which make loans costlier in a country, are in control there. So, the interest rate charged there on a new car loan is below 2% p.a. for 1-5 year tenors. I think it must be more than 12% average here in India.

* Maximum Loan Tenure of 5 Years – Even though the life of a car in Singapore is considered to be 10 years, the maximum tenure you can ask for a loan is 5 years.

* Maximum 60% loan, Rest Down Payment – If you are in Singapore seeking to buy a car, the maximum loan you will be able to get from a car financier is 60% and that too if the Open Market Value (OMV) of the car of your choice is less than SGD 20,000. Rest you will have to manage from your own pocket. For cars with OMV of more than SGD 20,000, the percentage of loan you can avail is even lower at 50% of the price. So, the higher the market value of your car, the lower loan is available at your disposal.

Let’s quickly take an example:

  • Honda City 1.5 AT Price – SGD 132,900 i.e. Rs. 65,78,550
  • Open Market Value (OMV) – SGD 16,120
  • 60% Loan Availed – SGD 79,740 i.e. Rs. 39,47,130
  • Tenure of the Loan – 5 years
  • Interest Rate – 1.88% p.a.
  • EMI works out to be SGD 969 i.e. Rs. 47,966 per month

* Yearly Road Tax – A car owner in Singapore is required to pay road tax on a yearly basis. For the same model of Honda City, it is SGD 684 i.e. Rs. 33,858.

* Petrol costs SGD 2.20 a litre – No, this will not cost you 5-10 times its price here in India, but it is still costly. It is SGD 2.20 a litre i.e. Rs. 108.90. I have taken this price from Caltex Singapore website and Shell Singapore website.

What makes up “Pump Price” there in Singapore? Here is the chart having the break-up of SGD 2.20 a litre. High quality and premium service standards come at a cost. Here in India, we keep playing politics in the name of poverty and providing subsidies to the poor Indians. Unlike India, oil marketing companies (OMCs) in Singapore are allowed to earn reasonable profits.

So, now you must be thinking that it is really very costly to own a car in Singapore and probably the government is crazy there to do that. But, then I think if these crazy policies of the government there have been successful enough to make that country such a beautiful place to live, work and enjoy your holidays, then these policies are perfectly superior to the policies of the Indian government here.

Finally, I am no expert of Singapore car market, so whatever I have mentioned here is just a small research work. So, if you find any major discrepancy in any of the information here, please let me know, I’ll correct it immediately.

20 thoughts on “Cost of a car in Singapore which costs Rs. 775,000 here in India – Shockingly Very High at Rs. 7,000,000”

  1. the public transport system is excellent in spore so there the car is not a must for public. the spore govt makes policies and not stupid policies. u must visit spore to see how a country runs. by the way there are about 15% indians in spore.

    1. Hi, I have been to Singapore once and I think everybody would appreciate the way it is run by the government there. The country is super clean and it feels like you can even sleep there on the road. You’ll find all the corrupt politicians here in India who are always ready to squeeze even the last drop of blood from your body. Policies are just ridiculous here.

  2. Nice to know about this. But I wanted to point out a thing – you haven’t considered the Purchasing Power Parity (PPP) while equating the rupee to SGD. There will always be a difference in the actual prices and we cannot directly multiply by the exchange rate to determine the real value.

  3. Subsidies are still important for poor people in India. Without subsidies, poor people will be sucked further. Remember, the gap is increasing between rich and poor in India. Subsidies are none other than people’s money after all. What’s wrong giving them back. It’s rather better than corruption where people’s money is enjoyed by few.

    1. What is the fraction of subsidies that goes to the end-user? 20% I think is the highest estimate that I have come across. I would rather give to a reliable charity than in taxes to a govt which first of all doesn’t tax politicians and various mafia and secondly usurps 80% of the subsidy. Furthermore, subsidies are used to buy votes. In other words, your argument in theory is great. In practice, its worse than pretty much any other alternative.

    2. You think subsidies, food security bill or land acquisition bill are targeted to benefit poor people of India? If yes, you are grossly wrong. Maximum subsidized cylinders are used by these politicians. I doubt whether they pay any money for any of the facilities they use. It is all politics. What Mamata Banerjee did in Singur did no better to poor people there. People living in cities spend at least Rs. 1,000 to 5,000 for a movie & dinner in one shot. Why give subsidy of Rs. 400-500 on a cylinder they use for 1-2 month(s) ?? Subsidies reduce efficiencies in an economy.

  4. Very odd that despite their high prices there is a craze for expensive cars there. I saw more than one Ferrari a day and a Lamborghini once a week and dozens of Audi daily. Not to forget the Formula One craze.
    Think there is a huge divide coming up in SG where you have the extremely rich and other side labourers/workers also aided by the menace of Gambling. And if you compare the payscales in US to SG, SG pays quite low and booming rentals have shot up cost of living in general. It shows all signs of Plutocracry.
    Yes I do agree they have very good connectivity via public transport.

  5. Hi Ramamurthy,

    One can import but will still have to pay taxes and bid for Certificate of Entitlement, the cost would be more or less the same. People do parallel import but for models which are not available in Singapore but then those car need to undergo testing by SLA authorities for road worthiness, emissions norms, chassis registrations etc. It does take up lot of time and energy to do parallel imports.

    Best Regards

  6. Cant a Singapore resident import cars from out side?what it cost him if he imports the same car from India?
    How is the public transport in Singapore ?As crowded as in India?

  7. Hi Shiv Kukreja,

    I read your posts with interest. You have done a good comparison on the cost of ownership in SG. Since I was a car owner in SG and currently residing in China. Just four points to add to your post

    1> Petrol companies combined with associated cards and loyalty points offer between to 10% to 17% discount on the petrol price. Also there is no petrol theft, I mean if we want 1 litre we get 1 litre.

    2> The cost of ownership goes up more due to ERP (Electronic Road pricing) system, they are charged at various rates to based on time and which road is being used. This is to control the traffic. It is similar to Traffic Congestion Charge in London, in fact they learnt this from Singapore. I will not get into parking charge discussion and the various fines associated.

    3> Price of Diesel is cheaper then petrol but the yearly road tax for Diesel vehicle is very high compared to to Petrol driven cars. This prevent people from buying Diesel cars as the yearly cost would go up. And strict adherence to EURO IV emission standard is adopted. This helps to control pollution.

    4> A new car after 3-5 years has to undergo a compulsory checkup every 2 years by authorised centre. This is rule is there for public safety and of course the car owner safety as well. This also adds to the cost. The checkup cost is around SGD 200/- and if the car fails the test rectification has to be done within stipulate time and bring once again for checkup. Hence car owners will get pre assessment done by the mechanic.

    PS : It would be so good if (2) point can be enforced in India as well; of course before that government does need to vastly improve the infrastructure.

    1. Thanks Mr. Chandrashekhar for sharing your experience here and providing some additional useful info about Singapore system !!

      You know what, I think Indian breed and mentality is totally out of this world. We are totally unique characters. We have good brains & are highly intellectual also but at the same time, we are totally impractical & highly indisciplined. We trust in God, show the world that we are God fearing and then we commit crimes, do rapes and use political links to set ourselves free from punishments.

      My point is – India has everything to be a world superpower, but then we are grossly corrupt and don’t have the will & commitment to improve ourselves. You know what they do in Delhi, they don’t lay roads where it is non-existent. Rather they break roads which are already there in reasonably good condition and relay those roads to show-off that politicians spend money on public infrastructure.

  8. This is quite interesting and I know of a friend who lives in Singapore and one who lived in Amsterdam for a while and there is simply no need to buy cars in these countries and they don’t miss them either.

    The big thing is that public transport is so good that you don’t really feel the need for a car and can have a great life without it.

    1. I have been to Singapore once and I had a good experience with MRT there. No doubt Singapore is quite expensive, but then people earn handsomely there and the government does its job quite professionally.

      Even here in Delhi, one would prefer to commute in Delhi Metro for travelling long distances like Gurgaon or places where it is not easy to park your own vehicle, like Chandni Chowk etc. Thanks to our Metro Man, Mr. Sreedharan, for his great contribution to the City’s transportation system, else Delhi would have become a mess to live by now.

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