If you are a parent in Singapore, you probably heard this line before.
“As long as car instalment under $1,000 or $1,200 can already.”
Sounds okay, right.
Feels quite “normal family life” also.
School runs, enrichment classes, bringing kids to grandparents’ place, weekend outings to shopping malls or East Coast.
All these feel very “worth it”.
But when you really sit down and count everything, the number can be quite scary.
In places like Bangkok or KL, a normal family car can cost maybe a few hundred dollars a month.
Over here, our cars sometimes feel like a second housing loan.
Thanks to COE, taxes, and all the extra things that quietly add up, “car cost Singapore 2025” is on a whole different level.
Most of us only see the obvious two.
The monthly instalment and the petrol.
Then we blur blur forget about the rest.
Depreciation, interest, insurance, road tax, parking, ERP, servicing, repairs, grooming.
All the small line items that quietly eat our bank account.
By the end of this post, you will have a very simple way to calculate your true monthly car cost.
No need to be finance expert.
Just basic plus and minus.
You will also see how even saving $200–$300 a month can mean one extra trip for the kids, or more money into their savings.
If you like travel content, this is the same money that can go into your next family trip, like how we stretched our budget for Korea here: The Shocking Truth About Traveling with Kids in Jeju, Busan and Seoul (And How We Survived!)
Let us break it down in a very simple, parent-friendly way.
The Real Cost of a “Family Car” in Singapore (Not Just the Instalment)
Most parents I talk to use this rule.
“As long as monthly instalment is below $1,200, can manage.”
The problem.
The bank instalment is just one part of the whole car cost.
It is like only looking at the rice in your chicken rice and forgetting you still have to pay for the chicken, the egg, the soup, and the extra chilli.
What is COE in Parent Language
COE is like a very expensive “ticket” that allows you to use a car in Singapore for 10 years.
You are not buying a car.
You are buying a right to use a car.
If your family car costs $160,000 -$180,000 for a normal 1.6L car with COE, that is quite standard now.
You can use it for 10 years.
After 10 years, you must either renew COE and pay more, or scrap it.
That $160,000 - $180,000 is slowly disappearing over 10 years.
This disappearing is called depreciation.
If you are also considering EVs, this part becomes even more interesting, because EV resale value works a bit differently from normal petrol cars. You can read more here. EV Car Part 3. Understanding EV Resale Value in Singapore
How Depreciation Works (Super Simple)
Let us say your numbers look like this.
Car price with COE is $160,000.
You use the car for 10 years.
At the end, maybe you get back $20,000 scrap value
Scrap Value is taking the Parf value divide by 2
So total lost over 10 years is $160,000 minus $20,000 equals $140,000.
Now divide by 10 years.
$140,000 divided by 10 equals $14,000 per year.
Divide by 12 months.
$14,000 divided by 12 is about $1,167 per month.
That means even if you already fully paid your car loan, your car is still costing you more than $1,100 every month just by sitting there and getting older.
Hidden Costs Parents Often Forget
On top of instalment and depreciation, you still have a whole buffet of other expenses.
Insurance.
Road tax.
Season parking at your HDB.
Season parking at workplace if your company does not fully cover.
Mall parking for weekend family outings.
School parking or waiting areas.
ERP for school runs or going into town.
Servicing every 6 months.
Tyres every 2–3 years.
Battery, aircon repair, small parts.
Car wash and grooming because the kids drop biscuit crumbs everywhere.
Each one maybe $50 here, $100 there.
But when you add up, it can easily become $500–$800 extra every month.
Why This Matters for Parents
Every $200–$500 that disappears into the car is money that is not going into the kids.
It is not going into enrichment or tuition.
It is not going into family travel.
It is not going into emergency fund, insurance protection, or long-term savings for your kids.
So you think, “Our car costs us about $1,000 a month only.”
But when you add everything properly, it might actually be $1,800–$2,200.
That is the real car ownership cost Singapore parents are facing now.
If we do not see the full picture, it is very hard to make good decisions for our family.
Singapore Savings. Do the Math, Then Trim the Fat
Think of this as a simple checklist.
You can even put it into a Google Sheet.
Step 1. List Your Monthly Loan Instalment and Interest
For most of us, the bank instalment already includes the interest.
Just write that number down.
Example.
Loan instalment is $950 per month.
Step 2. Add Depreciation per Month
Using the same $160,000 car example.
Car price with COE is $160,000.
Scrap value is $20,000.
Total depreciation is $140,000 over 10 years.
Depreciation per month is about $1,167.
Write this down.
Step 3. Add Insurance and Road Tax per Month
Let us say your numbers look like this.
Insurance is $1,600 a year.
Road tax is $800 a year.
Total is $2,400 a year.
Divide by 12 and you get $200 per month.
Step 4. Add Petrol, Parking, ERP
Estimate your average.
Petrol is $250 per month.
Parking at HDB, work, malls, school is $150 per month.
ERP is $80 per month.
Total is $480 per month.
Step 5. Add Servicing and Repairs
Maybe you spend $1,200 a year on normal servicing and occasional repairs.
Tyres every 2 years cost $800, which is about $400 a year.
Total yearly is $1,600.
Divide by 12 and you get about $133 per month.
Now Add Everything Together
Instalment is $950.
Depreciation is $1,167.
Insurance and road tax is $200.
Petrol, parking, ERP is $480.
Servicing and repairs is $133.
Total is $2,930 per month.
Even if your numbers are lower, you can see how a “$1,000 instalment” can quickly look more like $1,800–$2,500 when you do the full math.
How to Trim the Fat (Realistic Ways)
Once you see your real number, do not panic.
Just ask, “Where can I cut a bit without suffering too much.”
Some ideas.
Switch petrol brand and credit card combo.
Use a card that gives good cashback or points for petrol.
Even just saving $20–$40 a month is still money.
Reduce unnecessary trips.
Plan routes, group errands together, share school runs with neighbours when possible.
Avoid heavy ERP times.
Leave home earlier or later if you have flexibility.
Sometimes 10–15 minutes difference can save a few dollars.
Service smart.
Do regular basic servicing to avoid big breakdowns.
Small money now can save big money later.
If you are already thinking of changing car, consider whether an EV or hybrid might help you save on fuel, but remember to factor in resale value and COE also. You can read this guide before committing to an EV. Understanding EV Resale Value in Singapore
Bigger moves if needed.
For some families, it might make sense to downgrade to a smaller, more fuel-efficient car.
Or choose a cheaper model.
Or go car-lite.
From 2 cars to 1 car, or from 1 car to only occasional car-sharing and taxi.
If you manage to trim even $300 a month, that is $300 times 12 equals $3,600 a year.
That is almost one family trip to Japan or Korea with kids, if you plan carefully and hunt for deals.
3.3 Step-by-Step. What Parents Can Do This Week
You do not need to fix everything in one day.
Just start with small steps.
Step 1. Audit Your Car Cost
Sit down one evening with your partner after the kids sleep.
Open a simple Google Sheet.
List these items.
Monthly instalment.
Estimated depreciation per month.
Insurance per year divided by 12.
Road tax per year divided by 12.
Petrol per month.
Parking per month.
ERP per month.
Servicing, repairs, tyres per year divided by 12.
Add all these up.
This is your true monthly car cost.
You can create your own sheet, or set one up similar to a “2025 SG Family Car Cost and Savings Checklist”.
The idea is the same.
One page, all the numbers in front of you.
Step 2. Cut the Low-Hanging Fruit
Once you see the total, ask.
“Which 2–3 items can we lower first.”
Some easy ones.
Change petrol station or credit card to get better discounts.
Plan weekly routes to reduce “just drive for fun” trips.
Avoid ERP-heavy roads when possible.
Use HDB and cheaper parking options instead of expensive mall parking.
Do regular basic servicing at a trusted workshop to avoid big repair bills.
Even saving $50 here, $30 there, $20 there already adds up.
Step 3. Decide. Keep, Downgrade or Go Car-Lite
After a month or two, when you see how much your car is really costing you, have a honest talk.
Keep the car if it is still affordable and really helps your family a lot.
But keep working on small savings.
Downgrade if your car is very atas and the monthly cost is very high.
Maybe consider a smaller, cheaper, or used car.
Lower loan, lower road tax, lower insurance, lower petrol.
Go car-lite or no car if your situation allows.
Some families live near MRT or have flexible work hours and can pull this off.
Use MRT, bus, and maybe car-sharing or taxi when really needed.
Remember, we even have ways to save on public transport for kids, like free bus and MRT travel for Primary 1 kids. You can read more here. How to Get Free Bus and MRT Travel For Your Primary 1 Kid
No right or wrong answer.
Just what works best for your family.
Step 4. Reassign the Savings
This part is very important.
If you manage to save $100, $200, or $500 a month from your car cost, do not let the money just disappear into random spending.
Set a standing instruction.
A portion into kids’ savings or investment account.
A portion into emergency fund.
A portion into “family fun” holiday fund, outings, special treats.
That way, every dollar you pull away from the car is clearly going towards your kids’ future or your family’s happiness.
You can literally see, “We gave up this extra cost in the car, and now we have this extra memory or this extra safety.”
Your Car vs Your Kids’ Future. Make the Numbers Work for You
Most of us start by asking, “Can we afford the monthly instalment.”
But the better question is, “Is this total car cost worth it for our family priorities.”
When you add COE, depreciation, insurance, petrol, parking, ERP, and repairs, your “$1,000 a month” car can easily become $2,000 plus. For $2,000 a month it works out to be $66 daily for your transport cost. If that day you take bus/mrt, you would already save $60!
That is money that could be growing for your kids, or paying for trips, or building a strong safety net.
If you are thinking of changing car, especially to an EV, read this first so you understand how the resale and depreciation might work out for you. Part 3. EV Car. Understanding EV Resale Value in Singapore
If you want to go one step further, create your own “2025 SG Family Car Cost and Savings Checklist” in Google Sheets.
Key in your numbers, see your true monthly car cost, and spot quick-win savings you can make this month.
Share this with other parents who are also wondering why their bank account keeps feeling tight even though “everything is under control”.