New Car Cost in Singapore: ARF, COE, Depreciation and Monthly Instalment Breakdown

The sticker price on a Singapore car is just the beginning. That S$165,000 Toyota Camry you saw on the showroom floor contains layers of government levies, financing costs, and depreciation that most buyers don't fully understand until after the paperwork is signed. This guide breaks down every component of new car costs in Singapore, explains what Budget 2026 changed about depreciation, and shows you how to calculate a realistic monthly cost before committing.

The Components of a New Car Price in Singapore

A new car's on-the-road price in Singapore comprises these elements:

OMV (Open Market Value) — The customs-assessed import value of the car, roughly equivalent to what you'd pay for it in the country of manufacture. For a Toyota Corolla Altis, the OMV is around S$17,000–S$19,000. For a BMW 5 Series, it's S$60,000+.

ARF (Additional Registration Fee) — A government tax calculated as a percentage of OMV, applied in tiers: - First S$20,000 of OMV: 100% ARF - Next S$30,000 of OMV (S$20,001–S$50,000): 140% ARF - OMV above S$50,000: 180% ARF

For a mass-market car with S$18,000 OMV, ARF is S$18,000 (100%). For a luxury car with S$60,000 OMV, ARF is roughly S$78,000 (S$20k × 100% + S$30k × 140% + S$10k × 180% = S$20,000 + S$42,000 + S$18,000).

COE Premium — Added to the car price directly. As of early 2026, this is over S$106,000 for Cat A (mass-market) and around S$105,000 for Cat B (larger/more powerful cars).

VES (Vehicular Emissions Scheme) — A rebate or surcharge based on the car's emissions profile. In 2026, pure EVs receive a VES Band A rebate of S$22,500. Most petrol hybrids have been moved to neutral Band B (no rebate, no surcharge). Highly pollutive cars (Band C3) face a surcharge of S$35,000.

Registration fee — A flat administrative fee of approximately S$220.

Road tax — Paid annually, calculated based on engine capacity (for ICE cars) or power rating (for EVs). Ranges from around S$700/year for a 1.5L petrol car to S$1,500+/year for a high-powered EV.

How to Calculate ARF

The ARF calculation is tiered, so you can't simply multiply OMV by a single percentage:

1. Take the first S$20,000 of OMV → multiply by 100% → S$20,000
2. Take the portion of OMV between S$20,001 and S$50,000 → multiply by 140%
3. Take any OMV above S$50,000 → multiply by 180%
4. Add the three tiers together

Example for S$25,000 OMV car: - S$20,000 × 100% = S$20,000 - S$5,000 × 140% = S$7,000 - Total ARF = S$27,000

The ARF matters beyond the initial purchase cost because PARF rebates — what you get back when you deregister — are calculated as a percentage of the ARF you paid. After Budget 2026, that percentage is much lower for new registrations.

Budget 2026 and the PARF Collapse

This is the most important change for buyers in 2026 and beyond. For cars registered from 13 February 2026, the PARF rebate schedule changed dramatically:

What this means for depreciation: A mass-market car with S$27,000 in ARF used to return S$13,500 at deregistration after 9–10 years. Now it returns S$1,350. The backend value has effectively collapsed.

For a luxury car with S$78,000 ARF, the old system returned S$39,000 at year 9. Under the new rules: S$3,900.

This fundamentally changes the depreciation equation. The formula for annual depreciation is:

(Purchase Price - Scrap Value) ÷ 10 years

Under the old system, scrap value was meaningful — S$15,000–S$40,000 depending on the car. Under the new system, scrap value for post-February 2026 cars is S$2,000–S$5,000 at most (mainly body export value). The full purchase price is essentially written off over 10 years.

Example: Mass-market car bought in 2026 - Purchase price: S$160,000 - Scrap value at year 10: ~S$2,000 (body value only, minimal PARF) - Annual depreciation: (S$160,000 − S$2,000) ÷ 10 = S$15,800/year

The same car under the pre-2026 system might have depreciated S$14,500/year because of the higher backend PARF rebate. The Budget 2026 changes added roughly S$100–S$150/month to the effective depreciation cost.

Monthly Instalment Calculation

MAS regulations cap car loans at 70% of the car value if OMV is S$20,000 or below, and 60% if OMV is above S$20,000. Most cars — including EVs — have OMV above S$20,000, so the typical downpayment is 40%.

Example: S$160,000 car, OMV S$25,000 (above S$20k threshold) - Downpayment (40%): S$64,000 - Loan amount (60%): S$96,000 - Loan tenure: maximum 7 years - Approximate interest rate: 2.78% flat per annum

Car loans in Singapore are priced on a flat rate basis, not a reducing balance. A 2.78% flat rate sounds low but the effective interest rate (EIR) is approximately double — around 5.5%–6%. Banks are required to disclose EIR but the flat rate is prominently advertised.

Monthly instalment formula for a flat-rate loan: - Total interest = Principal × Rate × Years = S$96,000 × 2.78% × 7 = S$18,681 - Total repayment = S$96,000 + S$18,681 = S$114,681 - Monthly instalment = S$114,681 ÷ 84 months = ~S$1,365/month

The Singapore COE Navigator includes a financing calculator that converts flat rate to EIR so you can compare loan offers on equal terms — dealer financing and bank financing use different rate structures that are difficult to compare directly.

True Monthly Cost: Beyond the Instalment

The monthly instalment covers loan repayment only. Your true monthly cost of car ownership includes:

• Loan instalment: S$1,365 (example above)
• Road tax: approximately S$60–S$125/month for a 1.6L petrol car; S$125+/month for a large EV
• Insurance: S$150–S$300/month depending on driver profile, car value, and coverage level
• Petrol or charging: S$150–S$250/month depending on usage
• Parking: S$110/month (HDB season parking) to S$190+/month (CBD)
• ERP: Variable, typically S$30–S$80/month depending on routes and timing
• Maintenance: Budget S$80–S$120/month in a savings reserve for servicing, tyres, and unexpected repairs

Adding these up, the real cost of running a S$160,000 mass-market car is roughly S$2,100–S$2,500/month depending on usage, parking location, and insurance profile. The instalment alone understates this by 35–45%.

Cars Registered Before 2026: A Different Value Proposition

With Budget 2026 slashing PARF rebates for new registrations, cars registered before 13 February 2026 have become relatively more valuable. A 2023 or 2024 registered car carries the old, higher PARF schedule — meaning its deregistration value is significantly higher than an equivalent 2026 car. This has already begun to appear in used car pricing, with pre-2026 cars commanding a premium in the resale market.

If you're comparing a used 2024 car against a new 2026 model, factor in the PARF difference explicitly. The 2024 car may carry S$10,000–S$20,000 more in guaranteed backend value — which is a real cost difference, not just a depreciation accounting exercise.

The Singapore COE Navigator walks through how to value PARF properly when comparing new versus used car options, with worked examples for both the old and new rebate schedules.