Mario Lee Blog

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In Singapore, a car is not an everyday object but an extremely expensive privilege. Talking to locals, I came to understand why you see almost nothing but new cars on the roads – and why the system is so radical.

1. The COE: Your licence to drive

You don’t simply buy a car – first you have to bid for a COE (Certificate of Entitlement). This certificate gives you the right to own a vehicle for exactly 10 years.

• Extreme costs: In February 2026, this right alone cost around S$105,000 to S$111,000 for a car – that is about €73,000 to €77,000. And you haven’t even paid for the car itself yet.

• The 10-year trap: After 10 years the COE expires. Then you have to renew it at the current average price – or scrap the car or sell it abroad.

2. Why many people change cars early – and what changed in 2026

When you buy a car, you pay a high registration tax, the ARF (Additional Registration Fee). If you deregister your car early, you get part of it back (the PARF rebate) plus the remaining value of the COE. Until now, for cars up to 5 years old this was a full 75% of the ARF (up to S$60,000). That is why many Singaporeans swapped their car for a new one after about 5 years.

New since 2026: In Budget 2026 the government cut the rebate sharply. For cars registered from the second COE round in February 2026 onwards, you only get back up to 30% (up to S$30,000). So changing cars early will be much less worthwhile in future. Older cars keep the old rules.

3. The stark contrast: Getting there efficiently and cheaply

While cars are unaffordable, Singapore makes it easy for people to switch to buses and trains.

• Cheap fares: A trip on the MRT (metro) or bus costs about S$1.28 to S$2.57 with a card (approx. €0.90 to €1.80), depending on distance.

• Excellent connections: Even remote places like the zoo are easy to reach on lines such as bus 138 for one or two dollars.

• Inclusion and everyday life: For many people, especially people with disabilities, this cheap public transport is the most important way to take part in society, because owning a vehicle is financially completely out of reach. With a concession card for persons with disabilities, a trip costs only about S$0.69 to S$1.07.

My conclusion

Singapore’s system practically forces people to share public space. It is fascinating to see a VW Golf costing around S$198,000 (approx. €137,000, list price including COE) driving next to a bus in which you get to your destination almost as quickly for about S$2.