Car ownership is expensive in Singapore, with the cost of owning one often surpassing $150,000 as it includes having to pay the Open Market Value (OMV), Additional Registration Fee, Excise Duty and GST, Certificate of Entitlement (COE), road tax, and insurance. This has resulted in a low percentage of car ownership in Singapore. However, there are situations where owning a car proves invaluable, particularly for families with young children or individuals with professions that demand frequent travel. In such cases, a long-term car lease can be a desirable solution. Business travellers who value efficiency and companies that require their employees to commute between different locations daily will also benefit from corporate car leases.
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Car leasing refers to the lease of a vehicle for a specified duration, typically ranging one to five years. A selection of brand-new or used vehicles from various automotive manufacturers are usually offered by numerous car leasing providers in Singapore.
Leasing a car generally entails an all-inclusive arrangement where the monthly lease fee covers all essential aspects—insurance, road tax, maintenance and servicing, and roadside assistance—ensuring hassle-free vehicle maintenance and driving in Singapore. Long-term car lease contracts are excellent options for drivers who are seeking to avoid the burdens of car maintenance, repair, and other administrative work related to road tax and insurance. With the hassle-free experience presented by car leasing’s comprehensive packages, drivers get to reap the benefits of a well-maintained car without attending to all the details themselves, redirecting their time to more important tasks.
One significant advantage of car leasing over car ownership lies in the financial flexibility. Apart from minor security deposits or admin fees, drivers are not expected to make large upfront payments to lease a car. This allows them to preserve their financial freedom for other investment opportunities.
For example, the OMV of a 1.6 Standard (A) Toyota Corolla Altis is $29,232 and the COE payable is $108,051. The total down payment required to own this car is $66,355 based on a maximum loan term of 7 years and an interest rate of 2.78%. However, with a long term car lease, the initial payment would only cost between $1,500 and $5,000 with a refundable deposit and an all-inclusive service.
Taking out a loan to purchase a car can affect your Total Debt Servicing Ratio (TDSR), which is a factor that affects the maximum loan amount you can obtain for a property. Currently, the TDSR threshold for property loans is capped at 55% of the borrower’s monthly income. Should you have an existing debt (e.g. a car loan), then the maximum amount you can loan for a property purchase decreases.
As long term car leases do not require taking out a loan, your TDSR will not be affected, which is great news for buyers who may intend to purchase a new home in the near future.
So, should you lease a car? While this decision ultimately hinges on your specific needs, you’ll love the benefits car leasing presents; never worry about another delayed private-hire ride, say goodbye to lengthy commutes between offices or provide greater comfort to your loved ones today.
Explore myCarriage’s monthly car leasing packages, offering tailored solutions to accommodate all your driving requirements. Enjoy maximum flexibility and a hassle-free experience when you lease with us; benefit from our 24-hour roadside assistance or secure your lease with zero down payment. Lease a car with myCarriage today!
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