SINGAPORE — Not long after getting his driving licence, car enthusiast Mohammad Izzraimy Mohammad Isham made an “impulsive” purchase — a second-hand Honda Civic for around S$28,800.
“I actually love cars since I was young… I didn’t really have any other strong reason to buy it at that time,” said the 29-year-old owner of Basement One, a media and automotive lifestyle company.
But having the car also made it more convenient for him to bring along equipment for meetings and to shooting locations, he added.
However, splashing out on the car purchase was just the first step in his journey to spending a larger chunk of his income on transport.
In his first year as a car owner in 2021, Mr Izzraimy estimated that he could spend up to 60 per cent of his income on car-related costs, due to the high usage linked to his sense of novelty of finally having his own set of wheels.
But he has since cut down his car-related expenses, and now spends about S$400 on petrol a month, as opposed to up to S$1,000 at the start — and makes a few carpooling pick-ups a day to defray some of his costs.
Meanwhile, 35-year-old Romulus told TODAY that while he personally prefers to be driven around as a passenger in a private-hire vehicle (PHV), he decided to buy a three-year-old Mazda 6 sedan recently.
“I ‘die die’ also must buy a car, because I’m going to be a father soon,” said Romulus, using the Singlish describing the lack of alternative choices.
The logistics professional, who declined to give his full name, said he saw the purchase as necessary to bring his wife and future child around in a more comfortable and convenient manner.
“In public transport, people hardly gave up their seats to my wife,” he said, adding that car-sharing services — which he had used before her pregnancy — fell short in terms of reliability.
“If not for the baby, I think I really have no reason to own a car because taking a PHV is a lot cheaper and I can take the journey-time to sleep.”
Mr Romulus and Mr Izzraimy are among those in Singapore who, for various reasons, decide to own cars despite the increasingly prohibitive costs of having one.
Meanwhile, Mr Kuanyu Tan, country head for Singapore at online car marketplace Carro, said: “Despite the rising cost of car ownership, about 60 per cent of our customer base are first-time buyers.”
He added: “We’re seeing demand on the rise. We sold over 3,000 cars in Singapore during our financial year 2023 (April 2022 till March 2023) and are on track to see numbers grow for financial year 2024.”
However, some industry players observed that the demand may not be even across all customers.
Mr Amos Wong, general manager of Autolink Holdings, said that prices of second-hand cars are also rising as existing car owners know that a new car of similar model now can fetch a much higher price than when they bought it a few years ago.
“So the more price conscious buyers looking for smaller, ‘bread and butter’ type of cars are slowly being priced out,” said Mr Wong.
Based on TODAY’s interviews, some common reasons for buying a car are:
Necessity for family and work
Like Romulus, it was fatherhood that prompted Calvin the financial adviser to have his own car.
“Sometimes if around midnight you suddenly find yourself needing to rush to hospital because your kids are sick, you won’t want to be waiting for a cab or going around finding a car-sharing vehicle,” he said.
Earlier this year, he had to rush his younger daughter to KK Children and Women’s Hospital at 1am when she ran a 40°C fever.
Having the assurance of his own car was worth the premium that he had to fork out for, Calvin said.
For Mr Amirul Azam, director of photography at media company Blissful Studios, he initially relied on rented cars to bring his equipment around for shoots.
But as his business recovered after the Covid-19 pandemic, it made more sense to buy his own car, he said, which he did sometime in April 2022.
“Renting a car with a similar usage pattern, just rental costs alone would reach around S$2,000 (a month),” said the 33-year-old.
“If I were to take taxis or PHVs, it would amount to around S$1,300, though I would be at the mercy of the car availability, or lack thereof.”
Comfort and convenience
Mr Syahiran told TODAY that he managed to get by for about a year with just public transport when he had his first child.
He decided to get a car a year ago as he had switched to a new job that offered more income, and at the same time his wife was expecting their second child.
Yet, he opined that a car is not strictly necessary to lead a family life.
“I mean, at the end of the day, some people grew up without cars, even with three, four children. So it’s not impossible — (it is) just what kind of comfort level we want,” said Mr Syahiran, who recently switched jobs again and is now a financial advisor.
Similarly, Mr Ben Tan the project manager, who lives in Pasir Ris, uses his car mainly to travel for work and for leisure sports activity.
“It’s definitely something you can do without, it’s just more convenient,” he said.
Passion and Image
Associate Professor Nitin Pangarkar from the National University of Singapore Business School said that one cannot discount the “face” factor behind some Singaporeans wanting to own a car.
Such was the case for entrepreneur Aaron Rylan Keder, 35, who earlier this year bought a used Lamborghini Aventador Superveloce, a limited edition supercar, which he paid in excess of S$1 million for.
He said that when one goes for a business meeting, chances are the other party would have already done a background check on the person.
“With me buying or owning a supercar, it gives a sense of trust, sense of accomplishment to this individual, way before he meets me in person,” said Mr Aaron, who has businesses in finance advisory, renovation and property facilities management.
He said that owning certain cars also gives one membership to some enthusiast groups and exclusive clubs, which provides invaluable business networking opportunities.
Mr Chan from Sgcarmart noted that the luxury car segment has seen “the most notable growth” over the last 10 years.
“This is especially true in this current high-COE climate. The luxury segment is typically less price-sensitive when it comes to COE changes,” he added.
Assoc Prof Theseira said that the aspirational factor behind wanting to own cars has remained important to some buyers.
“The fact is that luxury car brands in Singapore continue to do well, even though today, mass market brands often have similar levels of safety, equipment, quality, and features,” he said.
Industry players such as Mr Tang of Yong Lee Seng also said that they have seen some users turn to lease-to-own arrangements.
This is done with some dealers offering to sell back a car to its customer after a lease period, sometimes at a preferential rate.
One perceived advantage is that such schemes offer the driver a quasi form of car ownership minus the hefty down payment.
Another perk for consumers, according to the websites of some of the car dealers offering such arrangements, is that the amount paid through lease-to-own arrangements does not count towards an individual’s total debt servicing ratio, a threshold of a borrower’s monthly income set by MAS to encourage prudent borrowing.
TODAY understands that lease-to-own financing arrangements are not subject to motor vehicle financing rules as they are more akin to car rental.
As such lease-to-own arrangements are unregulated, the terms and conditions will be different across companies.
Buyers should therefore be cautious of any arrangements which purport to confer ownership of a car with no down payment or provide a 100 per cent loan when in effect consumers are merely leasing it.
They should also be clear about what the transaction and lease entail, such as the requirement to make repairs to the vehicle which may mean higher costs for the lessees.
THE ROAD AHEAD
As the Government continues its push for a car-lite society in land-scarce Singapore, it is inevitable that many would not be able to fulfil their dreams of owning a car, some experts noted.
Dr Tan Ern Ser, an associate professor of sociology from the National University of Singapore, said that such unfulfilled aspirations might be a cause for concern.
“But Singaporeans are also pragmatic people who could make the adjustments, especially if our public transport system has last-km convenience,” he said, referring to the distance between one’s residence and public transport.
Agreeing, Asst Prof Fan of SMU noted how Singapore has build up many new residential areas in recent years, which may not yet be well-linked to public transport nodes.
Improving such connectivity could go a long way in improving travelling experience and disincentivise residents there from turning to private cars, he said.
Mr Loo of CarTimes said that at the end of the day, cars are not strictly necessities for most people.
“Whoever can afford the luxury to pay for convenience and time saved, they will continue buying cars,” he said.
While Assoc Prof Pangarkar also noted that not owning a car may lead to some frustrations, he added: “This is not that big (a) frustration. I think if (more basic things) like Housing and Development Board flats or public transport become unavailable, that would be a bigger problem.”
He added that even if not everyone can afford a car in the future, “so be it”, as the revenue collected from COEs by those who are willing and able to pay for them would eventually be chanelled back to fund public goods for the wider community.
Assoc Prof Theseira of SUSS said that there are still tweaks that can be made to usher the society towards a more car-lite direction — including continuously improving the user experience of other modes of transportation, and even tweaking the way we lead our lives to involve less commuting.
“But ultimately, you cannot tell people that it’s better to go car-lite; they have to find that it is genuinely so, because they get the travel they need done more cheaply and conveniently without a car,” he said.