Fancy a $109,000 Toyota Camry?

As a Canadian school teacher living in Singapore, I have to admit that there are loads of perks.

My income taxes, for instance, are a heck of a lot lower.  I can invest money—buying the same products my Canadian and American-based friends buy—but I don’t have to pay capital gains taxes.  I can also travel to exotic locales far more cheaply, and the weather over here (especially now) is infinitely nicer than it is in Canada.

That said, what are the drawbacks?

I’ll make a bold statement here, and suggest that most of my teaching colleagues (despite having amazing experiences overseas) will have far fewer financial resources when they retire than they would have if they had stayed in North America.  Despite paying lower taxes and earning higher incomes in Singapore, they won’t be blessed with a teacher’s pension when they retire.

What’s more, they might even have less money in the bank (or in their investments) when reaching their golden years.

The reason is that most expatriates live the high life: a life they can’t afford.  They don’t adjust their living standards to account for missing pensions, and many of them don’t realize that the clock ticks—and that they’ll need to live off the money they’ve saved.

Expenses that few Canadians would ever dream possible

My neighbor is an automobile broker.  When she got in the elevator today, I asked how business was.  “Not great right now,” she replied.  “The COE costs went up again.  A new Toyota Camry now costs $140,000.”  Based on the exchange rate, that’s roughly $108,000 Canadian/US.

Searching for deals online, I found a 10 month old Camry for $109,000 Singapore dollars, or $85,000 Canadian/US.  … read more

That’s not chump change.  And if you bought, say, a new Camry today, you could only drive it for 10 years.  After that, you’d have to pay the government an additional tax to keep the car on the road.  And we’re not talking about a paltry sum.  According to my neighbor, the current CEO tax on a new car with 1,600cc or above, is more than $60,000.  A quick look online, and I found that she’s right.  …read more

When you buy a car in Singapore, the price includes the cost of the COE (certificate of entitlement).  It varies constantly, but the fact that you have to renew it after a decade encourages people to buy new cars, rather than keeping older ones on the road.

How do expatriates deal with this?

Many of them, from what I’ve seen, buy the same sorts of cars they would have bought at home.  A friend of mine recently paid $160,000 for a minivan ($124,000 Canadian).

What I found interesting, also, was that local dealers tell you what the expected level of depreciation is going to be.  Take that second hand Camry for $109,000 Singapore dollars ($85,000 Canadian).  They list the depreciation at more than $10,400 per year.  … read more

Car prices in Singapore are a lot like Singapore rentals for condominiums.  They can change in a heartbeat.

Currently, both rentals and cars are expensive.

So it pays for expatriates to use a degree of conservatism.

What do you think?  If you lived here, would you buy a car costing three times the price you’d pay at home, even if you were making 50% to 75% more money?  And if you do live here, let me know what I’m missing.





Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I’m happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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16 Responses

  1. Hey Andrew,

    I need to ask if owning a car is a luxury or a requirement before answering. When I lived in Japan, I did not need a car and I found that the material want versus need became quite different …

    I think I would commute if I could but that's just from hearing the price. How much is the gas and insurance? What about parking?

    Cheers!

  2. 101 Centavos says:

    Andrew, that's a chunk of change, no doubt. If you can get by without a car using public transportation and the occasional rental, that would be the way to go. If you say that people prefer to buy new cars, then the market for your 10 yr old car is going to be soft, yes?

  3. A $109,000 Toyota Camry? What a deal…. for the seller. Think I'd find another mode of transportation….. bike, motorcycle, or by foot.

  4. Isn't Singapore really small anyways? Why not just use a bike and go carfree? I certainly would at those prices unless I was making a really bling income, and I don't mean just to compensate for the higher costs of driving.

  5. Jean says:

    @PassiveIncomeEarner,

    I've been here almost twelve years, and I've never owned a car in Singapore – mainly because I do view it as a "luxury" item when considering the cost. My husband and I depend on public transportation, which is great here (almost as good as Japan), and the occasional ride share offered by friends. I carpool to work via taxi and use the bus and MRT when I can.

    Just back from Australia and seeing how much 'cheaper' cars are there (like in the US), it reminded me of why I don't own a car in Singapore.

  6. Jim says:

    Hi all,
    I have lived in Singapore for 15 years and have seen the market go up and down. Any way you slice it owning a car is a losing money venture! (at least for individuals. The SG government is making literally billions off the COE, additional registration taxes, road tax, car park fees, ERP, etc). Owning a vehicle for expats is about convenience and a bit of status. After not having a car for the first six years I bought the only now registered electric vehicle. That process is a whole other story! I realized that not being able to get myself from point a to point b when I wanted was a source of frustration. Yes taxis are readily available but waiting for a taxi in the rain with groceries is nearly enough to push one over the edge. Adding kids to the equation also changes things from convenience and safety standpoint. Still doesn't change the fact it is a very bad finical deal. The key is to buy used with 1-2 years left on COE. Singaporeans dislike old or used. Most used vehicles here are in very good shape even at 8 years.
    Back to the car taxes… My vehicle was US$12k or approximate S$22k at time. The additional registration fee was 140% or 28k. The COE at time was 31k or 60k tax on a 22k car!! In addition to the yearly road tax a d things I mentioned above. Most people don't want to add up the total cost or really know how much they are paying because they know they are pissing away their money!! All about the convenience. Speaking of that, my daugnhters Chinese class is over. Time to drive her home in my wife's car!
    JD

  7. @The Passive Income Earner

    Hey Passive,

    I think parking is pretty expensive. Americans would see gas prices as steep, but they're roughly in line with Canadian gas prices. It looks like Jim has answered the question about taxes far more adequately than I could. I've pasted part of his comment here:

    "Back to the car taxes… My vehicle was US$12k or approximate S$22k at time. The additional registration fee was 140% or 28k. The COE at time was 31k or 60k tax on a 22k car!! In addition to the yearly road tax a d things I mentioned above. Most people don’t want to add up the total cost or really know how much they are paying because they know they are pissing away their money!!"

    Thanks Jim!

  8. @101 Centavos

    Centavos,

    I think you're right. Most people prefer new cars over here, so any way you slice it, buying a car here is a raw financial deal. That said, my wife couldn't do without one. When she wants to go somewhere, she prefers that she was there "yesterday"

  9. @The Biz of Life

    Hey Biz,

    Many people do without a car. It makes sense, doesn't it?

  10. @Invest It Wisely

    Hey Kevin,

    The only problem with using a bike is that you sweat so much unlocking it and throwing your leg over the crossbar. The heat over here is a serious impediment.

  11. Hey Jean,

    Isn't it amazing that you can (and you'll see how cheap I am here!) pick up a car for a few thousand bucks in Australia or North America?

  12. @Jim

    Hey Jim,

    Thanks for the comment! I know that you're really really busy, but if you would ever like to tell the story of your electric car in Singapore (from a financial perspective) my reader friends would love it!

  13. Davo says:

    @Jim & Andrew,

    Interesting article on the front page of Thursday Jan 6 2011 "Today" newspaper…

    COE premiums soften in year's first bidding.

    There was respite for prospective car buyers yesterday, as Certificate of Entitlement (COE) premiums softened in four out of five categories in the first bidding exercise of the year.

    What was omitted from the online article was the bidding results table. which I have included below:

    Car (1600cc & below; taxi) … $38,889 (decrease… $7,240)

    Car (Above 1600cc) ………….. $69,000 (decrease… $3,001)

    Goods Vehicle & Bus …………. $35,111 (increase…. $1,160)

    Motorcycle ……………………….. $ 1,503 (decrease… $48)

    Open ………………………………. $75,789 (decrease… $313)

    I had a car in Australia all my adult life and while I travelled by public transport as a student, rarely (never??) took the bus or the train after I got my driver's license.

    Since living in Singapore I nearly always take the bus or train. Clean, fast and efficient — trains arrive every 5 minutes or so — buses come every 10 to 15 minutes (my only complaint that where I catch the bus is just after a curve and occasionally the bus goes whistling past before I get the chance to signal it 🙂

    The train or bus costs me around $1.20 – $1.50 a ride; the electronic ticket is scanned on and off — I only pay for what I use. I can recharge it at train stations and 7/11s

    If I'm in a hurry, or I'm not sure where I'm headed, cabs are cheap and easily got (unless it's raining or peak period or change of shift). I save the $2.50 phone booking charge by walking out to the street corner. Within 5 minutes an empty car will come by. It's about a $12 to the city if it’s a clear run without traffic. If you have 4 in the car it's effectively double what you'd pay on a train or bus – more or less…

    The only complaint I have about the cabs is the complicated loadings they have in peak period and later in the evenings, where the cab fare can increase by about 33%.

    However if, like Jim, I had a kid I had to ferry them around a car would definitely be convenient, but I'm not sure if it would be cost effective, even a little one under 1600cc.

    And I agree with Jim, and applies anywhere not just Singapore: buy a car that’s around 1-2 years old when the depreciation has leveled out — what's great about modern cars is sometimes, they are still under warranty.

    So Jim, with an electric car, how did they arrive at the COE you had to pay? Singapore would be the perfect place for an electric car!

    Can you tell the story in brief? I'd love to hear how they categorized it!

    I'll bet that would have been 'interesting' exercise in Singapore, given the bureaucracy generally races forward in a highly efficient manner — but comes to a grinding halt when the beauracrat need to check a box that doesn't exist on their form!

    (And they don't yet appear to have made allowance yet for hybrids or electric vehicles – but I could be wrong.)

  14. Yeah, why would you need a car in Singapore? Isn't the transit system pretty good there? That is EXPENSIVE. I didn't know they were so costly overseas.

    What about importing a Tata (Indian car) over to Singapore? That's the world's cheapest car, if I recall, at $5000 for a car 🙂

  15. Jim says:

    Okay Davo.. you are suckering me into telling this story aren't you? 🙂 This is the amazingly abbreviated version. It is much better in person with adult amber beverages!

    After living in Singapore a couple years I thought 'Why isn't there any alternative or electric vehicles here in Singapore? What a perfect place!' That was in July 2000. I surfed around and discovered a three wheeled electric vehicle that registered and insured as a motorcycle in the USA. I thought "This is absolutely perfect!! Import this vehicle to Singapore and get around the incredibly expensive COE for cars.' Great thought. I actually ended up investing 50k in preferred shares of the company first. More research and a preliminary proposal to the SG LTA to see if I could register as a motorcycle (which it is). The engineers at LTA gave me the typical 'Cannot Lah' type response. The electric vehicle company VP said this is typical for things out of the ordinary and the same thing happened with Transport Canada. He advised buying one and shipping to Singapore. After all, seeing is believing right? I agreed. Seeing that it was a freeway legal vehicle was necessary because it does look like a toy in pictures. It was only US$12k, the US stock market had not fallen off the cliff yet, I still felt reasonably 'wealthy' at that time. Why not right? If it doesn't work I ship it back to the USA. I argued with the government (all the way up and down the chain of command) until I got a letter from the Ministry of Transport saying that even though this vehicle could fit the description of a motorcycle in the SG road traffic act, it was a 'policy decision' not to allow it to be registered as a motorcycle. They did however say it could be registered as a car provided it had all the proper testing, etc. So.. it took me another year to accumulate all the important data on major components into a huge black binder. It was like fitting the square peg into the round hole as my electric motorycle didn't fit the blanks on many forms. Motorcycles don't have crash test results! Electric vehicles have motors not engines. Electric motors don't have pollution coming out of their tail pipes therefore no emissions data. One thing after another. It would have been laughable had it not been me taking hundrends of hours to track down BS stuff these guys couldn't explain. I think they thought I would give up. This dumb ang moh didn't give up. One small example was the speedometer. The original was in KPH and MPH. After saying yes they then said 'No'. It took me nearly three months to find an electronic speedo from Stewart Warner in KPH! Even the manufacturer didn't have any. A lady found one for me at a truck stop in San Jose California! After creating the four inch thick binder of all the essential parts, specs, etc. I finally got an interview. I sat across from about five or six LTA engineers and went through this binder page by page. Again, laughable had it not been me. I did lots of knodding of my head, sat on the edge of the chair, pencilled down notes creating an 'eager to please' situation. So long as you don't make people here lose face you can get what you want. I have chronicled this whole decade worth of experiences in pictures. I was finally able to register the vehicle after about 2 plus years. The next problem came trying to get insurance! The next problem came trying to pay for the COE, ARF taxes. I already owned the vehicle. No bank will finance the tax on the vehicle. I ended up having to get a third party leasing company to purchase the COE, pay the ARF taxes and make a loan to me for the $62k in taxes I owed.. weird, I owned the vehicle and financed the taxes. This process was delayed when I found a leasing company to do it. Before signing on the dotted line the guy was hit by a bike at East Coast Parkway while roller blading. He was in a coma for over a year! Nobody in his office would touch his stuff as they didn't know if he would die. The insurance quotation ran out and I had to start back to square one for insurance coverage and financing.. oh.. this was a LOOOOOONG, expensive struggle! Anyone think writing up all these stories along the way with pictures would actually sell in book format? As I said before, I need a real best seller to recoup my massive losses. Not just in the vehicle and upgrades but the 50k I lost when the company filed chapter 7!! Or the 20k I was made to cough out for dealership rights.. it goes on and on.. I need a clever writer like Andrew to be my ghost writer!

    JD

  16. Davo says:

    Wow Jim! I knew it would be difficult, but even in my wildest dreams would I have believed it was such a nightmare! Congratulations for sticking it out — too bad the company didn't have your staying power…
    (BTW I saw Clark Howard driving your lil beastie on the TV and he described it as "a golf cart on steroids" 🙂

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