Which Investment Should I Make First: a Car or a Home?

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If you’re like most people, the first two major possessions you’d like to have are a home and a car. And if you’re like most people, you cannot afford to buy both at the same time. You’ll have to prioritise one over the other.

So, here is the burning question in your mind: Car or home first? Keep reading for the answer.

The cost of owning a car in Singapore

Singapore has one of the most reliable and affordable public transport systems in the world. You can quite literally go everywhere in the city-state using only buses and the MRT. With such an efficient transport system, it’s no wonder the government is discouraging the public from owning cars.

Aside from that, Singapore is also a small country with limited road space. Having too many vehicles on the road will cause a lot of traffic, and private cars will take up much-needed road space from public transport. The government wants as few private vehicles on the roads of the city-state as possible.

With that, the government imposes heavy taxes and tolls on car owners. You cannot even buy a car that easily in Singapore. You’ll first need a Certificate of Entitlement (COE), which gives you the right to own a car for ten years. The cheapest COE today is upwards of S$100,000, which is more expensive than many base-model cars. If you do not have a COE, you cannot purchase a car, so you don’t have a choice on this one. 

Not to mention the cost of petrol, registration, taxes, and maintenance. With all of these expenses, a car is a huge capital investment for the average Singaporean. Unless you intend to use the car as an income-generating asset, you’ll be better off renting cars, booking Grab, or taking public transport instead.

Pros of owning a car

That’s not to say owning a car has no real benefits. For one, you can go anywhere you want at any time. The convenience of setting your own schedule gives you a lot of freedom. You can’t do this when taking public transportation all the time – you have to adhere to the schedules of the MRT and buses. 

Having your own car also gives you a sense of achievement. It isn’t easy to purchase a vehicle in Singapore, so you can consider it a huge win once you have your own car.

Most importantly, you can take any route you wish. If you know shorter and faster ways to get to your destination, you can take that route as you please. No need to go the long way unlike taking public transport.

Basically, owning your own car lets you take control of your time. You can’t put a price on that.

Save for a home first

While owning a car has its benefits, you might find it hard to justify the huge expenses involved in owning a car. 

Instead, consider saving your money for a home. You will get a lot more value out of having your own home, even if it’s an HDB flat. A condominium or a landed house tends to be more expensive, but it does give you a sense of affluence and achievement when you’re able to afford one. 

But if you don’t want to wait too long to afford a condo or house, an HDB flat is a good option for most people. You can get a simple 2-room HDB BTO flat for about S$90,000 at the very least. The good thing about HDB flats is you can use some of the money in your CPF ordinary account (OA) to cover a portion of the downpayment. 

Take note that you must give 5% of the flat’s market value as downpayment in cash. If you’re short, you may want to approach reliable money lenders for a loan. This is for your future home, so it isn’t quite considered a bad debt.

Once you have your own home, you can save a tremendous amount of money on rent, which will set you back at least S$2,000 per month for a 2-room HDB rental flat. Other locations, especially those near the CBD, will cost much higher. 


Knowing the associated costs and benefits, a home is the better investment to go for first if you are in Singapore. This applies whether you are single or have your own family. You get much better value out of investing in a home first. After that, you can start saving for your own car if you really want one.

  • Post published:November 22, 2023
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  • Post category:News

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