In Singapore, the most common “car mistake” isn’t choosing the wrong model. It’s choosing the right model for the wrong financial reason.
The mistake is simple: people judge affordability using the monthly instalment. But instalments are a payment method — not the economic cost. The real cost is driven by COE-embedded depreciation, liquidity drag, and exit risk.
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If you want the “ground truth” baseline first: 5-Year Ownership Breakdown.
If you only asked “can I pay the instalment?” — you are at risk.
The mistake is not “buying a car”. The mistake is buying a car using payment-thinking instead of exposure-thinking.
Payment-thinking asks: “Can I afford $1,600 per month?”
Exposure-thinking asks: “Am I willing to carry a multi-year depreciation + liquidity risk position — and is it rational versus my alternatives?”
Instalments can be engineered. You can always make a high-commitment decision look “comfortable” by stretching tenure or borrowing more. That does not change the economic cost — it only changes how you pay.
Instalment-only thinking hides:
If you’re financing, make sure you understand flat rate vs true borrowing cost: Car Loan Rates in Singapore (2026): Flat Rate vs Effective Interest.
The cleanest comparison is a 5-year horizon:
You don’t need perfect precision. You need a decision model that prevents self-deception.
Start with the baseline: 5-Year Car Ownership Breakdown and sanity-check monthly realism here: True Monthly Cost of Owning a Car in Singapore.
If you want a fast break-even check: Car vs Ride-Hailing Break-Even Calculator.
In Singapore, depreciation is not just “car value loss”. A large part of your depreciation exposure is COE decay. That’s why two people can buy similar cars, but have completely different outcomes depending on COE cycle timing and holding period.
If you want the structural explanation: COE Cost in Singapore (2026): What You’re Really Paying For.
Practical takeaway: if you are buying during elevated COE conditions and might exit early, you are stacking two risks: high depreciation curve + short amortisation window.
Most buyers believe they will hold for 5–7 years. Real life often forces earlier exits: career changes, family needs, relocation, or cashflow stress.
The regret pattern usually looks like this:
If your timeline is uncertain, you need a decision framework before you buy: Is It Worth Owning a Car in Singapore? (2026 Decision Framework) and the timing lens here: Should You Buy a Car Now or Wait? (COE Timing Framework).
Use a 3-gate rule. If you fail any gate, don’t buy yet.
Gate A — Cost gate
Gate B — Logistics gate
Gate C — Liquidity gate
If you want a reality check on the salary/cashflow side: How Much Salary Do You Need to Own a Car in Singapore?
Used can reduce entry exposure, but only if COE runway and exit liquidity are sensible: Used Car vs New Car in Singapore (2026).
Leasing can buy flexibility and reduce timing risk — at a margin: Car Leasing vs Buying in Singapore.
If your “new purchase” is actually replacing a car, compare against renewal: Is COE Renewal Worth It? (2026 Framework).
If this article made you pause, these are the pages that will give you the full structural clarity:
In Singapore, buying a car becomes a financial mistake when the decision is driven by instalment comfort instead of total exposure and liquidity risk.
Next step: run the break-even calculator, sanity-check against the 5-year ownership baseline, then pressure-test COE timing using Buy Now or Wait?.
Using the monthly instalment to judge affordability. Instalments hide depreciation (often COE-driven), liquidity drag, and exit risk.
Because it hides the dominant cost driver: depreciation. Lower instalments can be engineered by stretching tenure or borrowing more, but total exposure remains.
If your ride-hailing spend is far below break-even, you would stretch liquidity, or you might need to sell early during a high COE cycle, it is often a mistake.
A practical break-even zone is commonly around $2,500–$3,000/month depending on car profile and COE/depreciation exposure. Use the break-even calculator to test your own number.