Car Depreciation in Singapore (2026): The Real Monthly Cost You Can’t Ignore

Last updated: 2026-02-23

If you want tactics and timing discipline, see COE Bidding Strategy.

Fast path:

Want the full model? Start with The real cost of owning a car.
Budgeting monthly? Use true monthly cost and then layer depreciation on top.
Comparing alternatives? See car vs ride-hailing and the public transport baseline.

What “depreciation” really means in Singapore

In Singapore, depreciation is usually shorthand for how much value your car loses each year. Because COE dominates the cost structure, depreciation often becomes the single largest component of ownership cost — bigger than fuel, parking, or insurance for many drivers.

The simplest way to estimate depreciation per month

A practical estimate is:

Annual depreciation = (Purchase price − Expected selling price) ÷ Years you plan to hold
Monthly depreciation = Annual depreciation ÷ 12

This is not accounting math. It’s a decision tool. Your goal is to avoid underestimating your real monthly exposure.

Why depreciation looks “crazy” during high COE periods

When COE is high, you are effectively prepaying more of your usage upfront. If resale prices don’t rise at the same pace (or you sell at the wrong time), your depreciation spikes.

That’s why timing pages like buy now or wait matter — not because anyone can predict COE, but because your holding period and exit plan must be realistic.

New vs used: where depreciation usually hits hardest

New cars: typically take the steepest depreciation hit early, then flatten later.
Used cars: often have a “known depreciation curve”, but condition, accidents, and COE cycle still matter.

If you’re deciding between the two, use used vs new and treat depreciation as the primary lever (not just monthly instalment).

COE renewal and depreciation

COE renewal changes the depreciation story because the remaining usable life is reset, but your car’s age and maintenance profile don’t disappear. If you’re considering renewal, read:

A quick decision framework

Start with your true monthly ownership model (not instalment-only): full breakdown.
Set a depreciation ceiling you’re willing to “burn” per month.
Match your holding period to your life plan (work, kids, relocation, cash runway).
Pick the lowest regret exit plan — because the sale is where depreciation becomes real.

Common mistakes

Using dealer “depre” as truth without checking assumptions.
Optimistic resale price expectations.
Ignoring high fixed costs because “I don’t drive much”.
Overfocusing on loan instalment and underweighting depreciation.

FAQ

What is depreciation for a car in Singapore?

Depreciation is how much value your car loses each year. In Singapore, it is heavily influenced by COE, remaining COE years, and prevailing market prices.

Why is depreciation often the biggest cost of owning a car?

Because COE and scarcity-driven pricing compress most of the car’s cost into the ownership period. Over 5–10 years, depreciation/COE exposure often dominates fuel, insurance, and maintenance.

Should I focus on low depreciation when choosing a car?

It’s a strong starting point, but you should evaluate total exposure: depreciation plus running costs (fuel, parking, ERP, insurance, maintenance) and your usage pattern.