This article was originally published on 13 August, 2020 and updated to reflect the latest information. Additional reporting by Jorinda Hsu.
Owning a car in Singapore is an expensive affair, especially when we factor in various costs such as Road Tax, Certificate of Entitlement (COE) and servicing costs. However, some do not like the prospect of scrambling for space on the MRT every morning. That is why there are people who will turn to owning a motorcycle instead.
After all, the small size of the two-wheeler makes it agile whizzing through jams, and bikes are probably one of the most convenient and fastest way to get around Singapore. In this article, we will delve into how much one should expect to spend on over a 10-year period for this convenience.
Overview Of Motorcycle-Related Expenses
In general, there are six main cost areas that you should consider before you purchase a motorcycle.
- Cost of Motorcycle
- Interest Cost
- Road Tax
- Motorcycle Insurance
- Parking, ERP & Petrol
Each of these costs will differ, depending on the motorcycle that you will be buying, your profile and your usage.
To help us with the calculation, we will use KTM RC390, a popular Class 2A motorcycle model, as a basis for calculating the costs.
Cost Of Motorcycle Purchase
Comparing between a car and a motorcycle, the cost of a swanky new RC390 is around $12,500 before COE. If we include the latest COE prices with the cost, the RC390 will set you back around $20,000 after factoring a COE of $7,506 for Category D.
In contrast, a brand new Perouda Bezza, which is currently the cheapest car on the market in Singapore, will set you back around $68,999 including COE. This gives you about 3.5 times the savings if you choose a motorcycle over a car.
If you are open to buying a secondhand motorcycle, you can expect the price of the bike to be halved.
Interest Cost For Loan
The cost of interest cannot be ignored for motorcycles, unless you intend to pay the full sales price. However, it is simple math that the more you borrow and the longer the duration of the loan is, the higher the interest cost will be. The usual channels for motorbike loans includes in-house financing from dealerships, personal loans from banks and financials institutions. Among the loan options, in-house financing is the most common as the loan application process is relatively flexible.
In our example, we will assume that a buyer pays an average minimum down payment of 15% for the new bike at $3,000 and borrow the remaining amount from a dealership’s in-house financing. Based on Hitach Capital Asia Pacific’s interest of 5% per annum, with a maximum loan tenure of 4 years, the total finance amount, including interest, would amount to $21,800. This would mean $1,800 incurred on the interest.
For a secondhand motorcycle, do note that the in-house financing interest rates will usually be about 2% to 3% higher per annum.
Motorcycle Road Tax
The road tax for motorcycle of 395cc, you will be expected to pay about $63 every year. Over a 10-year period, motorcycle owners would pay $630.
Motorcycle insurance is mandatory in Singapore. The amount you will be paying for your insurance will depend on the few factors, such as your desired coverage, the motorcycle you own, your current age and your driving history.
With at least 2 years riding experience and aged above 23 years old, you can expect to pay about $400 per year for Third Party, fire and theft coverage. Over a 10-year period, you can expect to pay about $4,000.
Parking, ERP & Petrol
If you are buying a motorcycle, you would be expected to use it regularly, and this would incur additional costs such as parking, ERP and petrol.
Season parking at an HDB estate costs up to $17 a month, and additional fees may apply if you were to pay for parking at your workplace.
For ERP, we will assume the charges to be $20 every month.
The fuel capacity of RC390 is about 10 litres, and it consumes 4.2 litres of fuel for every 100km travelled. This translates to which translates to 240km before needing a refuel. Assuming you drive about 30km per day and can achieve the fuel consumption being advertised, you will find yourself needing to top up about 4 times a month. This would translate to about $93 in petrol costs each month, assuming if you pump octane-95 fuel before discount.
The total cost for parking, ERP and petrol will be $130 per month. This will add up to $15,600 over a 10-year period.
Servicing & Maintenance
As the saying goes, it’s not about the years but the mileage. Servicing is dependent on how you often drive the motorcycle, how well it is being maintained and the price of the parts required. Generally speaking, a typical motorcycle servicing requires a change of engine oil, cleaning of filters, threading/changing of tires and change of brake pad.
A major servicing which can cost around $300 to $400, can occur once every two years. On average, it cost around $150 to $200 every year to maintain a motorcycle. That would amount to $2,000 over a 10-year period.
Total Cost Of KTM RC390 Over A 10-Year Period
|Type of Cost||Cost|
|Cost of Motorcycle||$20,000|
|Parking, ERP & Petrol||$15,600|
|Total Cost Over 10 Years||$44,030|
From the above, we estimate that the cost of owning a motorcycle over a 10-year period is about $42,470. This is about 47% higher than the listed sales price and COE of the motorcycle.
The calculation is also based on the usage assumptions. However, if you use your motorcycle more frequently, your petrol, parking and servicing cost will go up, and all these would increase your overall cost.
The cost does not include the amount required to obtain a Class 2A license, which is required to operate the model.
That said, the cost of owning a motorcycle is considerably lower than a car, which is a few times more expensive over a period of 10 years. If you want the convenience (but perhaps not comfort) without breaking the bank, a motorcycle may be your best bet.