This article is unlikely to be relevant for most people in Singapore. The fact that you have clicked on this article is not because you are interested to buy a Ferrari. Rather, you are curious to find out how much a person really needs to earn in Singapore before they can comfortably afford a Ferrari without over stretching on their finances.
As a website, DollarsAndSense.sg have always been advocating on financial prudence when it comes to how we spend our money. We too were curious on how much is needed before someone can buy a Ferrari in Singapore, and yet continue to stay within the spectrum of financial prudence.
So did a little fact finding for on how much it takes before someone can own a Ferrari.
The Cheapest Brand New Ferrari In Singapore – The Ferrari California
The word “cheap” and “Ferrari” should never be used in the same sentence. However, we are going to break the trend and do so. From our knowledge on cars, the most affordable (i.e. cheapest) Ferrari currently on the market would be the Ferrari California.
Based on information from SgCarMart, the California goes for $905,000 before COE. Assuming a COE of $45,000, a brand new car would cost $950,000, before any other cost add-ons for customisation.
How Much Should You Earn Before You Can Buy It?
As a rule of thumb, we believe people should not spend more than 1 year of their annual salary for a brand new car. Most cars in Singapore are used for 10 years. As such, it does not make sense to be spending more than 1 year of your salary on a vehicle that you would drive for no more than 10 years.
For example, an entry level Mazda 3 costs $91,000 today. That means a person with a salary of $7,500 per month, or $91,000 per annum, could possibly afford it. We are not saying that you can definitely afford one if you earn that salary. Rather, you can start thinking about one if you meet the criteria.
For a Ferrari California, we are looking at someone who earns about $950,000 per annum.
So who are these people who can afford that amount? According to a parliamentary response back in November 2012 by DPM Tharman Shanmugaratnam, the top 1% of income earners in Singapore has a taxable income of about $700,000 per annum. This translates into about 32,000 individuals in total. These are the people who probably can afford to buy a Ferrari or other types of supercars, if they choose to.
How Much Do You Need To Own A Ferrari
Even after you buy a Ferrari, you still need to fork out money each year to continue owning it. How much would that add up to?
An article published by Yahoo reported that the cost of insuring a Ferrari would be about $12,000 per year. Road tax would be an additional $4,000 per year and petrol would cost about $10,400 per year, assuming a spending of $200 per week. This adds up to a staggering $26,000 per year, not inclusive other costs such as servicing and parking.
The depreciation cost of a Ferrari is estimated at about $72,000 per year. In total, a Ferrari would easily lose you about $98,000 per year, assuming you bought it without requiring a loan, which would add more interest cost to your purchase.
|
Cost of Owning A Ferrari Each Year |
$26,000 |
|
Depreciation Per Year |
$72,000 |
| Total |
$98,000 |
In conclusion, we would say that it is technically possible to own a Ferrari in Singapore and still be considered financially prudent. But unless you are well within the top 1% of income earners in Singapore, and really enjoy the attention of driving a supercar at snail like pace on our roads, it would be best for you to find other more practical ways to spend your hard-earned money.
Read Also: 5 Things That Singaporeans Are Overpaying For
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