Car Depreciation in Singapore: Calculate the Holding Cost
Use purchase and disposal values over the same period, keep rebate value from being counted twice, and distinguish an estimate from a market-price forecast.
Depreciation is the difference between the price paid and the proceeds received for the complete vehicle over a holding period. An annualised figure helps compare offers, but does not show the actual path of resale prices between purchase and sale.
The basic calculation
For a hypothetical $100,000 purchase and $40,000 disposal proceeds after five years, depreciation is $60,000, or $12,000 a year. That is $1,000 a month on an averaged basis. It excludes finance interest, insurance, energy and other operating costs.
If the disposal value falls to $25,000, annual depreciation rises to $15,000. The assumed exit price therefore changes the answer materially. Label it clearly and run more than one case.
What goes into disposal proceeds?
Use either a complete resale value or separately itemised deregistration proceeds. A complete sale price already reflects the remaining vehicle and entitlement. Adding PARF or unused COE again would overstate recovery.
If using deregistration, check the original COE cohort, actual ARF, age band and unused entitlement. Body/export value is separate. A car does not necessarily have zero value at expiry: an eligible PARF amount and body value can remain.
Do not infer a universal depreciation curve
The site does not maintain a verified transaction-price panel that establishes a fixed first-year loss, brand ranking or optimal buying age. Asking prices and advertised annual depreciation are not completed sale prices. Condition, remaining COE, exact variant and market conditions can all alter an offer.
Read a listing’s annual figure carefully
Check the denominator: is it the remaining period to expiry or your intended holding period? Check the assumed residual and whether the displayed price depends on finance or trade-in conditions. A low advertised annual number can rest on an optimistic exit assumption.
Use it with the rest of the budget
For economic cost, add interest and running expenses to depreciation. For cash flow, separately plan the deposit and repayments. Do not add both full loan principal and depreciation as though they were independent ownership costs.
When deciding whether to keep an existing car, compare its current sale value with expected future proceeds; the original purchase price is sunk. The cost calculator can organise these assumptions, but its curve is not a guaranteed future resale price.
Sources and review date
Reviewed on 13 September 2026. Historical results retain their exercise dates; worked budgets are assumptions, not quotations.