Car, taxi and bus - how the costs stack up

Almost $2,000 a month for a new car, half that for taxis, and $100 for bus/train option

"It's really hard to get a taxi," I complained to the cabby as I finally managed to hail one after 20 fruitless minutes.

"Why don't you buy a car, then?" he retorted, probably not realising that he would be out of a job if all his customers took his advice.

Still, the thought intrigued me. Conventional wisdom is that cars are much more expensive than taxis which are, in turn, much costlier than taking the bus and MRT.

I have no doubt that public transport is the most affordable but with the non-stop increases in cab fares and surcharges over the years, have taxi costs caught up with the expense of owning a car?

I decided to find out.

New car

I took the case of someone who drove a Toyota Corolla Altis for 10 years before scrapping it for some cash.

This car owner lives in Tampines and drives to and from work in Shenton Way. He also drives on his days off.

A new Toyota Corolla costs about $125,888 now, including certificate of entitlement premium.

I took it that the Tampines driver can pay $50,355 of the car's costs in cash - you'd better have a lot of money if you want to drive in Singapore - and will borrow the rest in a five-year loan from a friendly banker at 2.28 per cent annual interest.

Annual costs include insurance, servicing and road tax, totalling about $3,140. He will also need to pay $4,200 for fuel and $2,700 for parking.

This includes parking in an HDB estate and in shopping malls on weekends. I also assumed this guy's company charges him a good rate of $1,500 a year for parking in Shenton Way.

On the topic of keeping costs low, I assumed that our friend needs to pay only $4.50 in Electronic Road Pricing (ERP) charges for each working day in the year.

To keep within this budget, he may need to find a way to travel during periods when the ERP charges are slightly lower.

After all the calculations, the cost of owning and operating the car will work out to about $235,590 for 10 years, after deducting the scrap value of about $9,300. That works out to $1,960 a month.

Do note that the costs are very lumpy. On a regular basis you will need to pay less than $1,960 a month because this includes the initial $50,355 car down payment, spread out over many months.

Still, $1,960 is a good ballpark figure for us to know how much driving a new car will cost on average a month.

Second-hand car

But what if our driver buys a second-hand car? I searched auto sites such as OneShift and SgCarMart and found a five-year-old Toyota Corolla Altis going for $63,800. With $50,355 in cash upfront, the driver needs only a small loan, payable in three years.

Including costs such as insurance and ERP, and again getting a rebate from the scrap value, he will need to spend $109,690 over five years before the end of the car's life.

That's $1,830 a month.

I also found a nine-year-old Corolla Altis for the auspicious-sounding $18,800. After deducting the scrap value, it will cost about $19,610 to drive it for a year, or in the range of $1,630 a month.

So, clearly, the costs will be lower if you buy a second-hand car. The older the car, the lower the costs. That sounds like common sense but now I have the maths to prove it.

Taxi

And now to the favoured mode of transport for those who want more convenience but don't want to stump up cash for a car - the taxi.

It costs about $41.50 for a round trip between Tampines and Shenton Way, including surcharges and $4.50 in ERP charges.

I calculated that our individual will want to take taxis on his leave days, public holidays and weekends as well.

By timing his trips properly, he will be able to avoid ERP charges on his non-working days, but will still have to pay some cab surcharges such as the 25 per cent charge between 6pm and midnight.

The annual expense will work out to about $13,060, or about $1,090 a month. This is assuming our individual doesn't book any taxis.

It turns out, even with all the new surcharges, a taxi would still cost about half the amount it takes to drive a new car. Taxi passengers also spend less than drivers of second-hand cars, although the difference is narrower.

Bus/MRT

Just for comparison's sake, I threw in the public transport option, which works out to about $98 a month. That's about one-tenth the cost of taking taxis or one-twentieth the cost of owning and operating a new car.

Do note that my calculations provide only rough figures. The costs will differ from person to person, depending on many factors such as where that person works and whether he can find cheap parking options and repair shops if he chooses to drive a car.

Benefits of driving

Of course, no discussion of car costs is complete without a mention of the benefits of driving.

It all boils down to convenience: You won't need to wait for a taxi and it can be very frustrating on rainy days and on occasions like Chinese New Year.

If you want to book a cab, your costs will increase and even then, there is no guarantee you will get one. But on the flip side, driving a car means you will need to look for parking - a hassle you can avoid if you take taxis. You also don't need to drive your own vehicle if you manage to flag a taxi.

At the end of the day, it's all about trade-offs and how much you are willing - and able - to pay for the sake of comfort and convenience.

I hope you make a good choice, keeping in mind your financial resources.

jonkwok@sph.com.sg