The Rise of Car Rentals and Leases in Singapore
The increasing cost of buying a car in Singapore is pushing more people and businesses to consider long-term rentals and leases. This shift is primarily due to the high prices of Certificate of Entitlement (COE), which is required to own a vehicle in the city-state. As a result, the demand for rental and leasing services has seen a significant rise over the past year.
According to Charmain Kwee, the executive director of Eurokars Group, a company that offers car rentals and leases through its unit, Eurokars Leasing, the number of customers opting for long-term rentals has increased by about 40% in the last year. These rentals typically last from a month to a year, while leasing agreements usually cover at least a year and may give the hirer the option to purchase the vehicle later.
Corporate clients are also turning to these services to avoid high upfront costs. Kwee mentioned that approximately half of Eurokars’ rental and leasing customers are companies, with a “slow but steady” increase in demand as firms become more open to leasing options.
Other industry players, such as Kinto Singapore, a subsidiary of Toyota Financial Services; the leasing arm of multi-brand dealership group Wearnes Automotive; and ZipZap, a rental service created by the team behind car-sharing platform GetGo, have also observed similar trends.
As of June 2025, there were 32,027 self-drive private-hire cars (PHCs) in Singapore, marking a 50% increase from 2020. Around 2,025 of these were newly registered in the first half of this year alone.
Understanding the COE Impact
Industry experts attribute the surge in car rentals to the soaring prices of COEs. Introduced in 1990 to manage traffic and pollution, the permit significantly increases the upfront cost of owning a car, making Singapore one of the most expensive cities to drive in, according to the New York Times.
COE prices are determined through monthly auctions, with the latest one held on October 23, as of this article’s writing. Category A certificates, which apply to smaller and less powerful cars as well as electric vehicles, closed at S$122,000 (US$93,460) following the tender. This is slightly lower than the all-time high of S$128,105 recorded earlier in the month.
For larger and more powerful vehicles under Category B, the COE premium stood at S$131,889. The Open category, or Category E, which can be used to register any vehicle except motorcycles, was priced at S$136,000. These rates are about 13–17% higher than those from the same month a year ago and nearly four times what they were in July 2020, when COE bidding resumed after a temporary halt during the pandemic.
COEs for commercial vehicles (Category C) and motorcycles (Category D) also saw increases, though more moderate, reaching S$76,801 and S$9,389, respectively, by late October.
The Future of Car Ownership in Singapore
The Land Transport Authority noted that prices have remained high due to sustained strong demand, even as the supply of Category A certificates increased by 29% year on year. The agency advised car buyers and dealers to be prudent in bidding for COEs, as quoted by The Straits Times.
Premiums have particularly risen in recent months ahead of an expected cut in electric vehicle subsidies next year. Kwee explained that with car prices steadily increasing, more individuals and companies are turning to longer-term rentals and leases as a way to own a car without needing to pay a large lump sum upfront, while enjoying a more convenient ownership experience.
For those who rent, most ownership-related expenses, including road tax, insurance, and maintenance, are typically covered, except for fuel. Dennis Lim, general manager for pre-owned and leasing at Wearnes Automotive, added that leases offer hirers greater certainty because the costs are largely fixed and do not require large upfront deposits.
Experts believe the rental and leasing market will continue to grow in the near future, given that COE supply is unlikely to rise, premiums are expected to stay high, and the sentiment towards leasing is changing.
Emerging Trends and Consumer Preferences
ZipZap CEO Toh Ting Feng emphasized that long-term rentals, leasing, and subscription models are crucial to meet the high demand for flexible car access. He noted that the trend is likely to continue as there is a shifting mindset and preference towards “subscription as a service” rather than “ownership.”
People today are more comfortable and understand the benefits and flexibility that subscription services provide. This change in consumer behavior is expected to further drive the growth of the rental and leasing market in Singapore.