How are rental car numbers reaching new highs in Singapore?

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Rental Car Numbers Reach Record Highs in Singapore Amidst Rising Ownership Costs

Singapore's rental car fleet has surged to a record high, with 97,567 vehicles on the road as of June. This significant increase sees rental cars now constituting 14.9 per cent of the total car population, a notable jump from 10.5 per cent in 2021. The escalating costs associated with private car ownership, particularly the high Certificate of Entitlement (COE) premiums, are a primary driver behind this trend, prompting a shift towards leasing, car-sharing, and ride-hailing services.
Soaring COE Premiums Drive Demand for Rentals

The financial burden of owning a private car in Singapore has become increasingly prohibitive, largely due to the fluctuating yet consistently high COE premiums. These premiums, which are a prerequisite for vehicle registration, have ranged between S$102,009 and S$130,889 in 2026. This stands in stark contrast to the S$65,010 to S$116,002 range observed in 2024, illustrating a substantial upward trend. Transport economist Walter Theseira highlights that for individuals who drive infrequently, renting a vehicle presents a more financially sensible option when weighed against the substantial outlay required for car purchase.
Shifting Perceptions of Car Usage Among Younger Demographics

The demand for rental vehicles is experiencing a consistent rise, with short-term rentals increasingly being embraced as a viable and accepted mode of transportation, particularly among younger demographics. Adrian Lee, president of the Vehicle Rental Association, points to this growing acceptance, noting that younger individuals are integrating rental options into their regular travel patterns. This shift signifies a broader change in how car usage is perceived, moving away from exclusive ownership towards more flexible and usage-based models.
Fleet Expansion and Leasing as a Waiting Strategy

In response to the growing demand, some automotive businesses have begun to expand their rental fleets. Sime Darby Auto Selection, for instance, has increased its fleet by approximately 10 per cent, bringing its total to around 600 vehicles. This expansion is partly driven by customers who are opting for leases as a strategic measure while they await a potential decrease in COE premiums before committing to a purchase. This approach allows them to maintain mobility without the immediate, high cost of ownership.
Declining Private Car Ownership and Cost Savings

The overall private car population in Singapore has conversely fallen to its lowest point since 2019, with 516,237 private cars on the road at the end of June. This decline, coupled with the rise in rental numbers, suggests a broader societal move away from the traditional model of private car ownership. Some former car owners are reportedly achieving substantial savings by foregoing car ownership altogether and relying on ride-hailing services or public transportation, indicating a significant financial incentive for this lifestyle change.

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How are rental car numbers reaching new highs in Singapore?

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