How does the rising rental car fleet reflect changing transport preferences in Singapore?

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Singapore's Shifting Transport Landscape: Rental Fleet Surge Amidst Ownership Costs

Singapore's private car population has declined to its lowest point since 2019, coinciding with a record expansion of the rental car fleet. This trend suggests a potential recalibration of transport preferences, driven significantly by the escalating costs associated with private vehicle ownership. As of June, the number of private cars stood at 516,237, while the rental car fleet reached 97,567. This shift is evident in the proportional decrease of private cars from 82.5 per cent in 2021 to 79 per cent currently, with rental cars increasing their share from 10.5 per cent to 14.9 per cent over the same period.
Soaring Certificate of Entitlement Premiums Drive Leasing Demand

A primary catalyst for this evolving transport dynamic is the substantial increase in Certificate of Entitlement (COE) premiums. These premiums, a mandatory requirement for vehicle registration in Singapore, have fluctuated between S$102,009 and S$130,889 in 2026, a notable rise from the S$65,010 to S$116,002 range observed in 2024. Such elevated costs make outright car ownership financially prohibitive for many, prompting a growing number of individuals to opt for leasing arrangements as a temporary measure while awaiting a potential decrease in COE prices. This strategy allows consumers to maintain flexibility and avoid committing to the high initial investment of purchasing a car.
Financial Prudence and Alternative Transport Options

Beyond leasing, a segment of the population is finding significant financial advantages in foregoing car ownership altogether. For instance, 51-year-old product engineer Gordon Tiang reported saving approximately S$1,500 monthly by not owning a car and utilizing ride-hailing services for occasional use. Similarly, civil servant Joyce Lee and her husband have transitioned entirely to public transport, saving between S$1,500 and S$1,800 per month after relinquishing their family car. These personal accounts highlight a growing financial incentive to explore alternatives to private vehicle ownership, demonstrating that substantial savings are achievable through such choices.
Evolving Rental Market Dynamics and Regulatory Impact

The surge in the rental car sector is also influenced by evolving market dynamics and regulatory measures. The number of self-drive rental cars specifically has seen an increase, rising from 33,765 at the end of 2025 to 36,317 by June. Conversely, rental cars utilized for ride-hailing services experienced a slight decrease, potentially linked to a new three-year lock-in period implemented in February 2025 for business-owned ride-hailing vehicles. This regulation, intended to ensure a stable supply of vehicles for ride-hailing, restricts the resale or conversion of these vehicles to private cars within that timeframe, indirectly affecting the composition of the rental fleet.

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How does the rising rental car fleet reflect changing transport preferences in Singapore?

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