With the increasing number of millionaires in Singapore, it is not uncommon to see high-quality and high-performance vehicles on the roads. While owning a car in Singapore is definitely a status symbol, owning a luxury car in an already very wealthy city-state can be seen as the ultimate sign of wealth. But how much does it actually cost to own one of the most popular luxury cars in Singapore? And how much would you have to earn to afford that cost? We take a look at the cost of owning the newly released Mercedes Benz S-Class.

The upfront costs of the Mercedes Benz S-Class S450L

The latest Mercedes Benz S-Class S450L costs S$502,888 (including COE and after deducting the S$20,000 VES surcharge) if you register it before the end of June 2021, or S$507,888 if you register the car from July 1, 2021. That’s 3.5 times more expensive than one of the most popular sedans in Singapore, the Toyota Corolla Altis 1.6, and 12% more expensive than the average 4-room HDB flat. Since the S450L’s OMV is currently S$111,149, you qualify for a loan of 60% of the total cost. Because of this, you would need to have around S$200,000 in cash for the down payment.

Running costs of the Mercedes Benz S450L

Cars need constant maintenance and upkeep, and luxury cars are no exception. For the Mercedes Benz S-Class, you’ll pay S$1,406 or more for a basic 3-session maintenance package (approximately S$469 per session). If your car needs repairs, expect to pay significantly more. You’ll also need to pay road tax, which depends on your engine size. For a Mercedes Benz S-Class, this will cost you S$2,384 per year. Other costs you’ll need to consider include petrol costs, road tolls, insurance and car washing.

If you have previous driving experience and a good record, your car insurance at 50% NCD will be around S$2,500 per year. If you are a novice driver, expect to pay an average of S$4,400 to insure your Mercedes Benz S450L. Petrol costs are also S$3,516 per year for the average driver, considering the Mercedes S450L’s fuel consumption of 11.8 km/l. In total, expect to pay an additional cost of almost S$9,000 per year over and above your car loan payments.

How much would you have to earn to afford a Mercedes S450L?

Since the monthly payments alone cost more than what the average Singaporean earns per month, you would need to earn at least S$7,030 per month to qualify for the full 60% loan thanks to the Total Debt Servicing Ratio (TDSR), assuming you have no other loan repayments or debt obligations.

So let’s take a more realistic example. Let’s say you’re the average Singaporean who just wants a luxury car. In this case, if your 4-room HDB flat costs the average price of S$450,000 and you take out a 25-year home loan with an interest rate of 1.25%, your monthly mortgage payment will be S$1,573. This brings your total monthly debt to S$5,789. In this case, you would need to earn at least S$9,649 (S$115,780 gross income per year) to qualify for the full 60% loan for the Mercedes. If you have credit card debt or student loan debt, you would need to earn even more to qualify for the full loan.

Save on car costs

Although cars are expensive, there are still many ways to reduce your financial burden. The easiest way to save on car costs is to buy a certified pre-owned car with good mileage. For example, you can buy a used 2018 or 2019 Mercedes Benz S450L with a 30-40% discount. When it comes to actually maintaining your car, you should make sure you have your car serviced every 10,000 km to ensure that it is working properly. While you may think that you should wait until a problem arises, you will actually save money in the long run because maintenance costs are much lower than the cost of servicing or fixing a problem.

Another way to save on the cost of ownership is to compare insurers. Since you’ll already have to pay a premium for your insurance based on your car model, comparing car insurance policies is crucial to avoid overpaying for your plan. Finally, it’s good practice to make sure you’re getting a cheap car loan. Even small interest rate changes can make a big difference in your overall interest costs. That said, you get what you pay for with your car. Skimping on necessary costs just to save money will often lead to more hassle in the long run. At the same time, you shouldn’t feel pressured to overpay for features you know your car doesn’t need.

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The article “How much does the new 2021 Mercedes Benz S-Class actually cost you?” originally appeared on the ValueChampion blog.

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