The demand for such services has risen over the last year, according to multiple companies in the industry.
Rentals lasting at least a month among customers without personal vehicles have grown by about 40% during the period, with more than half of these customers returning for repeat bookings, according to Charmain Kwee, the executive director of Eurokars Group, an authorized dealer for multiple car brands that also offers rental and leasing through its unit, Eurokars Leasing.
Long-term rentals generally last from a month to a year, while leasing typically covers at least a year and often gives the hirer the option to purchase the vehicle later.
Corporate clients are also increasingly turning to these services to avoid high upfront costs. Kwee told The Business Times that about half of Eurokars’ rental and leasing customers are companies, noting a “slow but steady” increase in demand as firms become more receptive to leasing.
Similar trends have been observed by other providers, including 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.
As of June 2025, Singapore had 32,027 self-drive private-hire cars (PHCs), the classification for cars used for rental and leasing, a 50% increase from 2020. Some 2,025 of them were newly registered in the first half of this year alone.
Industry observers say the surge in car rentals is largely driven by the soaring prices of COE, a permit granting the right to own and use a car for 10 years.
First introduced in 1990 to control traffic and pollution, the permit drives up the upfront cost of owning a car and make the city-state one of the world’s most expensive places to drive, according to the New York Times.
COE prices are determined through auctions held twice a month, with the latest one being on Oct. 23, as of the writing of this article.
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. It previously reached an all-time high of S$128,105 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 but is typically used for bigger cars, was 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 Covid-19 pandemic.
COEs for commercial vehicles (Category C) and motorcycles (Category D) also climbed, though more moderately, to S$76,801 and S$9,389, respectively, by late October.
The Land Transport Authority said prices have remained high due to sustained strong demand, even as the supply of Category A certificates increased 29% year on year.
“We advise car buyers and dealers to be prudent in bidding for COEs,” the agency said after the latest tender closed, as quoted by The Straits Times.
Premiums have particularly risen in recent months ahead of an expected cut in electric vehicle subsidies next year.
“With car prices steadily increasing, we see that more individuals and companies are turning to longer-term rentals and leases as a way of owning a car without needing to fork out a big lump sum, and have a more convenient ownership experience,” Kwee said.
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 for 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 expand 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.
ZipZap CEO Toh Ting Feng said long-term rentals, leasing and subscription models are crucial to meet the high demand for flexible car access.
“We definitely see this trend continuing as we see a shifting mindset and preference towards ‘subscription as a service’ rather than ‘ownership,’ as people today are more comfortable and understand the benefits and flexibility that subscription services provide.”
