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Renewing Your COE After 10 Years – Should You Even Bother?

renew COE singapore

Peter Lin

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Singapore is probably the only country in the world where cars are so expensive that owning a Toyota Altis can be considered a luxury. We’re the only people insane enough to spend almost as much on a vehicle as we would on an HDB unit. If that wasn’t bad enough, your car will be de-registered after 10 years unless you pay to renew your COE. Even cats and dogs live longer than cars in Singapore!

But, there’s no use complaining. This is the law in Singapore and there’s no loophole to get around it. So what are your options once your car has been around for 10 years? Here are 3 things you can do.

 

1. Scrap the car and buy a new one

I suspect this would be the option most of you would choose. Once you have experienced the sheer convenience of having your own means of transport, it’s very difficult to be convinced to give it all up and subject yourself to the risks of public transport.

A car becomes less of a convenience and more of a necessity for several types of people. These include families with small children, those who work in out-of-the-way locations like Jurong Island or other industrial estates, those who work till late or are on the night shift.

Yes, for these, even with the still ridiculous COE prices might not put them off getting a brand new car. Just be prepared to set aside at least $160,000.

You’ll have to set aside about $80,000 as a down payment, but take a loan for the remaining amount. Assuming you get the best car loan with an interest rate of 1.88%. That still comes up to a repayment of almost $1,400 a month over 5 years.

And that’s not including all the other costs you’ll incur through the years like maintenance, insurance and road tax, to name a few.

 

2. Rent or Lease a car

If you’ve been wondering if it’s better to lease or buy a car in Singapore, it boils down to four questions you should ask yourself.

  • Do you need the car urgently and can’t afford the down payment?
  • Are you not planning to stay in Singapore for long?
  • Do you intend to stop driving in a few years?
  • Do you want to indulge in a luxury model?

If you answered yes to any of these questions, then when you de-register your 10-year-old car, consider renting or leasing a car in its place. Renting or leasing a mid-sized sedan would set you back by $1600 to $1800 a month. This is mainly because the cost includes insurance, road tax and even full vehicle maintenance.

 

3. Pay the Prevailing Quota Premium and renew COE

Right now, there are two options available if you want to keep your current car and pay the Prevailing Quota Premium to renew your COE.

You can either pay 50% of the Prevailing Quota Premium and renew your COE for 5 years, or 100% of the Prevailing Quota Premium and renew it for 10 years.

Using figures from the recently-closed exercise in January 2016, the Prevailing Quota Premium is $51,301 for Category A and a little less than $50,100 for Category B.

That means, if you only need your car for 5 years, this could set you back by almost $26,000 for Category A, or a little more than $25,000 for Category B.

If you need your car for 10 more years, you’ll have to pay $51,301 for Category A and a little more than $50,000 for Category B.

Since you’re just renewing your COE and not actually buying a new car, you won’t be eligible for a car loan. Instead, one option you have is taking a personal loan.

How much you can loan depends on your income. While you can technically loan up to 4 times your monthly salary, the exact amount would be dependent on whether you have any other credit facilities (like credit cards) with the bank.

In other words, unless you’re earning over $10,000 a month, you can forget about taking out a big enough personal loan to pay off the full Prevailing Quota Premium. (And if you’re earning that much, then you probably don’t even need to take out a loan at all!)

 

But keeping your car for 5 years? Now that’s within reach…

Say you want to keep your Category A car for 5 years and your monthly income is $5,000. You need to pay slightly less than $26,000, or 50% of the Prevailing Quota Premium. The bank allows you to loan up to $20,000 over 5 years. That means you’ll need about $6,000 in cash and then pay as little as $700 per month over the next 5 years.

The immediate savings of this choice is obvious. Your monthly repayment amount is half that of a car loan for a new car, and the down payment is a fraction of it. It’s also much cheaper than renting or leasing a car, and you’ll get to keep driving a familiar set of wheels.

Of course, this is assuming that you’ve been diligent in maintaining your car over the past 10 years. If you’ve been slacking off on your oil changes or your regular car servicing routine, then the chances of your car surviving for another 10 years are slim. Even if you find the best interest rates using a personal loan comparison tool, all your savings will probably end up paying off your repair bill.

On the flip side, it’s also important to note that if you have kept your car in tip top shape and only renewed your COE for 5 years, no manner of begging or weeping is going to get LTA to allow you to renew your COE again at the end of 5 years just because you decided not to renew it for 10 years. On the other hand, should you renew it for 10 years, you will be allowed to renew it again (should you wish) after those 10 years are up. Weird? Yes. But too bad.

 

Are you planning to buy a new car once it hits the 10-year-mark or renewing your COE? Share your thoughts with us.

Image Credits:
Peter Dunne

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Peter Lin

I am the poster boy for reinventing one's self. I've been a broadcast journalist, technical writer, banking customer service officer and a Catholic friar. My life experiences have made me the most cynical idealist you'll ever meet, which is why I'm also the co-founder of a local pop culture website. I believe ignorance is not bliss, and that money is the root of all evil only if you allow it to be.

  • Zharfan Zamkhuri

    In my opinion. Majority Singaporean car owners are ‘forced’ to “buy” (actually lease) a car in order for easy travel to Malaysia. During COE was cheap, many Singaporeans buying OPC (red plate) cars… Better revamp a scheme which any Singaporean want to buy a car but fails to present Malaysian address, they not eligible for a special rebate (or just improve the current OPC scheme)… Just how OPC scheme introduced…

    LTA should study car ownership among Singaporeans, if the car frequently used in Malaysia and having Malaysian address, special scheme should be available similar to OPC scheme, if the car rarely used in Malaysia, no special scheme and similar to black number plate scheme…

    Rebates and rules for new special scheme:

    1. 60% discount of COE for Cat A cars and 40% for Cat B cars (Except Family MPVs which 60% discount)… Currently OPC have $17,000 COE rebate…

    2. Similar to OPC road tax…

    3. Similar to OPC scheme which paying $20 licence for driving on peak hours but it should be refund the licence fee if the car entering checkpoint about 50% of the licence fee… If the car never enter the checkpoint with daytime licence paid, no refund…

    4. Must present Malaysian address in order to buy a car… If failed to present Malaysian address, no rebate or discount given…

    5. Introduction of new colour of number plate or reuse the red plate (OPC)…

    Just my 2 cents because car is a necessity for me to go to Malaysia…

    • ang

      aiyo, then take bus in to malaysia and buy a malaysia car. If everything cater to individual, then will need many schemes.

  • Peter wanted you to know that the articles you write are the best and very informative. Keep it up.

    • Peter Lin

      I don’t know if this is meant to be sarcastic or not, but it is extremely humbling to hear from such a blogging legend.

  • David

    If you renew your COE, don’t forget you will lose the PARF rebate (50% of ARF paid). That is also $$$ too!

  • Seetha Sharma

    My car’s COE expires Jan 2017. I am thinking of renewing COE for 5 years. I checked on Onemotoring site (http://www.onemotoring.com.sg/publish/onemotoring/en/lta_information_guidelines/maintain_vehicle/coe1.html) and there it says the following about 5 year COE:

    For 5-Year COE Renewal

    1) Category C vehicles with 5-year COE that had expired before 25 Feb 2013, and Categories A, B and D vehicles:

    The 5-year COE is non-renewable. You must deregister the vehicle upon the expiry of the 5-year COE.

    2) Category C vehicles with 5-year COE that is expiring on or after 25 Feb 2013:

    A 5-year Category C COE that is expiring on or after 25 Feb 2013 is renewable. However, all renewals can only be for a 5-year period, subject to the vehicle’s statutory lifespan.

    So, it looks like even if you renew the COE for 5 years, you can still renew it further after the 5 years are over. Or am I reading this wrong?

    • Hi Seetha,

      The scenario you mention applies only to Category C COE – Goods Vehicles and Buses.

      It says quite clearly in Point 1 you posted – The 5-year COE is non renewable for Category A, B and D vehicles.

      • Seetha Sharma

        Knew it was too good to be true 🙁 thanks for clarifying for me. I missed that point even though it was pretty clear as you say.

  • JackyLam

    Hi Peter,

    My car’s COE is going to expire on 20th March this year. I have a few questions and hope that you can help to answer.

    1. Can I renew my COE one day before expiry date of the current COE? If so, which COE price of PQP month will be used?

    2. Will the new COE starts from the date that I renew my COE?

    Thank you.

    Jacky

    • Hi Jacky, thanks for your question.

      1. As long as you apply to renew your COE in the month of your expiry,the PQP rate for the month of expiry (March, in your case) shall be used. In fact, even if you apply in the 1 month grace period after the COE expiry date, the PQP rate for March will still be used. But if COE has expired, there will be a late fee penalty.

      2. If you apply to renew your COE in March, your new COE will start on the day after your COE expires. In your case, this would be 21st March.

      For more information, please follow this link: http://www.onemotoring.com.sg/publish/onemotoring/en/lta_information_guidelines/maintain_vehicle/coe1.html

      • JackyLam

        Hi Peter,

        Thank you for your prompt and detailed info, It is very useful for me to maximize my current COE and to plan for my COE renewal.

        Best regards,

        Jacky

  • sh aw

    Peter, thanks for the great article! I have two questions to ask here

    A. If I renew my COE with another 5years, do I also lose the entire PARF amount, just like I would if I renew with a 10years COE?

    B. If I deregistered my car after 5 or 10 years renewal, is there no scrap value for the car at all?

    Thanks

    • Thanks for your questions!

      A. Yes, regardless of whether you renew the car for 5 or 10 years, you will lose the PARF rebate. The PARF rebate is based on the age of the car at de-registration. As long as the car is above 10 years old, there is no PARF rebate.

      B. The “scrap value” of a car is really the combination of COE and PARF rebates. As stated, there is no PARF rebate if you renew your COE. If you de-register your car before your renewed COE expires, you will still be eligible for the COE rebate.

      For more information, do check out this link: http://www.onemotoring.com.sg/publish/onemotoring/en/lta_information_guidelines/de_register_a_vehicle/PARF_COE_Rebates.html

  • Jivarani Govindarajoo

    Peter, can you cash out the PARF rebate if you are not planning to get a new car after deregistering the car?

    • Hi Jivarani,

      Yes, from 2008, you are now able to encash your PARF rebate when you deregister the car. You will first need to settle any outstanding matters on the vehicle with LTA and then have the car scrapped or exported. More information can be found on the ONE.MOTORING website. Hope this helps!

  • B C Eng

    If at the end of 10 years, I renew my car’s coe for another 10 years, and assuming I scrap the car at the beginning of the 6th year, will I get a rebate for the remaining unexpired 5 years of coe? Tks

    • Hi B C,

      Yes, you will get a pro-rated COE rebate for the months and days remaining on your COE. For the specific method to calculate how much you will get back, do go to the ONE.MOTORING website.

    • B C Eng

      Hi Peter, thanks for your quick reply.

  • Risdian Isbintara

    Thank you Peter. This article is very useful. I will have a “car decision” to make soon.

  • WanWan

    Hi Peter. Thank you for your article.

    Would I be able to renew my COE and convert to a weekend car plate instead?

    • Hi WanWan, if you are renewing your COE, there is no real benefit to converting from a normal car to a weekend car. Since your car will be older than 10 years, you will only enjoy road tax rebates of up to $500 a year under the Off-Peak Car Scheme.

  • S S MURTHY

    Dear Peter,
    Your advises are crystal clear for any layman. Thanks for addressing the issues in the right perspective. My car is going to complete 10 years in about 7 months & am considering to renew the COE for the next 10 years, as I have hardly driven about 50,000 Km only & touch wood the car is in very good condition. I understand the road tax will be increased by 10 % per year with a cap of 150% at the end of 5 years & will remain the same for the following 5 years.
    The current PQP for the category A cars is about $46,000 which I am willing to pay to keep it for the next 10 years. But I am expecting it to drop further, with my gut feeling & wait until come Aug/Sept. The PQP may be even lower.
    Now, I am paying the annual road tax of about $ 700/= which will gradually go up to about
    $ 1050/= at the end of 5 years,
    Now, I am paying the 3rd party insurance of about S 600/= ONLY.
    Pls advice me whether this insurance factor will be reduced gradually down the road for the following 10 years, as the value of the asset will be lower than now.
    Not forgetting, the vehicle inspection will become an annual event & costs to be borne by us besides the general maintenance & upkeep.
    Have a nice week end & Looking forward for your kind advises to me + by & large through this media.
    Rgds,
    Murthy

  • bschew

    If my car which is a offpeak (weekend car) is due for renewal, can I maintain the same status for a 10 year renewal. If so, what is the PQP must I pay for Category A??

    • Hi bschew, strangely enough, the PQP for the Off Peak Car is the same as a normal car. However, it will still remain a OPC with all the restrictions.

      That is why it is recommended that you convert your OPC back to a normal car before renewing your COE, since it’s going to cost you the same amount.

  • Anslem86

    Hi, may i know if i buy renewed 5yrs coe car, so at the end of the 5yrs coe i will not get back a single cent? Totally dont worth a single cent after the 5yrs coe ended?

    • Hi Anslem, you are absolutely right. You are paying for a 5-year COE, so after 5 years you will have to de-register your car.

  • Iskandar Ibn Sisan

    Hi Peter, if i decide to renew my car’s COE for another 5 years, and then scrap it/deregister on the 3rd or 4th year, will i get any COE rebates? Thanks

  • jcscor

    Hi Peter,

    Thank you for the article which is very informative and helpful.

    One question from me would be whether there is any down payment requirement to renew the COE for 5 years. Thank you.

  • JM

    Thanks Peter for this informative and and easy to understand article. I drive a 2008 Lancer EX, 170k+ mileage but engine and condition is still perfect. Driven many other cars but can hardly find one with similar power, handling and comfort. In fact I treat the car better than my husband. After reading your article I am more convinced than ever that renewal is the way to go. Looking forward to reading more of your articles!