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COE: To Renew Or Not

4 min read
Why it makes sense for certain car types and not others.

Your trusty ride is coming to the end of its initial COE cycle, and you’re faced with a dilemma: to renew it or not. Sentimental reasons may cloud your judgement; however, there are some practical pointers that can help you decide.

If you decide not to deregister your car before it hits the 10-year mark, you will receive a 50% Preferential Additional Registration Fee (PARF) rebate; renewing your COE after the 10-year mark will mean that you forfeit your existing PARF rebate. If your car has a high Open Market Value (OMV), the amount that you forfeit could be pretty substantial. This is because the Additional Registration Fee (ARF) is calculated based on a percentage of the OMV. For example, if your car has an ARF of $70,000, you’d be looking at a loss of $35,000… certainly something to think long and hard about. In order to minimise the losses, you may also consider renewing your car’s COE closer to the date of expiry or even on the day of expiry. In Singapore, driving a car without a COE is illegal and is punishable by law. So, remember to renew your COE on time.

If you drive a large-engine car, you are already paying a high road tax on it. When you renew the COE, that road tax amount goes up by 10% each year up to a maximum of 50%. If you enjoy driving your three-litre SUV and have been paying a road tax of $2,386, that amount goes up to $2,625 in the 11th year and reaches a top-end expenditure of $3,580 from the 15th year onwards! That could put a dent on your driving enjoyment.

Cars with bigger engines or are performance-based will require regular fuel visits, more so further down the road as the car gets older and starts losing power. As wear and tear starts to take a toll, it gets less efficient,leading to increased fuel consumption.MAINTENANCE ISSUES
A relatively new car usually has fewer issues with reliability than one that is getting on in years. Some cars hold their quality well over the years but age eventually catches up, and you’ll end up visiting the workshop more frequently in the car’s final years. That’s all good when the car is under warranty but, by now, you’d be footing the servicing bill out of pocket. If your car has been giving you problems even before the initial COE is up, then it may be wise to look for a replacement car instead of renewing the COE.

An important consideration is availability of replacement parts. The older and less popular a car model, the harder it is to source for spare parts when it comes to repairs. Workshops usually carry parts for in-demand car models; if they need to source elsewhere to repair your car, you can bet that the cost goes up.

Car insurance premiums will get more expensive the older the car gets, as old cars are considered high risk. Reliability and safety issues are bigger concerns as wear and tear creeps in. Even finding an insurer that is willing to provide comprehensive coverage will not be easy — if you manage to find one, expect to pay a pretty penny. If you wish to find out a wide range of motor insurance, why not pay AAS-Insurance Agency (AAS-IA) a visit? Members can even receive complimentary petrol discount vouchers when you successfully submitted a valid motor insurance quote request!

Renewing your car’s COE is as much an investment as when you first bought your car. The considerations may be similar but there’s more to think about when it’s an older car. So make sure you weigh your options properly, based on the above mentioned pointers as well as the yearly depression for new and used cars, before clicking on that COE renewal button.

If you are considering buying a used car, make sure you consult our Car Evaluation Service — even if you’re not an AA Member. Our diligent staff will help to uncover any hidden flaws, if any, and provide you a detailed report that contains more than a simple checklist. For more information, visit our website.

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