A hundred thousand cars are forecasted for de-registration each year in 2016 and 2017. Compare this with 2014, where about 29,000 cars are registered, and in 2015, an estimated 57,000 cars to be registered. So with the supply of COE increasing significantly in the next two years, I dare say that we can expect at least a $10K reduction in COE prices for both CAT A and CAT B.
Should Christopher extend his 10th year old car? The biggest factor affecting his decision should be the reliability of his car. Has it clocked less than 100,000km? Have many parts being replaced already?
If the answer to both questions is no, then I think it is definitely more worthwhile to extend. If the answer is yes, then existing car might costs a lot more to maintain and down-time in workshops, and this costs can outweigh the depreciation costs of a new car (with has near-zero downtime).
In the event that the COE price plunges by a huge margin in 2016 or 2017, he can still sell off his car (and get some money back), and get a new car.
Not asking for high but consistent and sustainable returns.
Re-invest dividends for compounded effect.
Retire with a $2M portfolio, generating a 5% dividend yield i.e. $100K annually.