Should I Renew my COE When it Expires?

[Mrmilktooth]

Nowadays car loan interest rate went up to 2.8% already??

 

😅

 

not yet..

 

the 2 i checked out offer at 1.88 & 2.28%

 

[Hamburger]

 

not yet..

 

the 2 i checked out offer at 1.88 & 2.28%

 

 

has gone up since April @ 2.68%.

Edited May 27, 2015 by Hamburger

[Mrmilktooth]

 

has gone up since April @ 2.68%.

Maybe got special offer then.. Just book last week..

[13177]

 

Should be no issue. Toyota Vios Manual 2006. Other than lousy noisy insulation, still quite manageable.

Looks like most cars who got renewed for 5 years coe is Toyota cars, vios, altis or camry?! Cause i saw many of them on the road.

 

Anyway, saw one dealer selling one renewed 5 years coe atis for about 45K. I was thinking wouldn't it be cheaper to renew your current car? Let's say you pay around 30K for 5 years coe.

[flashbang]

No loan interest calculated. Includes cost of car + road tax. Excludes petrol and maintenance.

Renew 10 years COE for your Toyota Camry 2.4A

PQP (Cat B, May 2015): $72,136

PARF: $15,885

Cash Paid: $72,136

Actual Cost of Renewal: 72,136 + 15,885 = $88,021 (due to PARF forfeited)

Depreciation: $8802.10/year

Road Tax for 10 years: 1,802 + 1,966 + 2,130 + 2,294 + 2,458 x 6 = $22,940

Total Cost: $110,961 or $11,096/year

--------------------------------------------------------------------------

Buy a brand new Toyota Camry 2.5A

Price: $164,888

PARF: $15,740

Old Camry PARF: $15,885

Downpayment (50%): $82,444

Loan Amount (50%): $82,444

Cash Paid (Downpayment): 82,444 - 15,885 = $66,559

Depreciation: (164,888 - 15,885) / 10 = $14,900/year

Road Tax: 1,792 x 10 = $17,920

Total Cost: $182,808 or $18,280/year

--------------------------------------------------------------------------

Pay $7k/year more for a brand new car of the same model.

[Enye]

Maybe got special offer then.. Just book last week..

What did you book?

[flashbang]

Looks like most cars who got renewed for 5 years coe is Toyota cars, vios, altis or camry?! Cause i saw many of them on the road.

 

Anyway, saw one dealer selling one renewed 5 years coe atis for about 45K. I was thinking wouldn't it be cheaper to renew your current car? Let's say you pay around 30K for 5 years coe.

 

If you have your own car then it's always cheaper to renew your own COE. Those are probably for those who are looking for a cheap car. 45k for 5 years is only 9k/year, much better than the 11-12k/year for PARF Vios/Altis. Profit margin also better as likely they took in the car at PARF value, and PARF + 5 years COE only around 36k, giving them a 9k profit. Car is also easier to sell as buyers rather get a car with 5 years left than 5 months.

[Mrmilktooth]

What did you book?

City, Mazda 2..

[JSTong]

 

When somebody renews the COE, he is already willing to pay for the hefty COE right? Lemme point out 2 different cars, but probably similar class to compare.

 

Brand new Honda Vezel: OMV about 19k, cost about 115k, depre close to 10k/year (since you get back approx 10k at end of 10th year)

 

10year old Toyota Rush: OMV about 18k, cost to renew 65k PQP + 10k foregone PARF = 75k

 

One thing to note is that these depreciation values are based on driving till 10 years. From typical car driver behaviour in Singapore, you'll likely last 3 years before feeling itchy. For Toyotas and Hondas, the depreciation for a 3yr old vehicle is pretty close to being linear (let's give a 10% differential). Not easy to let go of a 13yr old car in the resale market so let's assume you have to scrap the Rush. So here's the depreciation after 3 yrs.

 

Vezel: 11k/year (10% vs brand new)

Rush: Get back 70% of unused COE = 45.5k, no more PARF so depreciation is 9.8k

 

Now you see what I mean when I say there's little difference in renewing COE and getting a new car? Unless you're super sure of yourself being able to last another 10yrs without changing, chances are you'll be paying a similar amount in depreciation to getting a new car. I'm sorry, but that's the way the silly car market in Singapore is now like. Thanks to the loan measures, 8-9yr old vehicles are depreciating more than brand new vehicles. One journalist I respect a lot in the automotive industry is Christopher Tan (Straits Times) and he wrote an article this year in which he claims a brand new car is the most worth it in the local market now, something I completely concur with. Look at SGCarmart, linear depreciations for most car models!

 

I find the most prudent move now, if one absolutely has to get a car, to be buying an undesirable model with 1-2 yrs COE left. Check out those old Citroens/Renaults/Alfas/Fiats, they are really pretty decent drives for the price. And hopefully, when COE moderates to a more palatable 40k or so, you can get a brand new car for under 8k/year (should be possible since they are 10k/year at the 65k COE mark).

 

I think whether to renew COE or not is an individual choice. Thread 103 by Boschsimon is a good one ...pls refer. As for me I'll go for the 5Yrs COE extension with the following reasons:

1. My 2.0 Ltr car mileage is only 116,000 KM. Another 5 years it'll only hit 180,000 km. My experience is Jap's car tend to be operationally costly after it hits 200,000Km.
2. COE i need to top up only $35k and there is no recurring payment monthly as when u get a new car. Peace of mind 35K and that's it. Depreciation though is comparable when I downgrade to a 1.6Ltr New car , I don want to spend the rest of my working life paying the car loans which seems to nvr end.
3. By the time It hits 5 years The MRT station near my area shall be ready ....time to scrap the car.
4. When we get new car we are prepare to lose money as car will always depreciate. I would rather invest in property which will give a handsome capital gain...as it appreciates with time.
5. For me a car is only to get me from point A to Point B. With the high COE think It's still cheaper taking a combination of MRT and Cab.

so yup BOschsimon(Thread 103) ...is right there is actually no rite or wrong in renewing the COE ...it's depend on the individual.

 

 

 

 

 

 

 

 

Edited May 27, 2015 by JSTong

[Hamburger]

Maybe got special offer then.. Just book last week..

 

oh wait....mine is used.

 

paisey....used car higher %

[Acema]

Actually there is no right or wrong whether to renew the COE of a car or getting a new one. There are various factors to consider and one only needs to weigh all these factors including whether or not one is willing to pay more or prefer one over the others - like comfort over prices, peace of mind over risk, etc.

 

Things to consider

 

1. Condition of the car to renew or scarp (Repair and maintenance cost if renew)

2. Current PQP of that category (take into consideration of the forgo PARF)

3. Insurance and Road Tax (for the next 10 years)

4. Eligible for loan (New car loan or Renew COE loan - I know only May Bank can offer this kind of loan)

5. Comfort & Safety

6. Depreciation over the 5 or 10 years period

 

For new car, you will enjoy the warranty (3 to 5 years), free maintenance for a certain period (or mileage), lower road and insurance and enjoy the comfort ride.

 

For older car, you will enjoy a lower depreciation if stretched over 10 years (renew COE PQP + Forgo PARF - Increase in Road and Insurance) in a STRAIGHT LINE DEPRECIATION. Of course high maintenance cost over and more wear and tear. One thing here which I consider is good for those who renew their COE.

 

If the COE drops drastically after the third years, you can always scarp your car and get back the remaining COE and buy a new car. I suppose by then, the forgo PARF has already worth the while. As the depreciation for new car is always higher in the first three years and if you have bought a new car instead of renewing the COE of your old car, you will most likely not do anything even the COE is dropped to a lower level - you will lose more than getting a new car again.- This is only my personal opinion.

 

So in short, probably no one can have a better idea whether or not you shall scarp or renew your car COE. It is the same for trading in stocks, it all depends on your willingness and risk appetite. And how deep is your pocket.

 

Just as many said it here, know your car and follow your heart and your pocket.

 

Or the last option is to go without a car until the COE drops to a level that you are comfort to get a new car.

 

 

 

 

 

Well said. I got a 06 Integra and im considering to renew even they is quite a number of stuff to repair.

Can alwasy scrap the car if COE gone down. Just the hefty 12k PARF.

[Showster]

Not a bad combination of ideas.

 

Basically the advantages are:

 

1. Can showhand and settle - no loans.

2. Can reserve loans for mortgage loans (your point 4).

3. No need to pay again all the taxes you have paid for when you bought the car long time ago. The idea is even if you consider 70K COE, the selling price is probably 120K when the OMV is maybe 20K. The other 30K are somewhat taxes, and are primarily (what I guess) the 3K difference between the annual depreciation between a new and re-registered car.

 

Disadvantages are:

 

1. More wear and tear parts which can be irritating for some (but imagine yourself being paid for tolerating minor faults)

2. Slightly more maintenance fees.

3. Slightly more petrol costs (can be 10% to 30% more) - really depends on how much you drive.

 

A modified compromise strategy is to scrap and get a one or two year old car, avoiding the first one or two years' most drastic depreciation, which might mean somebody help you pay the bulk of the registration and import taxes.

 

 

I think whether to renew COE or not is an individual choice. Thread 103 by Boschsimon is a good one ...pls refer. As for me I'll go for the 5Yrs COE extension with the following reasons:

1. My 2.0 Ltr car mileage is only 116,000 KM. Another 5 years it'll only hit 180,000 km. My experience is Jap's car tend to be operationally costly after it hits 200,000Km.
2. COE i need to top up only $35k and there is no recurring payment monthly as when u get a new car. Peace of mind 35K and that's it. Depreciation though is comparable when I downgrade to a 1.6Ltr New car , I don want to spend the rest of my working life paying the car loans which seems to nvr end.
3. By the time It hits 5 years The MRT station near my area shall be ready ....time to scrap the car.
4. When we get new car we are prepare to lose money as car will always depreciate. I would rather invest in property which will give a handsome capital gain...as it appreciates with time.
5. For me a car is only to get me from point A to Point B. With the high COE think It's still cheaper taking a combination of MRT and Cab.

so yup BOschsimon(Thread 103) ...is right there is actually no rite or wrong in renewing the COE ...it's depend on the individual.

 

 

 

 

 

 

 

 

 

[Ingenius]

[

 

Renew Camry is not COE cat A, its supposed to be Cat B Pqp price

 

 

quote name=flashbang" post="5498010" timestamp="1432726537]

 

 

Renew Camry is not COE cat A, its supposed to be Cat B Pqp price.....

 

 

Ok, quick one to compare COE renewal of 2005 Toyota Camry 2.4A vs buying a new Toyota Camry 2.5A.

 

Renew 10 years COE for your Toyota Camry

 

PQP (Cat A, May 2015): $63,444

PARF: $15,885

 

Cash Paid: $63,444

Actual Cost of Renewal: 63,444 + 15,885 = $79,329 (due to PARF forfeited)

Depreciation: $7932.90/year

 

--------------------------------------------------------------------------

 

Buy a brand new Toyota Camry

 

 

 

Price: $164,888

PARF: $15,740

Old Camry PARF: $15,885

 

Downpayment (50%): $82,444

Loan Amount (50%): $82,444

Monthly Instalment (for 60 months): $1,566/month

Total Amount for Loan (Interest Rate 2.8%): $93,986

Total Cash Paid after 5 years: 82,444 + 93,986 = $176,430

 

Downpayment Paid in Cash: 82,444 - 15,740 = $66,704

Depreciation: (176,430 - 15,885) / 10 = $16,054.50/year

 

 

--------------------------------------------------------------------------

 

 

Now we're talking a difference of 9k/year depreciation, which could almost get you a second B&B car that costs around 100k. 66k required for downpayment for a brand new Camry, which is equal to the cost of COE renewal for 10 years. COE renewal is very attractive now if your car is in good condition.

How can you compare a ten years old model to a newest model and say the former has lower depreciation so is better ?

 

Actually it is pointless to ask whether should new coe or buy new, because different people have different affordability and needs. There is no best choice or right or wrong choice. The choice lies with each individual, so how can we answer this question for others ?

Edited May 27, 2015 by Ingenius

[Battledome64]

I think renewal makes sense too.

 

But if the big Mom see everyone renewing Coe pretty sure they might provide some tweaks to sweeten it

Edited May 27, 2015 by Battledome64

[Sunset73]

Looks like most cars who got renewed for 5 years coe is Toyota cars, vios, altis or camry?! Cause i saw many of them on the road.

 

Anyway, saw one dealer selling one renewed 5 years coe atis for about 45K. I was thinking wouldn't it be cheaper to renew your current car? Let's say you pay around 30K for 5 years coe.

 

In the minds of most Singaporeans, they think that Toyota is no.1 in terms of reliability and relatively easy-to-get spare parts, especially the models you just listed. If all goes wrong, there is always our friendly neighbour just across the causeway who can supply us with what we require.

I think renewal makes sense too.

 

But if the big Mom see everyone renewing Coe pretty sure they might provide some tweaks to sweeten it

 

Maybe yes maybe no. The current trend is that for those who are renewing their COE, is for 5 years only. I would assume people who can afford to renew for a full 10 year COE, is able to downpay for a brand new car. Moreover, who can guarantee that their renewed ride can last them another 10 years? Manual transmission may be possible.. but auto.... ermmm...

 

So after 5 years, all these people who renewed die die have to scrap. LTA just need to sit and wait. No need to do anything to these owners. Because end of the long run, LTA still the winner.

 

Btw, I am one of them who will renew COE for another 5 years..

[Boschsimon]

How can you compare a ten years old model to a newest model and say the former has lower depreciation so is better ?

 

Actually it is pointless to ask whether should new coe or buy new, because different people have different affordability and needs. There is no best choice or right or wrong choice. The choice lies with each individual, so how can we answer this question for others ?

 

I do agree with you on your last point that each individual is in their best position to decide what is best for themselves, taking into consideration of all the relevant factors as well as how deep the pocket one had and willing to pay for it. Definitely there is NO WRONG or RIGHT.

 

But the main purpose of this forum is to share and discuss on topics which some fourumers may find it to be interesting or things that they are concerned about and would like to seek some advice from others.

 

With the exchanges and postings of all these, I reckon many have gained from it and at the end of the day, able to make better informed decision moving forward.

 

One good example that I gained from this forum is that I didn't know that May Bank does provide loan for the renewal COE and on other topic which I came to know a particular workshop which can provide better service at a reasonable price.

 

So I would suggest that we all continue to make this forum alive and contribute and share your experiences and information that you think you can help other fellow-forumers.

 

Thank you

[13177]

Sunset73, on 28 May 2015 - 09:09 AM, said:

Maybe yes maybe no. The current trend is that for those who are renewing their COE, is for 5 years only. I would assume people who can afford to renew for a full 10 year COE, is able to downpay for a brand new car. Moreover, who can guarantee that their renewed ride can last them another 10 years? Manual transmission may be possible.. but auto.... ermmm...

 

So after 5 years, all these people who renewed die die have to scrap. LTA just need to sit and wait. No need to do anything to these owners. Because end of the long run, LTA still the winner.

 

Btw, I am one of them who will renew COE for another 5 years..

Quite true, based on current coe price, some people might still have about 30K cash to renew a 5 year coe for their current car. And if they can afford to have cash of 70k to renew 10 year coe, they might as well use it to downpayment for a brand new car. Unless the owner really like his current car so much that he dont mind using the 70k cash to renew a 10 year old coe.

[Limwsv]

 

I do agree with you on your last point that each individual is in their best position to decide what is best for themselves, taking into consideration of all the relevant factors as well as how deep the pocket one had and willing to pay for it. Definitely there is NO WRONG or RIGHT.

 

But the main purpose of this forum is to share and discuss on topics which some fourumers may find it to be interesting or things that they are concerned about and would like to seek some advice from others.

 

With the exchanges and postings of all these, I reckon many have gained from it and at the end of the day, able to make better informed decision moving forward.

 

One good example that I gained from this forum is that I didn't know that May Bank does provide loan for the renewal COE and on other topic which I came to know a particular workshop which can provide better service at a reasonable price.

 

So I would suggest that we all continue to make this forum alive and contribute and share your experiences and information that you think you can help other fellow-forumers.

 

Thank you

 

Praise!

 

My personal view is that there are some who would prefer us to stay in a information vacuum, because their business model/mental model work best in that environment. This kind of rational, data based conversations is anathema to them as it directly threatens them.

 

Please continue to keep this kind of information sharing and correction alive. At the end of the day, how one choose to react to the COE/cars prices is a personal decision, but we all should be given the necessary and correct information to make our decisions on.