Ready for high COE?

[Tjkbeluga]

 

nope. not missing anything. the only consideration for renewal is you need to tell yourself you need to live with the same car for another 5 or 10 years. change any earlier then the calculation of depreciation goes out the window. i can easily afford a new car but it pains me to dump so much into a depreciating item. but then the thought of renewing and living with the same car also makes me a bit sian.. Save money la, but totally no joy.....

 

Thanks for the comment! Indeed the itch to change for a new ride is strong, but to save cost, renewing makes most sense to me if you're comfortable with the reliability of the car.

[Carer]

i am thinking hard to renew my korean 1.6L (hyundai verna) and have been doing the calculations comparing to a brand new korean. all calculations based on 10 years for variables. Pls let me know how i can further improve this simple calculation. Assumptions are that i will drive for full 10 years and that no value pegged to convenience and face value. all models compared are basic models since they are already likely to be better than my current hyundai verna

 

car and COE

renew $64k

kia forte 1.6 $110k

hyundai elantra 1.6 $100k

hyundai accent 1.4 $95k

nissan almera 1.5 $94k

suzuki swift 1.2 $93k

 

rd tax

renew $10.5k

brand new 1.6L $7.5k

brand new 1.4L, $6k

brand new 1.5L, $7k

brand new 1.2L, $5.5k

 

Anticipated Maintenance

renew $15k

brand new $7.5k

 

Insurance

renew $7k

brand new $15k

 

grand total

renew $86.5k

brand new kia forte $140k

brand new hyundai elantra $130k

brand new hyundai accent $123.5k

brand new nissan amera $124.5k

brand new suzuki swift $121k

 

 

 

 

Edited October 21, 2014 by Carer

[Allen]

 

nope. not missing anything. the only consideration for renewal is you need to tell yourself you need to live with the same car for another 5 or 10 years. change any earlier then the calculation of depreciation goes out the window. i can easily afford a new car but it pains me to dump so much into a depreciating item. but then the thought of renewing and living with the same car also makes me a bit sian.. Save money la, but totally no joy.....

who is not itching for new cars. but the thot of paying more than 30k to 40k for a bread and butter car is just ridiculous. moreover, not many pple has such ability to fork out this kind of money given the econ climate and the forever rising cost of living. so make more sense to renew coe instead.

i am thinking hard to renew my korean 1.6L (hyundai verna) and have been doing the calculations comparing to a brand new korean 1.6L (hyundai eleantra). all calculations based on 10 years for variables. Pls let me know how i can further improve this simple calculation. Assumptions are that i will drive for full 10 years and that no value pegged to convenience and face value.

 

car and COE

renew $64k

brand new $100k

 

rd tax

renew $10.5k

brand new $7.5k

 

Anticipated Maintenance

renew $15k

brand new $7.5k

 

Insurance

renew $7k

brand new $15k

 

grand total

renew $86.5k

brand new $130k

 

 

 

 

your calculation is based on the assumption that you paid everything in full without loan.

if taking loan, then should include HP interest.

and the initial outlay

[Roh96]

Up to individual preference lah, no right or wrong.

 

For me, if I choose to renew, I will renew with 10 yr. If the intent of renewing is to save cost, then 10 yr PQP make more sense.

 

My rule of thumb is simple, if the cost of renew plus lost of parf is half that of a new car of same class, I will go for it.

 

 

[Vyeron]

i am thinking hard to renew my korean 1.6L (hyundai verna) and have been doing the calculations comparing to a brand new korean. all calculations based on 10 years for variables. Pls let me know how i can further improve this simple calculation. Assumptions are that i will drive for full 10 years and that no value pegged to convenience and face value. all models compared are basic models since they are already likely to be better than my current hyundai verna

 

car and COE

renew $64k

kia forte 1.6 $110k

hyundai elantra 1.6 $100k

hyundai accent 1.4 $95k

nissan almera 1.5 $94k

suzuki swift 1.2 $93k

 

rd tax

renew $10.5k

brand new 1.6L $7.5k

brand new 1.4L, $6k

brand new 1.5L, $7k

brand new 1.2L, $5.5k

 

Anticipated Maintenance

renew $15k

brand new $7.5k

 

Insurance

renew $7k

brand new $15k

 

grand total

renew $86.5k

brand new kia forte $140k

brand new hyundai elantra $130k

brand new hyundai accent $123.5k

brand new nissan amera $124.5k

brand new suzuki swift $121k

 

 

 

 

 

Not trying to troll but..the smile and joy when receiving new car, pricess

Also need to consider what new cars may offer like better space, features, safety equipment etc.

[Kangadrool]

 

Most people will not renew COE for the fact that most buy

 

1. according to the herds (resale value blah blah...)

2. big body with small/underpowered engine (want face, physical presence. But, sooner will outgrow it and dying to change any moment the COE drops)

3. unwilling to pay for maintenance. Rather pay monthly installments with "warranties" and possibly "free" (packaged into sale price) servicing.

 

Up to individual preference lah, no right or wrong.

 

For me, if I choose to renew, I will renew with 10 yr. If the intent of renewing is to save cost, then 10 yr PQP make more sense.

 

My rule of thumb is simple, if the cost of renew plus lost of parf is half that of a new car of same class, I will go for it.

 

 

 

[Doppel]

Hello everyone,

 

I seldom post on MCF but have been an avid reader (almost daily) on all topics.

 

This thread of COE renewal is indeed very interesting, on how the dynamics of COE renewal vs. new car have changed over the years. If I may explain further:

 

On 26 February 2013, MAS reintroduced car loan restrictions, limiting loans to 40 - 50% of the total car purchase price, and the loan tenure is capped at a maximum of five years.

 

Prior to this, it was unfettered 100%, 10-year loan; in fact, I was told that you could even get "paid" to buy a new car (obviously, you do not get paid but you just take an upfront advance against your car loan).

 

Therefore this created unbridled demand for COE when quotas were low; coupled with the low interest rate environment, everyone had a field day buying new cars. And when COE goes even higher, you can trade up, maybe get some money back and go for a newer model, i.e. it was a Ponzi scheme based on the assumption of runaway COE quota premiums.

 

Now with the loan restrictions in place, the 50% down payment on a $120,000 "bread and butter" car becomes a major consideration for most people; coupled with the maximum loan tenure of five years, it is an even more financial challenging to "own" a car.

 

This 50% down payment is a game changer: for an average car owner like myself, I have two options after ten years, assuming that I would like to continue driving:

 

1. Scrap my car and get back my PARF;

2. Together with 1., cobble together 50% down payment for a new car;

3. The loan cycle starts again.

 

OR

 

Use the 50% down payment to pay for COE PQP, drive for another ten years, and I stop the loan cycle too.

 

I am more inclined to choose the second option, because for the same money (COE PQP plus forfeited PARF), a replacement car of the same category would easily cost double of this; more importantly, I also think it is financially more prudent.

 

Not forgetting to mention that, on 26 February 2013, LTA also introduced a multi-tier ARF system compared to the previously flat 100%; for OMV of $20K up to $50K, ARF is now 140%, and above $50K, a staggering 180%! Furthermore, with the low COE quotas available for the past few years, car distributors have increased their gross margin per car substantially to cover for their fixed overhead costs.

 

All in all, it makes buying a new car rather financially untenable.

 

Of course, drive new car is definitely more "shiok", fewer maintenance problems, etc; but all cars are mechanical things, if you take care of it well with regular maintenance and sensible driving habits, I am confident the so called COE cars are road worthy.

 

Sorry for the long post; but do you really want to be tied down financially to a car loan forever?

 

 

[Enye]

wah if big majority renew at prevailing PQP

 

LTY would be very happy because instead of COE tsunami and watching prices fall

 

he would have COE prices maintaining at current levels and exceed his KPI

 

[Sdexxxxd]

wah if big majority renew at prevailing PQP

 

LTY would be very happy because instead of COE tsunami and watching prices fall

 

he would have COE prices maintaining at current levels and exceed his KPI

 

 

So, did those high paid scholars anticipated this trend that more people would renew PQP rather then surrender their expired COE?

 

Will this lead to more vehicle breakdowns and causing more jams? Most importantly, will they come up with another rule to plug the loop hole?

[Forte3737]

LTY also do not know what is in the minds of current car owners

wah if big majority renew at prevailing PQP

 

LTY would be very happy because instead of COE tsunami and watching prices fall

 

he would have COE prices maintaining at current levels and exceed his KPI

 

 

Of course NO

if so many people renew

 

will there ever be a COE supply tsunami?

 

 

[Grumpyz]

But since LTA said they are going to control the car growth population, means they foresee many who just give up their cars and LTA will just keep the COEs and release them in a more controlled manner.

Doubt we can see $50 or even $20,000 COEs again.

 

I'm currently driving a civic, expiring next year. Probably will be getting a new car as this was my dad's car and I took over when he retired. The last servicing, KM told me I may need to change some gear stuff and this will cost at least $2k, plus need to change aircon compressor as well. Goodness knows what else I need to change in the next 10 years. Hence, considering a new car instead.

 

 

[Quantum]

In my family, 1 x Getz aiming for 5yrs. 1 x Swift aiming for 10 yrs.

quite surprised your Getz still can sustain another 5 years,

[Quantum]

But since LTA said they are going to control the car growth population, means they foresee many who just give up their cars and LTA will just keep the COEs and release them in a more controlled manner.

Doubt we can see $50 or even $20,000 COEs again.

 

I'm currently driving a civic, expiring next year. Probably will be getting a new car as this was my dad's car and I took over when he retired. The last servicing, KM told me I may need to change some gear stuff and this will cost at least $2k, plus need to change aircon compressor as well. Goodness knows what else I need to change in the next 10 years. Hence, considering a new car instead.

 

 

surprised your civic near 10 years still stick KM service,

KM definitely chop you, if do those stuff outside WS, surely 50% cheaper,

actually 8th Gen Civic is the last batch MIJ, quality & reliability is perfect,

[Baal]

quite surprised your Getz still can sustain another 5 years,

Engine still good at current 113k (8.6yo) mileage. Its the GB that I may have some concerns.

 

Did a drain & refill at 104K. Will be doing it again in a months time.

[ST69]

But since LTA said they are going to control the car growth population, means they foresee many who just give up their cars and LTA will just keep the COEs and release them in a more controlled manner.

Doubt we can see $50 or even $20,000 COEs again.

 

I'm currently driving a civic, expiring next year. Probably will be getting a new car as this was my dad's car and I took over when he retired. The last servicing, KM told me I may need to change some gear stuff and this will cost at least $2k, plus need to change aircon compressor as well. Goodness knows what else I need to change in the next 10 years. Hence, considering a new car instead.

 

 

 

Yeah...i had an Odyssey. Taken care of it very well, fully svc by KM from day 1. No repairs needed for 8+yrs & wanted to extend COE too. Then things start to go 1 at a time on 9th yr. All the shocks need to change. Starter died. Power steering leaking. Engine mounting also going. Then GB start to give problem. Must also do engine overhaul. Can't imagine after I changed all these what else will go. Decided to scrap it & enjoy a new ride with new technology & worry free.

 

It was a good car, just that nowadays, the lifespan of parts seem much shorter (all MIC parts) & the repairs are expensive.

[Hosaybo]

That is why there are risk for renewing coe.... if after coe renewal all the problems start surfacing, repair will be expensive.it is a gamble to certain extend.

[Powxus]

That is why there are risk for renewing coe.... if after coe renewal all the problems start surfacing, repair will be expensive.it is a gamble to certain extend.

 

It depends. My neighbor is driving a G9 Toyota Corolla which is easily more than 15 years.

[Roh96]

Wear and tear plus repair is part and parcel lah. It comes as a cycle, once cleared the car will be good to drive again.

I had my fair share when my car reach >100K mileage and close to 5th yr mark. Usual stuff like shock, mountings, belts, steering rack. I recog another wave will come when it reaches 10th yr or 200K mileage.

 

That is why there are risk for renewing coe.... if after coe renewal all the problems start surfacing, repair will be expensive.it is a gamble to certain extend.