(Photo Credit: Business Times)
Whether you're talking about your car or that slip of paper that costs tens of thousands, you won't want to risk a misstep. It's a daunting task, so here are the things you need to know to make a well-informed decision!
Cost of renewing COE
Firstly, when you're renewing your COE at the end of your car's 10 year cycle, you don't need to bid for a COE. Instead, you pay for something called the Prevailing Quota Premium (PQP). How the PQP cost is determined from the moving average of the COE prices of the past 3 months. This means that the PQP will vary every time.
When should you apply?
With that said, you might think about renewing your COE when the cost of the PQP is preferable. Well, if the COE renewal is made before the month that your COE expires, the PQP will be determined by the date you renewed your COE. The new COE will start from the 1st of the following month from the PQP month. Let's say you renewed it months before expiry. What happens to the balance of the current COE? Well… It'll be forfeited.
Besides that, any COE rebate from any lay-up period during the COE validity period will also be forfeited when you renew your COE. Make sure the PQP price you're getting is worth the amount of COE you're forfeiting!
Should I renew my COE for 5 or 10 years?
For a 5 year COE, you'll need to pay half of the PQP. While the savings are obvious, it's important to note that once you renew your car for 5 years, you're not going to get the chance to renew that car again. It's an odd privilege to renew your car again and again that's reserved for people that renewed their COE for 10 years. If it's a family heirloom that's as old as you are, or something that you can't bear to lose now, don't go for the 5 years or you'll make someone cry.
Getting a Loan
You can't go to a bank directly to get a car loan for renewing your COE, as a loan can only be approved when there is a sale and purchase. To get a COE renewal loan, the only way is through a company that can assist you with the process, including representing you to get a loan from your preferred bank.
Depending on whether you are renewing for 5 or 10 years, you may get up to 100% loan, with a repayment period of up to 7 years. As interest rates fluctuate, it is advisable to get the consultant to source for loan quotes from multiple banks in order to get the lowest interest for you.
Before you consider renewing your car, there are a few things you have to take note of. When you renew your COE at the end of the 10 year cycle, you will also lose your Preferential Additional Registration Fee (PARF) rebate. Your vehicle's PARF value is determined by your Additional Registration Fee (ARF). Here's a handy chart to calculate how much we're talking about.
(Photo Credit: One Motoring)
You can factor this in to your vehicle's depreciation like this:
Wear and Tear
Before you decide to invest in another 5 to 10 years with your car, make sure it can live through it first! You car would undoubtedly have its fair share of wear and tear, and one important indicator would be it's mileage. Singaporean cars usually run through an average of 20,000km per year. At the end of their COE term, it should amount to about 200,000km. That's considered high! You probably need to replace parts to help you car run smoothly, or to run at all. Head to your mechanic to find out what you need to change!
How can I pay?
The application to renew the COE must be received by LTA within one month after the expiration of the current COE. You can pay by these methods:
You can pay online here daily from 6am to midnight. You'll need an Internet Banking Account with either of the following banks:
- Standard Chartered Bank
Do make sure that your payment is within the set payment limit by the bank!
You'll have to do this one at least 2 weeks before your COE expiry date. It should include the application form and payment. It should reach the LTA before the end of the month that the PQP is applicable, and the application date would be the date that LTA received it.
This means that, depending on which is earlier, the PQP will be that of the application date or the COE expiry date.
At the LTA Customer Service Centre
On or before the COE Expiry Date:
You can pay by cheque, cash or cashier's order. You can also pay by Diners Club Card or NETS if it's within the daily transaction limit that's set by the bank. However, if you choose to pay by cheque, do note that the COE will only be renewed on the date of the clearance of the cheque.
After COE Expiry (Within 1 month from the expiry date of the COE):
(Photo Credit: OneMotoring)
After the COE has expired, you can only pay by cash, cashier's order or NETS. You'll also need to cover late payment fees.
To renew COE or to scrap your car?
Based on the most current COE and used car prices, Motorist.sg offers a free consultation to advise you on the pros and cons of renewing your COE vs scrapping your expiring car. If you have decided to renew COE, we can also assist you with the entire process, including sourcing for the lowest interest rates, applying for bank loan and settlement of all the paperwork.
Make an informed decision, and drive smart!