(Photo Credit: Flickr/Kojach)
Is your vehicle’s COE expiring soon? If it is, here are four questions to ask yourself before renewing the COE of your car.
For those of you with vehicles approaching their COE expiration date, you have an important decision to make. Should you de-register your vehicle or renew its COE? Yes, it is a difficult choice, as you might have fond memories of your beloved ride. But on the other hand, it might make more sense financially to retire your vehicle. Decisions, decisions.
If you're stuck at a crossroad, ask yourself these four questions before making a choice.
1. Do I Mind Forfeiting the PARF Rebate?
If you choose to renew your car’s COE, you’ll instantly forfeit your PARF (Prevailing Additional Registration Fee) rebate.
For those unaware, the PARF rebate is calculated based on the age of your car at the point of de-registration. If you choose to renew your COE and extend your car’s lifespan beyond 10 years, you’ll instantly forfeit this rebate.
The PARF rebate can be quite substantial, as you could potentially receive 50% to 75% of your vehicle’s Additional Registration Fee (ARF) back. The earlier you de-register your car, the greater your rebate. Kindly refer to the table above to see the calculation of the PARF rebate.
2. Should I Renew for Five or 10 Years?
(Photo Credit: Pxhere)
If you are still keen to renew your COE, you’ll have to decide how long to renew it for. You have two options: five or 10 years.
If you decide to renew your COE for 10 years, you'll be required to pay the Prevailing Quota Premium (PQP) at the point of renewal. The PQP is calculated based on the average COE prices for the last three months. To view the existing PQP, you can refer to the latest COE results.
For a five-year COE renewal, you’re only required to pay half of the existing PQP. However, once you've renewed your vehicle for five years, you will not be given the chance to renew its COE again. If you are planning to buy a new car in the near future, you should consider a five-year renewal as it is a more feasible and affordable option.
3. Will My Car Last if I Renew Its COE?
(Photo Credit: Flickr/ Nicolas Lannuzel)
What’s the point of renewing your vehicle’s COE if it’s on the verge of breaking down? If your car is beat-up and you choose to renew it, you probably need to spend an absurd amount of money to keep it running. In addition, spare parts for your car could also be hard to come by as workshops tend to carry spare parts for newer vehicles.
If your car is well-maintained and still working fine after the 10-year mark, then yes, feel free to renew its COE. Otherwise the better option, both logically and financially, would be to retire it to the scrapyard.
4. Do I Mind Paying Higher Road Taxes?
(Photo Credit: LTA)
For vehicles that are 10 years and older, they are subjected to a road tax surcharge. Once renewed, your road tax will increase by 10% each year, up to a maximum of 50%.
For example, if you’re currently paying S$1,000 in road tax for your expiring vehicle, you’ll be require to pay $1,100 the next year if you choose to renew its COE. On the 12th year, you'll be paying $1,200. This 10% increment will continue until the 15th year, when the surcharge is finally capped.
Still Can’t Decide?
There are several pros and cons to weigh out before making a decision. Besides the aforementioned points, you’ll also need to consider your car’s model and make. Who knows, your car might fetch you more value if you do decide to scrap it.
If you’re still uncertain about the COE renewal process, please feel free to contact us for a non-obligation consultation. Our qualified consultants will be more than happy to assist you with any questions you might have about the COE renewal process.
If you have decided to proceed with a COE renewal, our consultants will also be able to assist you with all the required paperwork, including bank loans and the submission of the all the necessary forms.
Schedule a free COE renewal consultation session!
Read more: COE Renewal: Bank vs In-House Loan
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