Every car owner at the end of the COE period will be in a dilemma, whether to renew the COE or buy a used or new car? Is it worthwhile to renew the COE? Should I buy a used car? Which one saves me more money? Will I end up spending more money on maintenance? What are the factors that I have to look at in both cases?
If you have such questions going on in your mind, then here we have prepared for you to understand and compare both cases and decide as per your wish.
1. Renewing COE
Image credit : Unsplash
The car which you own now is one among several thousands of cars of the same make which were manufactured that year. But, now after using the car nearly for a decade, you might have developed a bonding with it. It is your personal possession. You and your family will be having numerous memories associated with it, like bringing your first child from the hospital in this car, taking your child to his/her first day of school, going for a long and adventurous trip, etc. It has a significant place in your heart. It will not be that easy for you to part with it and you may prefer to renew its COE.
If you want to renew your COE, you have to pay PQP for the vehicle category. In Singapore, the right to own and use a vehicle is given by the COE (Certificate of Entitlement) for 10 years. After that, the vehicle can be deregistered or renewed by paying the PQP (Prevailing Quota Premium) for the particular category of the vehicle.
This PQP is calculated on the bidding exercise in the past 3 month’s COE prices. Every month the PQP differs. By renewing the COE, the depreciation value of the car will be lesser. As per the financing rules of the Bank, the banks will be providing 100% loan but the loan tenure would be for seven years. This is a plus point as in the case of buying a new car, the banks will be financing only 70% of the loan is granted.
A few points to be noted, in COE renewal, are Road Tax and Insurance. When you renew the COE after the 10-year period expires, the road tax increases by 10 % every year until it reaches the surcharge of 50% of road tax. As the Insurance agencies keep in mind its age and quote the price, the Car Insurance will be very high.
Usually, before the COE expires, when you deregister the vehicle, you will get a Preferential Additional Registration Fee (PARF) rebate. But if you renew the COE you have to forgo this rebate and also the COE rebate.
However well you maintain the car, there will be wear and tear. Most of the parts become outdated and suddenly some major repair comes out it would be difficult to replace the part. For a smooth running of the car, you need to shell out a considerable amount for its maintenance.
2. Buying a second-hand car
Image credit : Unsplash
But some may want to get rid of the old car and buy another car of a different make and slightly of a newer version. Sometimes buying a second-hand car will be much cheaper than the PQP of the current vehicle category that you own. But if you want a specific brand of the used car then its price will be higher than the PQP of the current vehicle category that you own.
Read More - Our Top 5 Malaysian Road Trip Destinations You Can Drive to From SG
One point to keep in mind, the second-hand car price differs depending on its make, model, year, and condition. Its depreciation value depends on all these factors. Their depreciation will be slightly higher than the depreciation of the COE renewed car. The road tax and insurance that you have to pay for used cars are cheaper than the COE renewed cars.
Easy financing is available for a tenure of seven years but the approved loan amount varies from 60% to 70%. Another advantage in this is, you can avail of COE and PARF rebates.
Image credit : Unsplash
When you buy a second-hand car, which is very old, there will be wear and tear of the vehicle as it might have been used by the previous owner. However careful you might be in choosing the vehicle and assessing its condition, still there will be some unforeseen repair and maintenance costs involved with it. You may have to run on and off to the service centre. Forget about the money that you have to shell out, the frustration that you have to face is beyond imagination.
Think about your safety, some hidden issues with the car should not put your life at stake. It is advisable to go for a used car that has been used for a shorter period. It may not have major repair problems and your experience with the existing car maintenance eases and enables you to look into maintenance aspects of the car that you would be buying. Sometimes, even though the car is old, its age doesn’t matter as it depends on how well the owner has maintained and used it. So, take it for an inspection check before buying it and this result is what matters.
Image credit : Unsplash
Owning a car in Singapore is a luxury. Whether you buy a used car or renew the COE, lots of time is to be allotted and paperwork to be done. As long as devious dealers are around to exploit you, you have to be very cautious. Despite knowing the actual condition of the car, they do not reveal the condition and sell it to you. If you buy such kind of car, you will end up only paying thousands of dollars for its repair and maintenance costs, which could be a major financial burden to you.
At BRZE, our friendly staff who are experienced in the used car business and also COE prices are available to offer you good advice. All the cars at BRZE are certified and underwent a thorough inspection check. We give priority to the customer's needs and satisfaction. You will be at peace with our fair and crystal-clear transaction. We assure you in helping you find the lowest COE loan rates. We do all the paperwork required for the transaction and make the entire process faster and hassle-free for you.
Without any hesitation, call our consultants at BRZE, now.