What is a COE?
Should You Renew COE or Buy a New Car?
However, renew COE and financing a new vehicle both have their respective advantages and disadvantages.
With a New Car You Can:
Enjoy a Flawless Experience for Five Years
Brand-new cars guarantee exceptional quality for less than five years. Usually, you’ll see symptoms and problems with your vehicle after half a decade. But, until then, you can expect it to function and perform at a good level.
Guaranteed Vehicle Quality and Dependability
High-quality vehicle manufacturers distributing their vehicles in Singapore guarantee full warranties and dependability for their vehicles. COE vehicles have limited warranties and car insurance because of its age, which is often more than 5 – 10 years of age.
Faultless Seats and Aesthetics
New vehicles ensure that your stock seats are as beautiful, comfortable, and textured the way manufacturers intended it to be. You enjoy the full, untainted, and unmodified aesthetics of your new car.
A Higher Resale Value in the First Week
If you’re not happy with your vehicle, you can still recoup your losses for at least 80% the original price of the vehicle, but only for the first week. If you compare it with COE vehicles, you can’t recoup your payment because you’re bound by contract to use your vehicle as the government has delivered.
But You’ll Also Contend With:
Higher Initial Prices
New vehicles are sold at global or market prices in Singapore, which make them more expensive.
Lower Resale Value In Less Than a Month
Owning a vehicle and enjoying its full, flawless features for five years is a difficult investment. In addition, you won’t have any recourses and subsidies for repairs and other improvements owning a brand new vehicle.
Use a Loan For Partial Financing
You can use a car loan to pay only up to 60% of your vehicle’s total costs. With older vehicles, you can use a COE renewal loan to pay 100% of your financing.
An Example of Vehicle Financing in Singapore
For example, you’d like to purchase a new sedan worth S$106,000. You can only finance 60% of this vehicle’s cost, which is S$63,600. Most of the time, promotions require a 0-30% down payment, an amount you can use money lenders or trade unions to secure. Furthermore, the 60% car loan has different interest rates that increases annually, which can make it more expensive — but its consistency makes it easy to plan for this risk.
When You Renew Your COE, You Can:
Enjoy Cheaper Vehicle Rates
The Preferential Additional Registration Fee (PARF) is a guaranteed sum former vehicle owners use selling their vehicles 10 years of age below. As for secondhand vehicles, these are more affordable yet more reliable (thanks to PWD oversight) than buying from used car owners. You enjoy great financing rates too.
100% Financing of Your COE With a Loan
Unlike new vehicles, you can finance and renew your COE vehicle with a 100% bank loan. In fact, many banks have special COE financial products for the convenience of customers. Now, you won’t need to get additional high interest rates financing for the remaining 40% payment when you buy a brand-new vehicle.
Gain Option to Get Rebates
Rebates are available for car owners who deregister with less than 10 years from their appointed renewal date. The rebate is higher the more years remaining you have.
Lower Depreciation Value
PARF and COE allows car owners to gain better value for their secondhand vehicles than by selling it directly to a customer. They receive higher PARF rebates if their cars are less than a decade old too.
However, It Can Also Be Problematic Because:
It Can Be Expensive As Brand New Cars
If you’re targeting premium cars, you’re going to pay as high as you would for a brand-new sedan. It’s highly likely affordable sedans see scarce vehicle stocks too. However, the price for secondhand premium vehicles are smaller in value if you compare it to a full-priced premium vehicle.
There Is No Limit To The Vehicles One Can Buy
Anyone – rich or poor Singaporeans – can purchase as many vehicles as they want with a COE. This activity can decrease the number of vehicles available with a COE on a regular basis. While the lower supply will not affect or increase the prices of the vehicles available with a COE.
People Who Need Vehicles Get Crowded Out
Disabled, elderly, and individuals who direly need vehicles get crowded out due to unregulated market and auction-oriented activities without minimal requirements to customers.
An Example of COE Renewal in Singapore
A COE sedan that costs about S$70,000 is an amount a bank can fully pay. With steady interest rates increase mapped out, the expenses you’ll incur — such as 60% bank loan closing costs you will encounter with new vehicle purchases and the initial loan application costs for the remaining 40% — are smaller in nature.
In fact, you can even use money lenders to help to renew COE loan financing once you’ve won the bidding too.
It’s Never Difficult to Finance Vehicles in Singapore
Purchasing vehicles in Singapore can be quite expensive whether it’s brand-new or a COE-registered vehicle. However, it is never difficult to finance a new vehicle when you need one as long as you have enough cash.