Are you at a crossroads, thinking about what to do with your car as it nears 10 years since you purchased it? Many car owners are in a similar situation at this moment.
The primary consideration is whether you should to pay COE PQP for your old car or purchase a new vehicle.
The prospects of getting a new car, probably of a more recent model are tempting. However, consider the current financial terrain, the rising cost of purchasing a new vehicle, tax rates and lower PARF value.
Renewing your COE seems like a more advisable option right now for several reasons. This article will explore 4 reasons why COE renewal is a more viable option than purchasing a new car.
- Renewing your COE is a More Affordable Option
From the financial angle, affordability is the most pertinent reason to opt for COE renewal over a new purchase. Renewing your COE has a lower upfront cost than buying a new car where you would first bid for a new COE. If it’s not a guaranteed bid that you opted for at higher price at the dealers’, you have an option to top up the price difference and/or wait up to 3 months, before getting the keys to your new vehicle.
When renewing your COE, you only need to pay for the Prevailing Quota Premium (PQP) that is calculated based on the average COE prices in the preceding period.
Also, remember that renewing your COE means you will forfeit your Preferential Additional Registration Fee (PARF) rebate. If you calculate the PARF and COE rebate, it might afford you the upfront down payment to a new car, depending on the brand and model.
The final decision is yours to make, but also consider the state of your current car and whether or not it can see you through a renewed COE period and won’t subject you to spending a lot on repairs.
- Comfortable Renewal Options
You can choose to renew your COE for 5 or 10 years, depending on your preference, the state of your car, and how much longer you plan to drive it.
When renewing your COE, you will have to cover the PQP payments. You will pay 50% of the PQP if you opt for a 5-year renewal term.
If you are not sure how much longer you plan to hold on to your car, it is advisable to take the 10 years renewal option.
- You can get Loans to Renew COE
Did you know that financial institutions offer 100% COE renewal loan? This loan is more comfortable than the regular car loan where you are only eligible for a car loan that is between 60 and 70% of your vehicles Open Market Value (OMV).
You also have a comfortable payment plan for COE loans depending on your renewal length. For a 5-year renewal, you have a 5-year loan repayment term. A 10-year renewal comes with a 7-year repayment term.
- COE Rebates Available After Renewal
While you might have missed out on PARF rebates for renewing your COE, you are eligible for COE rebates in an incident where you deregister your vehicle before the expiration of the term.
Your COE rebate amount depends on what remains of your COE term. For instance, if you opted for a 10 COE renewal at $50,000 and deregister your vehicle 5 years into the term, you will get a rebate of $25,000 from LTA and your scrap value as well.
Before you make your final decision, consider these options and read up a little more about renewal of your COE, to compare alongside with the payment and conditions for getting a new car, to make a better decision.