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How to Renew COE For My Car - Key Things to Note

How to renew COE for my car - choose to renew your COE after your COE expires by sourcing for renewal loan, interest rates, road tax, and other payment fees for a COE car.  
OneShift Editorial Team
OneShift Editorial Team
17 Feb 2022
Many people aren’t aware of this, but you can actually get a COE renewal loan to finance the full amount of your COE renewal. These loans are generally issued with a higher interest rate than new car loans, but otherwise also allow for a loan repayment term of 83 months for a 10 year renewal.

How to renew COE for my car - As a car owner, you might have experienced the dilemma of whether or not you should renew your COE once your COE expires - and if you should choose to renew your COE, what would the associated COE renewal loans, interest rates, road tax, prevailing quota premiums, and associated payment fees look like. Perhaps you might be better off if you scrap your car and embark on buying a new car. In some cases, owners renew their COE for 5 years, while others believe that renewing for 10 years is the way to go. Either way, here are some things you should consider when deciding whether or not to proceed with your COE renewal.

When Should You Renew Your COE:

How to renew COE for my car - The first thing you should understand is that once your car’s original COE reaches its expiration after 10 years, the vehicle must be deregistered and disposed of. This means that technically, you must renew your vehicle’s COE before its designated expiry date - and with that, comes the task of planning for COE renewal a few months beforehand to avoid missing the deadline.

LTA allows you to renew your COE up to one month after the expiry date of your COE, but that will come with a late renewal fee of between $50 - $250 depending on the type and size of vehicle in question. Generally, the larger your vehicle (in terms of engine capacity), the more expensive the late renewal fee. It is therefore advisable to renew your COE before your COE expires. That said, how early should one renew their COE?

Due to the fact that when you renew your COE, any unused portion of your previous COE would have to be forfeited. As such, many people carry out their COE renewal about 1 month prior to expiry, although legally, you can do so even earlier if you are willing to forfeit a larger amount of your remaining COE. Depending on the cost of the COE premium originally paid for the car, the amount you will forfeit during that final month will vary accordingly.

Financial Implications of Renewing Your COE:

How to renew COE for my car - There are a few costs involved with renewing the COE for your car and turning it into a COE car. The first and most obvious cost is definitely the Prevailing Quota Premium (PQP) that you will have to pay for your new COE term, allowing you to drive the car on Singapore’s roads for another 5 to 10 years, depending on what you decide on. The PQP is a moving average of COE prices over the last 3 calendar months, gathered through the various COE bidding exercises that occur over those 3 months. Because the PQP can vary month to month, and in some cases, can vary by quite a large amount, the PQP can look quite different from one month to the next, which also has an impact on when people decide to renew their COE - which we discussed in the previous paragraph.

Secondly, you will also want to consider the PARF rebates or the scrap value of your car that you would have gotten if you had decided to scrap the car. This amount can get quite large for higher powered or more premium cars, and so should be considered carefully. This figure is often overlooked when owners calculate the depreciation values of their COE process, and can skew the figures quite drastically when included. This is important to consider, because if you had not renewed your car and had decided to scrap the car instead, you would have gotten back a sum of money which you could have put into the downpayment of buying a new car.

Lastly, you should also be aware of related costs associated with COE cars. For starters, because cars past 10 years are considered to be less efficient and have a tendency to produce higher emissions, there is an incremental road tax structure that requires you to pay 10% increments on your original road tax each year, until a maximum of 150% in the fifth year, after which it will stay the same until the car’s 10 years is up. While this road tax figure may not matter much for a car with a small engine displacement and small road tax, it can get ridiculously costly for cars with larger engines. For example, if you were paying $3,100 / year in road tax for a Lexus RX 350 during its first COE term, that car’s road tax would cost you $4,650 / year by the fifth year of COE renewal. In contrast, the road tax paid on a 2L Camry would be $1,210 / year in its first COE term, before rising up to $1,815 / year by its fifth year of COE renewal.

Usefulness of COE Renewal Loans:

How to renew COE for my car - Many people aren’t aware of this, but you can actually get a COE renewal loan to finance the full amount of your COE renewal. These loans are generally issued with a higher interest rate than new car loans, but otherwise also allow for a loan repayment term of 83 months for a 10 year renewal. In essence then, the COE renewal process becomes a rather affordable one, as you won’t have to put up any hard cash upfront in order to put your car off the road for an additional 10 year. Yes - you’ll have to forgo your PARF rebates, but you wouldn’t need to pay a downpayment of any sort, as you would if you decide to scrap your car and buy a new car. If you’re keen to find out what sort of COE renewal loans are available, you can check out reputable auto financing options like Revo Financial to find out more.

Other Things to Note:

How to renew COE for my car - One of the common myths surrounding COE renewal is that you won’t be able to get comprehensive insurance cover for your vehicle. This isn’t technically true as there are reputable insurers out there who would be able to provide comprehensive insurance coverage. However, they do cost a little bit more on average to purchase. How much more, it all depends on the make and model of the car - so be sure to enquire about this before making a decision on whether or not to renew the COE for your car.

Although passenger cars do not theoretically have a statutory lifespan, it is important to note that unlimited COE renewals only apply for cars undertaking 10 year renewals. Cars undertaking 5 year renewals will have to be scrapped after the 5 years, with no option for further COE renewal and extension - which leads us to the last point.

If in doubt about how long you might want to renew your COE for, it is usually safer to renew it for 10 years. This is because in the event that you do not wish to continue using your car after a certain amount of years, you are entitled to scrap your car at any point, and receive a prorated rebate on the amount of COE unused. This is referred to as a COE rebate.

If you’re keen to find out more about how to handle your own COE renewal, you can visit One Motoring’s site for more details.

Alternatively, if you’d prefer a team of experienced consultants to help with the process of COE renewal right down to the COE renewal loan, insurance, and paperwork, you can check them out here.


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