A few things you should know before renew your COE Loan
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Unfortunately, COEs are not forever and they expire. Thanks to higher prices of vehicles and higher taxes owning a car in Singapore becomes extremely expensive. The government has opened the procedure a little and COE revalidations are fact. People are able to revalidate their COE and the procedure is cheaper than acquiring a new one. Some people even withdraw a COE loan in Singapore to finance the expense.

In Singapore 15% of people will have to make a decision about renewing a COE – these are more than 100,000 cars. The data shows that 7 cars out of ten are new one but three of them are more than 8 years old. When the COE expiry deadline comes, the owner has to already take a decision.

What are you going to lose if you renew your car’s COE loan?

The scrap value is the sum of money you will acquire when you deregister your vehicle. But if you apply to renew your car’s COE, the government cut this amount completely and you won’t get it. The scrap value is officially called PARF rebate and it might reach 50% of the value of the car. For example, if you have paid $60,000 for a new car, then you will have the chance to get back $30,000 if you deregister it. Of course, if you spend less on a car, you will get less. For example, if you spend $20,000, you will get $10,000. But if you want to proceed to drive another car, these $10,000 won’t cover all expenses. In other words, sometimes it is better to think a little, before jumping into fast money. If you apply for a COE renewal you will lose the PARF rebate, but you will spend less and you will go on driving. Singaporean government prefer to encourage deregistering of old cars and that’s why they have created PARF rebate.

What are additional taxes for cars older than 10 years?

Every car owner has to pay a car road tax. If your car is older than 10 years then you have to pay a little higher road tax. The difference might be from 10% to 50% as the size is defined by the capacity of the engine. For example, after 10 years birthday of your 2,362cc engine, you will have to pay around $200 more. Every year the tax increases.

What type of COE I can renew?

Not every COE can be renewed. For example, 5-years COE is more affordable but when they end you can’t apply for renewing. That’s why 10-year COE is always a better option. If you are driving a commercial vehicle have in mind, that their lifespan is 20 years only.

COE car loan

What about the depreciation of my car after 10 years?

We have already known that COE renewal is cheaper than buying a new car and new COE. Another advantage is that the first 10 years new cars depreciate extremely fast. When they reach a certain level their depreciation slows down. Imagine that you have spent $115,000 for a car. When we apply a formula where ARF is around $20,000 then it appears that the annual depreciation before its 10th birthday is $10, 000, after its 10th birthday it drops to $6,000.It’s worth, even if you lose your PARF rebate from $10,000.

How can I finance my COE renewal?

Most people don’t have saved money, so they need a loan. Having a and renewing a COE loan in Singapore, from Coecarloan.com.sg, for example, is a common practice. If you search carefully, you will find offers for COE loan with 3%-4% interest rate. Loan approval for this type of loan is easy so you don’t have to worry too much. Usually, the time for COE car loan is given for 10 years or less.