Here's everything you need to know about COE Renewal in Singapore. Renew for 5 or 10 years? Taking the best COE renewal loan, when to renew your COE and more.
We help you renew your COE and find the best COE Loan rates in Singapore
There are three important terms you must familiarise yourself with - Prevailing Quota Premium (PQP), Preferential Additional Registration Fee (PARF) and COE Rebates. These terms will help you make an educated and informed decision when it comes to renewing your COE or deregistering it.
Certificate of Entitlement (COE) renewal ensures that you can continue driving your trusty old car. Otherwise, once your COE expires, you need to deregister your car.
COE renewal is an economical choice that involves a much lower upfront cost. You only need to pay for the Prevailing Quota Premium (PQP) to renew your COE.
PQP is the moving average of the COE prices in the past 3 months. It varies from month to month. To calculate PQP, simply take the existing COE prices of the most recent three months and find its average.
You can calculate your car's deregistration value to understand the financial considerations involved if you don't renew your COE.
Your car's deregistration value = [COE rebate + PARF rebate]
COE rebate is based off the Quota Premium paid and the remaining COE left.
Your COE rebate = [(Quota Premium Paid x Number of months left)/120 months].
Example: It is 2021. Adam has 12 months of COE left on his car. Assuming that his Quota Premium (QP) paid back in 2012 was $40,000, the COE rebate he will receive is ($40,000 x 12) / 120 = $4,000
Preferential Additional Registration Fee (PARF) rebate is based on the Additional Registration Fee (ARF) value.
Your PARF rebate = [ARF x % based on the age of your car]
ARF is a tax imposed upon the registration of your vehicle, which depends on your car's Open Market Value (OMV). A car's OMV is the original cost of production of the vehicle before surcharges, taxes and the dealer's profit.
| Age of vehicle at deregistration | PARF rebate (COE May 2002 onwards) |
|---|---|
| Not exceeding 5 years | 75% of ARF paid |
| Above 5 years but not exceeding 6 years | 70% of ARF paid |
| Above 6 years but not exceeding 7 years | 65% of ARF paid |
| Above 7 years but not exceeding 8 years | 60% of ARF paid |
| Above 8 years but not exceeding 9 years | 55% of ARF paid |
| Above 9 years but not exceeding 10 years | 50% of ARF paid |
| Above 10 years | NA |
Drivers deregister their cars if they can reap a substantial amount of returns upon deregistration. However, this comes at a heftier price tag as they need to pay more for a new car.
If your car is still in good condition, is relatively accident-free and you've been diligently caring for it, the financially prudent decision would be to renew your COE.
Your PARF car becomes a COE car. PARF cars have both PARF and COE rebates, while COE cars only have COE rebates. That's because all PARF rebates are forfeited upon COE renewal.
Thus, bear in mind that when you deregister your COE car in the future, you will only receive COE rebates.
Rising COE prices means that you need to pay a higher PQP for COE renewal, vice versa. It's best to plan ahead for COE renewal, so you can make a financially informed choice after weighing the pros and cons of keeping your car.
Renewing your COE means you forfeit any unused portion of your current COE. Keep a look out for low PQPs and renew your COE online, through snail mail or LTA's customer service centre.
You are given up till one month after your expiry date to renew your COE. Until your COE is renewed, you will not be able to drive your vehicle.
Ideally, you should renew your COE when PQP is low. Start monitoring COE prices at least three months before your COE expires. It is recommended that you renew your COE before your existing COE expires - if not you will incur a late payment fee. Do note that renewing your COE right before it expires means that you will be forfeiting any unused portion of your COE.
| Vehicle type | Late Payment Fee |
|---|---|
| Motorcycle | $50 |
| Private motor car (1,000cc and below) | $50 |
| Private motor car (1,001cc to 1,600cc) | $100 |
| Private motor car (1,601cc to 2,000cc) | $150 |
| Private motor car (2,001cc to 3,000cc) | $200 |
| Private motor car (more than 3,000cc) | $250 |
| Business service passenger vehicle (company car) | $250 |
| Goods vehicle and public service vehicle | $250 |
| Others | $250 |
There are five factors to consider when you renew your COE - PQP, forfeiting PARF and COE rebates, road tax, insurance, vehicle maintenance. If your vehicle is in good condition, it's definitely more cost effective than buying a brand new car.
We handle all the paperwork and help you renew your COE from start to finish
When you renew your COE, you must be mentally prepared to face mechanical and/or electrical issues every now and then. These issues inadvertently come with age so it's important to send your car for regular maintenance.
You have to ask yourself a series of questions before you make that financial commitment. Keep it mind that if you renew your COE for 5 years, you will not be able to renew it again once those 5 years are up.
When applying for COE renewal, you will have to decide between a 5 or 10 year COE renewal period. Ask yourself these questions to determine which is more suitable for you and your car:
5 year COE premiums are cheaper than 10 year COE premiums by half. Review the financial commitments that you have in your life to make a sound decision.
Your COE renewal repayment period also differs. Ten-year COE renewals can be repaid over seven years, while five-year COE renewals can be repaid across five years.
Do also take into consideration that the road tax surcharge for COE cars with larger engines are more significant.
If you opt to renew for 5 years, your car MUST be deregistered after 5 years. It's COE cannot be renewed any further.
If you opt to renew for 10 years, you are eligible for unlimited COE renewals thereafter.
Ensure that your car is in good condition to last you an additional 5 or 10 years. Send your car for an inspection to determine its overall condition before you make your decision.
Paying a lump sum for the PQP upfront isn't always financially prudent. There are loan options available to you but, which one do you choose?
Banks offer transparency, decent interest rates and do not charge pricey administrative fees. Bank loans are also tedious to secure because loan eligibility is based on your credit score. Additionally, the process for approval takes a few working days.
Do note that banks don't do direct COE renewal loan applications. You will need to go through an agent.
In-house COE renewal loans offer a higher interest rate when compared to banks. It starts at 3% and can go up to 4%, depending on the loan amount and tenure. However, some exceptions include promotional interest rates (as low at 1.88%) and higher administrative fees.
In-house loans are approved faster than bank loans because credit checks are not done. Should credit assessments be done, and you have a poor credit rating, it rarely affects chances of securing your COE renewal loan.
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