8 Common COE Renewal regrets and why you should sell your old car
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Low COE premiums will tempt you to take a COE renewal loan to renew your COE. But consider selling your car instead. Here are 8 reasons why.

Category: Car Ownership Advice

Being able to do your COE renewal online has become an easy way for drivers to extend their relationship with their car. However, some drivers regret going for COE renewal because there's a dreadful financial commitment that comes with maintaining an old car - when they could have sold it away and used their PARF rebate to buy a newer car instead.

Here are the 8 most regrettable things about COE renewal:
  1. No more PARF rebates
  2. Paying higher road tax
  3. Spending more on fuel
  4. Reliability issues and repair costs
  5. Difficult to source for repair parts
  6. Increased number of safety issues
  7. Missing out on new cars and new features 
  8. Pricier comprehensive car insurance

No more PARF rebates

Cars that are less than 10-years old are eligible for a PARF rebate when you deregister them
When you deregister your car before it hits the 10-year mark, you'll receive a Preferential Additional Registration Fee (PARF) rebate of 50% of the Additional Registration Fee (ARF) you paid when you bought your new car.

If you keep your car beyond the 10 years, it means you're forfeiting your PARF rebate. For cars with a high Open Market Value (OMV), this can equate to a substantial amount that you'll forfeit. Find out other differences between PARF cars and COE cars.

Suppose you own a Mercedes-Benz E200 Exclusive with an OMV of $57,519 and an ARF of $75,534. If you opt for COE renewal after ten years of ownership, you will be forfeiting a PARF rebate of $37,767, which more than enough to cover the COE of a new car.

Not familiar with all the jargon? We break down OMV, PARF and COE rebates for you.
Paying higher road tax

An additional surcharge is levied on the road tax of cars that are more than 10-years old at 10% increments per year (capped at 50%)
Drivers with cars that are 10 years old and above will need to pay an additional road tax on top of its current road tax.

The current surcharge stands at an additional 10% of your current road tax, and it increases by another 10% every year (capped at 50%).

For instance, the same E200 with a 1,991cc engine capacity will be liable for road tax of $1,202 per year. On the 11th year, the amount increases to $1,322. It hits the maximum chargeable amount on the 15th year, which is $1,803!

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Spending more on fuel

With an older car, you will be visiting petrol stations much more often
Drivers who choose COE renewal due to low PQP rates sometimes overlook their car's higher fuel consumption.

Even with regular servicing, a car's mechanical parts will naturally be subjected to the effects of wear and tear - resulting in a power loss and increased fuel consumption to produce power.
Reliability issues and repair costs

Older worn out cars might require costly and time consuming repairs
Think of your car parts like your limbs and organs. With age, it becomes more costly and troublesome to repair.

Choosing to renew your COE means being prepared to deal with reliability issues like replacing car parts or sending it for regular servicing. Furthermore, you don't have that 'new car warranty' to help you out financially.
Difficult to source for repair parts

There's a good chance that most stores no longer have parts for older cars readily in stock, causing much inconvenience
If you're renewing your COE, you'll also need to brace yourself for low availability of repair parts.

Since drivers prefer to scrap/deregister their car instead of opting for a COE renewal, workshops will anticipate a dip in demand for older cars' spare parts. The older and less popular your car's make and model is, the more challenging it is to find a workshop that stocks spare parts for your car. Meaning, it's going to be more costly too.
Increased number of safety issues

The newer your car, the safer your car. Simple!
The chance of having a faulty seat belt (the most basic safety component of a car) is higher in an old car compared to a new one. Furthermore, most of the older entry-level cars don't come with the suite of safety measures that new cars come with these days.

That's why older cars have higher insurance premiums, and we'll talk about that in just a bit (see last point). 
Missing out on new cars and new features

A new car usually comes packed with features that older cars don't have
New car models that come with cool new features spring up every year.

Technology has moved forward at an alarming rate over the past few years. Features like Apple Carplay, Android Auto, lane assist, blind-spot monitoring sensors, traction control, forward collision sensors etc. used to be a big thing (many years ago), but now, it should come standard with most cars.
Pricier comprehensive car insurance

Getting comprehensive insurance coverage on an older car might be a monumental task
While getting a bank loan or in-house loan for COE renewal might be easy, the same won't apply if you're looking for cheaper comprehensive car insurance.

Car insurance premiums get more expensive because older cars have a higher risk factor and insurers prefer minimal risk.

Even if you find an insurer that can offer you comprehensive insurance, be prepared to fork out higher premiums. 
Here are some related articles that might interest you

Tips to get the best price when selling your car to used car dealers

7 Things to know before scrapping or exporting your car

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