Should I renew my car COE in 2020?

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Should I renew my car COE in 2020?

In the midst of a pandemic and economic recession in 2020, should you be thinking of renewing your COE? Here are six things to consider.

Category: Car Ownership Advice

In the midst of a global pandemic, a looming economic recession and plenty of general uncertainty, car owners who's COE is set to expire in 2020 are certainly in a tough spot.

In more 'normal' times, a majority of these buyers will likely opt for getting a brand new or used car instead of renewing the existing vehicle's COE. Of course, there are many reasons for this. As we've explored earlier, there is certainly justification for not renewing your car's COE. But if we were to sum it down to one overly simplistic reason, its probably this - most people would rather have a newer car than an older one.

But, 2020 poses additional challenges for such drivers. With car showrooms now temporarily closed for two months, an economic recession looming and general economic and financial uncertainty in the air, taking the leap and making a big-ticket purchase like buying a new car can be incredibly daunting.

We consider six reasons it may make more sense for you to renew your car's COE.

1. Financial prudence

Renewing COE is certainly a cheaper option that buying a new car

Let's face it - no matter how you cut it, it's cheaper to renew your existing car's COE than it is to buy a new car. While the upfront payment may be more than the down payment of a new car, you don't have to contend with paying off loans for the subsequent seven years or however long your load period is.

Alternatively, you can also choose to take out a loan for your COE renewal. And for some drivers, this simple math is what really counts.

sgCarMart

Get COE Renewal Advice, Loans & Paperwork

We help you renew your COE and find the best COE Loan rates in Singapore.

2. Relatively low Prevailing Quota Premium

The current PQP rates are reasonably low enough to make it enticing to renew COE

Right now, the April PQP stands at $32,875 for Cat A, and $33,568 for Cat B. While not monumentally cheap, these are still reasonably low figures. Will COE prices fall in subsequent months (and thus PQP as well)? Honestly, it's hard to say. Indeed, some have pointed out that COE prices actually went up after the SARS outbreak in 2003 (though that is a significantly different situation from what we are facing right now).

With so much uncertainty in the market, it's impossible to definitively or accurately predict such things.

3. Low car usage

A low mileage car is more primed for COE renewal compared to a high mileage one

One of the most important things you must consider is the condition of your car. If it's spottily maintained and has high mileage due to heavy usage, then renewing your COE is just impractical.

On the flip side, if the car is of reasonably low mileage and in sound mechanical condition, then there’s no reason to fear that it's going to suddenly give way on you in the next couple of years. And, if it's any consolation, this circuit breaker period means your car is probably not moving much for two months.

4. Modern car standards

Modern car's have sophisticated mechanical and electrical systems that are generally future-proof

Modern cars are built to such high mechanical and technical standards that with the right care and maintenance, they should all easily be able to last longer than one 10-year COE cycle. Indeed, most cars in countries other than Singapore spend much longer on the road.

Also, you shouldn't be too concerned about your car's equipment suddenly becoming outdated or archaic. With sophisticated mechanical and electrical systems, modern cars are much more future-proof than before.

5. Accessibility of car parts

With the easy availability of OEM and aftermarket car parts, car maintenance and repair won't be an issue moving forward

And, if things should fail (as things inevitably do), replacement parts are easily and readily available these days. Whether you choose to visit a workshop, retailer or even shop online, OEM and aftermarket car parts will be available to you (barring for the most exotic, rare models).

And, if you're daring enough, some simple maintenance tasks can even be done yourself! There are youtube tutorials for just about everything these days. However, be sure to leave the complicated tasks to the professionals at the workshop.

6. Familiarity

Whether its simple familiarity or an emotional connection with the car, sometimes the choice to renew COE is a personal one

Look, with so much uncertainty about the economy, financial stability and even anxiety about our jobs, it's understandable that people are feeling flustered and worried about 2020, and perhaps what's to transpire in 2021 as well.

Some drivers may appreciate the familiarity of sticking with what they know and have in life, with the car being one element of that feeling of comfortable familiarity.

And, of course, some drivers may also choose to renew their car's COE because of an emotional connection to the car. To some, a car is but a form of transport. But for others, it's a passion and a way of life.

Here are some related articles that might interest you

COE renewal: What costs can you expect

COE renewal - should you choose a bank loan or in-house loan

6 things to note before you renew your COE for five or 10 years

A simple guide to COE renewal: How & when should you renew

5 cars in Singapore that are worth renewing COE for

sgCarMart

Get COE Renewal Advice, Loans & Paperwork

We help you renew your COE and find the best COE Loan rates in Singapore.