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Accord Motoring is pleased to grant Singaporeans an insight into the advantages of buying a new car over renewing a COE.
29 years ago, the Land Transport Authority (LTA) instituted a quota limit to vehicles called the Certificate of Entitlement (COE) which represents the right to vehicle ownership when land transport network usage skyrocketed due to rising affluence in the city-state.
Since the Land Transport Authority (LTA) instituted a quota limit to vehicles called the Certificate of Entitlement (COE) which represents the right to vehicle ownership
Yearly Singaporeans are torn between renewing their COE or buying a new car.
A lot of factors like income state, car condition, taxes, insurance, and loans determine their choice.
A quick illustration below helps anyone chose between renewing their COE vs Buying a new car.
Renew 10-year COE for Category A car Purchase brand new Category A car
Purchase price $34,197 ** $96,999
Upfront cost $34,197 $29,100 #
Loan Amount – $67,899
Monthly installment – $966
Interest rate – 2.78%
Annual depreciation $3,420 $8,714
Rebate after 10 years – $9,860 (PARF value)
This illustration of PQP for August 2018, based on COE quota premiums from May – July 2018 shows how prohibitive it is to pay the upfront cost of renewing an existing car’s COE. Even though loans for renewing the COE are available, they carry higher interest rates compared to traditional automobile loans.
Modern cars rank higher than old cars in terms of fuel economy. Moreover, higher fuel consumption is the trademark of worn out engines. In Singapore road tax for cars over 10 years old increases at a rate of 10% per year, reaching an additional cap of 50%. Similarly, insurance premiums tend to increase for older cars, generally higher by 10-20% compared to that of new cars.
Considering car prices and COE premiums presently, the valid reason for renewing a COE is for cars in optimum condition. They must have low PARF values and the upfront cost of the Prevailing Quota Premium (PQP) isn’t overwhelming for one’s wallet. For those seeking lower upfront costs, advantageous interest rates for their car loan, and the assurance of warranties, then purchasing a new car might be the better option.
Finally, it is important to consider the state of one’s existing ride and how the car ownership fits into their overall budget. One may be able to extend the validity of their COE, but its vital that the car actually goes the distance and continues to serve them well in the years ahead? A lack of maintenance and damage through use or even accidents might adversely affect the state of the car.
About Accord Motoring Singapore
They are an automobile financing firm that believes that everyone deserves a chance at being able to get their hands on their dream cars.
Like any other major transaction, when it comes to buying a car—aside from the requisite questions concerning specific brands and makes and models—the most discerning of buyers have one all-important question: how do I get a good deal? And while it’s true that banks and agencies from whom one can file for loans abound, it’s also true that these entities offer deals with rates and conditions that—more often than not—are damaging to clients in the long run.
This is where they come in, with their mission to make automobile financing as easy as possible for everybody. How? Well, by offering unmatched affordable, practical loan interest rates coupled with competitive car loan renewal installment plans and flexible repayment options for starters.
Not only are their rates unmatched within the industry, their installment plans and repayment options are also all designed to prioritize the maximum comfort of their clients—a big plus given our current economy.
It’s no secret that the complexity of the financial world can confuse even the most business savvy of minds, especially when one takes into account all the technical jargon one may encounter, and the layers upon layers of business knowledge one needs to understand all of it.
This is where their edge over other firms comes in: an expert team of consultants made up of some of the industry’s best minds, all ready to guide their clients to make sure they get the great deals they are looking for.
Please forward all inquiries to +(65) 6469 3910
Release ID: 88929185