Should I Renew my COE When it Expires?

[Limwsv]

  On 5/24/2015 at 5:46 PM, Agnoxis said:

To be honest, I dunno why so many are contemplating renewing COE at current levels. A brand new Honda Vezel costs close to 10k/year depreciation. You renew now, you are gonna be paying at least 7k/year depre. Have not factored in increased maintenance costs, slightly higher road tax (although fairly negligible), poorer fuel consumption of a 10yr old vehicle (not guaranteed but likely) and foregoing of PARF value. It's a no-brainer for me if it's 20% premium per year to drive a brand new vehicle.

 

Of course, if your vehicle carries sentimental value for you, then it's a different story.

 

It's like managing a business. Capital tie-up, opportunity cost of money and cashflow.

 

Renewing means only to put in a capital of 35K and no recurring expense on the cashflow. Maintenance issues are non-deterministic events that don't incur cost until they happen. And for nipon brands like honda and toyota, pretty safe bets. If unlucky, then take one time hit on cashflow to pay off . Difference in FC not significant, can only save a 100$ per month with new car.

 

Buying new means heavier capital at 50K, add monthly recurring expense of at least 1K to cashflow. Opportunity cost of loss of use of capital and cashflow multiplier effect means that real cost is higher. Return is satisfaction of smelling new plaistics, saving of 100$ on petrol and less worries about maintenance. Note that warranty is caveated, not everything is covered, especially consumables.

 

So as long as the car is in good shape with relatively good mileage for its age, does not make sense not to renew. Only people who bought into the european trends don't have this option.

[yo2020]

  On 5/24/2015 at 8:09 AM, JSTong said:

Should I Renew my COE when It expires in Aug15 this year ? I'm still in a dilemma maybe you guys can advise me. My estimated calculation is as follow for renewing my 2.0 Ltr Cat-B car for another 5 or 10 years plus if downgrade to 1.6 new Car :

 

Car Datas : Jap's brand 2.0 Ltr , Mileage : 116,000 Km , Road Tax /Year : $1,210. Other conditions : Shock Absorbers need replacement , Timing Belt needs Replacement , Front Tie-Rod need Replacement. From LTA : PARF rebate if car is deregister before 10 years : 50% of ARF value.

 

Attached is my estimated depreciation cost for Renewing 5 yrs , 10 Yrs of COE vs downgrade to New1.6 Ltr car .

• If Renewed COE for another 5 years : Only need to pay additional 35K plus repair cost about $3000. At the end of 5 years , have to scrap as COE cannot be renewed anymore. In Between before 5 years if decide to deregister then LTA will refund pro-rated COE.

 

116,000 km seems v low!! a good excuse to extend!

how much is the PARF? $12k?

[Dragonl]

  On 5/24/2015 at 8:09 AM, JSTong said:

Should I Renew my COE when It expires in Aug15 this year ? I'm still in a dilemma maybe you guys can advise me. My estimated calculation is as follow for renewing my 2.0 Ltr Cat-B car for another 5 or 10 years plus if downgrade to 1.6 new Car :

 

Car Datas : Jap's brand 2.0 Ltr , Mileage : 116,000 Km , Road Tax /Year : $1,210. Other conditions : Shock Absorbers need replacement , Timing Belt needs Replacement , Front Tie-Rod need Replacement. From LTA : PARF rebate if car is deregister before 10 years : 50% of ARF value.

 

Attached is my estimated depreciation cost for Renewing 5 yrs , 10 Yrs of COE vs downgrade to New1.6 Ltr car .

 

• If Renewed COE for another 5 years : Only need to pay additional 35K plus repair cost about $3000. At the end of 5 years , have to scrap as COE cannot be renewed anymore. In Between before 5 years if decide to deregister then LTA will refund pro-rated COE.
• If Renewed for another 10 Years : Pay about 70K plus Repair cost of 3K. COE still can be renewed at the end of the 20th year if still intend to keep the car. COE also will be refunded pro-rated if decide to deregister the car before the 20th year. also have the advantage to sell the car in the open market if COE hits north.
• For New car if willing to downgrade to 1.6Ltr car , the depreciation cost is alamost the same as paying the COE for another 10 yrs. New car will give peace of mind at least up to 100,000 km which is normally still under agent's warranty. But still have to Fork 125K and tie up with loans for about 5 Yrs at east.

 

What do u guys suggest ?

 

I believe your car has a lot of spares available. Those wears you mentioned will also appeared in new car (think VW and its clutch issue). Factoring those cost and new 10 yr coe, I believe you still have change verus getting a new car.

[Dragonl]

  On 5/25/2015 at 1:47 AM, Limwsv said:

 

It's like managing a business. Capital tie-up, opportunity cost of money and cashflow.

 

Renewing means only to put in a capital of 35K and no recurring expense on the cashflow. Maintenance issues are non-deterministic events that don't incur cost until they happen. And for nipon brands like honda and toyota, pretty safe bets. If unlucky, then take one time hit on cashflow to pay off . Difference in FC not significant, can only save a 100$ per month with new car.

 

Buying new means heavier capital at 50K, add monthly recurring expense of at least 1K to cashflow. Opportunity cost of loss of use of capital and cashflow multiplier effect means that real cost is higher. Return is satisfaction of smelling new plaistics, saving of 100$ on petrol and less worries about maintenance. Note that warranty is caveated, not everything is covered, especially consumables.

 

So as long as the car is in good shape with relatively good mileage for its age, does not make sense not to renew. Only people who bought into the european trends don't have this option.

 

"Difference in FC not significant, can only save a 100$ per month with new car." vs "Buying new means heavier capital at 50K, add monthly recurring expense of at least 1K to cashflow."

 

That additional cashflow (approx: $800 based on $100 from FC and additional $700 from paying of car loan in comparsion to what you paid for your exisiting car) can be used to upgrade upholsterly, worn parts and a new coat of parts over the period of 10 years sia.

[flashbang]

  On 5/25/2015 at 4:19 AM, Roadrunner2029 said:

Given the rise in interest to renew COE, I don't see much more discussion on car maintenance or retrofitting electronic or comfort improvements to old cars, to enhance the COE car experience.

 

Those who are renewing COE can't afford new cars, I don't think they want to put in extra money for improvements on their old car. Regular maintenance so it can last another 10 years is probably all they think about.

[Chucky2007]

  On 5/24/2015 at 5:16 AM, JSTong said:

Dear Friends,

 

I'm in big dillema as to whether to renew my COE for another 5 or 10 years. I did some calculation below please correct me if I'm wrong. I own a nearly 10 years Toyota Camry with a low mileage of about 116,000 Km , the COE will expire in Aug15. The following is my calculation :

 

If I renewed my COE :

 

1. COE price

whats your Camry mov and amount you will get back in August this year?

 

not joking or any ill intent, but I'll renew my Coe for 10 years if the amount PARF to forgo is just around 10k.

 

If Coe drop and car price drop next year, if scrap car within 1 year, will still get back 90% of unconsumed Coe, so depreciation from Aug 15 to July 16 is 17k including the forgo PARF of 10k. if scrap after 1 year, near 2 years mark, depreciation is 12k per year.. Then see how's the coe

Edited May 25, 2015 by Chucky2007

[Simpleonly]

Wah bro, u sure still can get back 100% of PARF if scrap within 1 year after renew?

 

This will be a different ball game for many , include me

 

many thanks in advance

 

  On 5/25/2015 at 11:45 AM, Chucky2007 said:

whats your Camry mov and amount you will get back in August this year?

not joking or any ill intent, but I'll renew my Coe for 10 years if the amount PARF to forgo is just around 10k.

If Coe drop and car price drop next year, if scrap car within 1 year, will still get back 90% of unconsumed Coe+10k, so depreciation from Aug 15 to July 16 is 17k, if scrap after 1 year, near 2 years mark, depreciation is 12k per year.. Then see how's the coe

 

[Chucky2007]

  On 5/25/2015 at 11:54 AM, Simpleonly said:

Wah bro, u sure still can get back 100% of PARF if scrap within 1 year after renew?

 

This will be a different ball game for many , include me

 

many thanks in advance

 

 

haha typo.. U know its typo la bed I mention its 17k depreciation.. Thanks for pointers.. Edit the initial wrong typo.

 

Anyway don't thank me.. If one chooses to take advice from forum blindly and not double check with LTA,then too bad la

Edited May 25, 2015 by Chucky2007

[Cheesey74]

  On 5/25/2015 at 11:26 AM, flashbang said:

 

Those who are renewing COE can't afford new cars, I don't think they want to put in extra money for improvements on their old car. Regular maintenance so it can last another 10 years is probably all they think about.

 

"Those who are renewing COE can't afford new cars,"

 

Your kind of mentality is so so wrong.

 

There r peeps who r prudent and THERE r peeps that r prudent.

[Solar]

  On 5/25/2015 at 1:47 AM, Limwsv said:

So as long as the car is in good shape with relatively good mileage for its age, does not make sense not to renew. Only people who bought into the european trends don't have this option.

At my place there are a couple of old w124 mercs.

The ah peks I spoke to intend to extend their cars as long as they are still able to drive.

[Limwsv]

  On 5/25/2015 at 12:10 PM, Solar said:

At my place there are a couple of old w124 mercs.

The ah peks I spoke to intend to extend their cars as long as they are still able to drive.

 

Agree. I have seen plenty of Mercs 20 years or more. My uncle in M'sia has one that is older than me and it's still running fine!

 

However, I have not seen many of older models of other eu brands, esp. the ones that appeals to yuppies.

[JSTong]

My omv value is $16,600. Parf rebate at $15,227

 

 

 

 

 

 

  On 5/25/2015 at 11:45 AM, Chucky2007 said:

whats your Camry mov and amount you will get back in August this year?

 

not joking or any ill intent, but I'll renew my Coe for 10 years if the amount PARF to forgo is just around 10k.

 

If Coe drop and car price drop next year, if scrap car within 1 year, will still get back 90% of unconsumed Coe, so depreciation from Aug 15 to July 16 is 17k including the forgo PARF of 10k. if scrap after 1 year, near 2 years mark, depreciation is 12k per year.. Then see how's the coe

[JSTong]

  On 5/25/2015 at 2:39 AM, yo2020 said:

 

116,000 km seems v low!! a good excuse to extend!

how much is the PARF? $12k?

PARF REBATE AT $15,227

  On 5/10/2015 at 7:32 AM, Boschsimon said:

 

Actually there is no right or wrong whether to renew the COE of a car or getting a new one. There are various factors to consider and one only needs to weigh all these factors including whether or not one is willing to pay more or prefer one over the others - like comfort over prices, peace of mind over risk, etc.

 

 

Things to consider

 

1. Condition of the car to renew or scarp (Repair and maintenance cost if renew)

2. Current PQP of that category (take into consideration of the forgo PARF)

3. Insurance and Road Tax (for the next 10 years)

4. Eligible for loan (New car loan or Renew COE loan - I know only May Bank can offer this kind of loan)

5. Comfort & Safety

6. Depreciation over the 5 or 10 years period

 

For new car, you will enjoy the warranty (3 to 5 years), free maintenance for a certain period (or mileage), lower road and insurance and enjoy the comfort ride.

 

For older car, you will enjoy a lower depreciation if stretched over 10 years (renew COE PQP + Forgo PARF - Increase in Road and Insurance) in a STRAIGHT LINE DEPRECIATION. Of course high maintenance cost over and more wear and tear. One thing here which I consider is good for those who renew their COE.

 

If the COE drops drastically after the third years, you can always scarp your car and get back the remaining COE and buy a new car. I suppose by then, the forgo PARF has already worth the while. As the depreciation for new car is always higher in the first three years and if you have bought a new car instead of renewing the COE of your old car, you will most likely not do anything even the COE is dropped to a lower level - you will lose more than getting a new car again.- This is only my personal opinion.

 

So in short, probably no one can have a better idea whether or not you shall scarp or renew your car COE. It is the same for trading in stocks, it all depends on your willingness and risk appetite. And how deep is your pocket.

 

Just as many said it here, know your car and follow your heart and your pocket.

 

Or the last option is to go without a car until the COE drops to a level that you are comfort to get a new car.

 

 

 

I agree with you completely...thanks

[JSTong]

  On 5/25/2015 at 11:26 AM, flashbang said:

 

Those who are renewing COE can't afford new cars, I don't think they want to put in extra money for improvements on their old car. Regular maintenance so it can last another 10 years is probably all they think about.

Bro...I can afford new car but not willing to pay for the hefty COE made in s' pore

[Boschsimon]

  On 5/25/2015 at 2:53 PM, JSTong said:

Bro...I can afford new car but not willing to pay for the hefty COE made in s' pore

Yes, I fully agree with you. Me too. Give me FIVE bro.

 

It is really shallow to think that those who intend to renew the COE for their 10 years old can not afford new car.

[JSTong]

  On 5/25/2015 at 11:54 AM, Simpleonly said:

 

Wah bro, u sure still can get back 100% of PARF if scrap within 1 year after renew?

 

This will be a different ball game for many , include me

 

many thanks in advance

 

bro..PARF REBATE or scrap value is paid only if u deregister your car before the 10th year. If u decide to renew your coe after 10 yrs there is no more PARF Rebate When u deregister the car. You can only get the prorated unused Coe. Pls take note. Already checked with LTA on this matter.

[BobbyTan_74287]

  On 5/25/2015 at 3:08 PM, JSTong said:

  On 5/25/2015 at 11:54 AM, Simpleonly said:

 

Wah bro, u sure still can get back 100% of PARF if scrap within 1 year after renew?

 

This will be a different ball game for many , include me

 

many thanks in advance

 

bro..PARF REBATE or scrap value is paid only if u deregister your car before the 10th year. If u decide to renew your coe after 10 yrs there is no more PARF Rebate When u deregister the car. You can only get the prorated unused Coe. Pls take note. Already checked with LTA on this matter.

Yes, I saw this clause :"If your vehicle is more than 10 years old, you will no longer be eligible for Preferential Additional Registration Fee (PARF) rebates."

 

And this clause: "If the COE is renewed before its expiry date, any un-used portion of the COE will be forfeited."

 

[flashbang]

  On 5/25/2015 at 12:06 PM, Cheesey74 said:

 

"Those who are renewing COE can't afford new cars,"

 

Your kind of mentality is so so wrong.

 

There r peeps who r prudent and THERE r peeps that r prudent.

 

I did not hear much talk about COE renewal in the past when COEs were much cheaper, where were those prudent people that you speak of? 10k COE renewal would equal to 1k depreciation per year only. That reminds me of a prudent guy I know who is my friend's father, who is still driving a Toyota SB_ plate car. I think he has renewed it twice which would make the car 20+ years old now. How many of you did a COE renewal in 2009 for <10k instead of switching to a brand new car? Now that a COE costs the same as the price of a brand new car in 2009, everybody thinks twice.