Option 3: Revalidate your COE

If you are happy with your current ride and you are confident it will give you another five or 10 years of relatively trouble-free motoring, pay the PQP (prevailing quota premium) to extend the tenure of its COE.

The PQP rate for a 1,600cc car is around $20,000 now.

If you think that is high compared with last year's near-record low of below $4,000, remember that the rate will be even higher later.

So, be decisive.

It may be worth your while to revalidate, even if you have one or two years left on your current COE.

If you decide to revalidate for five years, you will pay half the PQP rate, but you won't be able to extend it at the end of the five years.

But if you extend by 10, the option to revalidate again is open to you.

Option 4: Wait and see

This is for folks with relatively new cars.

There is really no need to get rid of your car once it approaches five years.

You can use it right up to the day before it turns 10 and it won't fall to pieces (well, a few might, but let's not name names here).

There is a chance that premiums might fall in the distant future if actual demand for cars falls.

This could be because of a comprehensive and speedy public transport system.

Or sky-high pump prices, parking charges, ERP and insurance rates.

Or worsening road congestion.

Or all of these.

In which case, would you still want a car?

The writer is the consulting editor of Torque magazine.

This is an excerpt of an analysis that appears in this month's issue of Torque. Get a copy for the latest on all things on four wheels. Torque, published by SPH Magazines, is available at newsstands now.

This article was first published in The Straits Times.

For more The Straits Times stories, click here.