Can't decide what to do with your car when the COE expires? Here's what you should think about
Come March next year, Mr Danny Chua will have a tough choice to make on his Toyota Axio.
That is when his car's 10-year certificate of entitlement (COE) expires, meaning he has three options - scrap his car and buy a new one, buy a second-hand car, or renew his car's COE.
Last week, COE prices ended mostly lower with Category A closing at $48,000 and Category B at $46,229 - the first time since May that both categories fell below the $50,000 mark.
But Mr Chua, 49, a regional sales assistant manager, said it was still beyond his budget.
He said: "Right now, a new COE will cost me about $50,000 (not including cost of a new car), while renewing for 10 years will also be that much.
"It's a big amount, and with my finances a bit tight now, I may have to wait till the last minute to see if the COE drops."
He is not the only one facing such a dilemma.
According to the Land Transport Authority, there are 101,656 cars that will hit the 10-year mark by Oct 31 next year.
Here is what motoring industry experts said car owners should consider when deciding whether to buy a new car or to renew the COE:
Car owners who want to drive their cars beyond 10 years need not bid for a COE, but can simply renew their existing COEs.
They do so by paying a Prevailing Quota Premium (PQP), the three-month moving average of the respective vehicle category the car belongs to.
The December 2016 PQP is $51,271 for Category A cars and $55,187 for Category B cars.
Mr John Ling, founder of SJ Motor Enterprise, said: "If you were to buy a new car with a new COE now, it may cost you $100,000 or more, depending on the brand and model.
"Renewing, on the other hand, will cost about $50,000, with some additional costs for maintenance and servicing."
2. CAR'S CONDITION
Car owners may want to send their cars to a workshop to get it professionally assessed.
An assessment costs about $60 while revamping the system - including servicing the undercarriage, changing the rubber system hoses, carbon cleaning - can cost between $1,000 and $6,000.
Mr Joey Lim, managing director of repair workshop Harmony Motors, said maintenance of cars aged 10 years and above costs only a few hundred dollars more - not a significant increase from what a brand new car would cost.
"Cars are also generally built to last about 20 years - just look overseas. It's only in Singapore that we think they last 10 years because that's the period of the COE," he said.
3. OTHER MODES OF TRANSPORT
These can be public transport, cycling or even jogging to work.
Transport economist Michael Li, associate professor at Nanyang Technological University, switched from driving to jogging to work from his Lakeside home three years ago.
"Keep an open mind and explore a different way of travelling. You may be pleasantly surprised," he said.
Financial service consultant Tjio Liang who scrapped her car in March, also made the switch.
Ms Liang, 35, and her husband had just returned from their honeymoon and spent a lot on their home, so she decided to take public transport or Uber instead. -Additional reporting by FOO JIE YING
This article was first published on December 12, 2016. Get The New Paper for more stories.