COE Car Loan Renewal

COE Expiring Soon? Here’s Everything You Need to Know About COE Car Loan Renewal

A Certificate of Entitlement (COE) is essential for anyone in Singapore to purchase or import a vehicle. You’ve gone through this tedious application process and won the COE raffle. You fully understand that you can drop your COE within five years and renew it again for another five. However, is owning your car for ten years worth the expenses you’ll pay?

About 1,280 COE applications included hundreds of renewal applications from car owners during the first quarter of 2021. In addition, data and practical knowledge show that well-maintained cars are only reliable for up to five years.

Vehicles also have continuously depreciating values each day. Is it worth ditching your old vehicle for a new one? Learn everything about it in this short guide.

What’s the Cost of Renewal Vs. A New Car Purchase?

A COE car loan renewal can cover the full COE renewal expenses drivers will face. On the other hand, a small loan can handle your new vehicle’s down payment.

You can see that a COE loan for renewal is drastically more affordable than purchasing a new vehicle. However, keep in mind that you’re paying for a used vehicle with a COE renewal. Therefore, we highly advise a deep assessment of a renewal’s pros and cons.

  10-Year COE Category A Car Renewal New Car Purchase (Category A Car)
Vehicle Price S $34,197 S $96,999
Vehicle Upfront Cost S $34,197 S $29,100 
Loan amount n/a S $67,899
Monthly installment n/a S $966
Interest rate n/a 2.78%
Annual depreciation S $3,420 S $8,714
10-Year Rebate n/a S $9,860 (based on vehicle PARF value)


Consider The Following Before Renewing Your COE

  • The Car’s Overall Condition

You never faced any issues during your car’s first year of use. However, you’re most likely to face vehicle issues by the time you renew COE. Any car mechanic in the world can tell you that five years is the optimal period to enjoy your vehicle.

On the other hand, some cars have better mechanical integrity than other vehicles. If you have no significant performance car issues, it’s worth renewing COE and paying for road tax. However, your car is a liability if it has consistently shown performance issues from its second year to the present.

  • Maintenance Costs

On average, car owners will pay a modest sum for vehicle maintenance costs. Car owners already paying a fortune for maintenance should avoid applying to renew COE.

Pay attention to your car mechanic’s advice during your maintenance appointments. These specialists have enough experience to provide you with a precise car lifespan estimate. Therefore, your maintenance specialist can save you thousands from renewal costs, road tax, and insurance premiums.

  • Existing Damages and Defects

Your vehicle’s true cost depends on its functionality. However, aesthetic damages significantly lower your car’s value too. It’s worth renewing your COE for one-off aesthetic repairs. On the other hand, repeated functionality repairs will eat your budget away.

Once again, regular maintenance will help you effectively learn about your car’s current condition. Renewing your COE will give you a vehicle. However, it isn’t worth using a car that sees frequent, costly repairs.

  • Car Model Fuel Efficiency

Some car owners luckily buy a car model with exceptional fuel efficiency. However, most cars have succeeding models with much better fuel economy. You can save hundreds from fuel consumption with a greatly-capable car model.

Therefore, cars with progressively better fuel economy than their successors are worth having your COE renewed. Otherwise, we highly advise you to buy the new model instead.

  • Available Car Specialists

Singapore has a limited number of car specialists. In addition, most of them have no expertise in one specific vehicle brand. Common vehicle models will have a huge number of specialists. However, models aged beyond ten years old might have parts and practices that car specialists have already phased out.

You might have a decently working five-year-old car without a car specialist and parts supplier to support it. Therefore, we highly advise you to avoid renewing and de-register your car instead to avoid higher maintenance costs in the future.

  • Insurance Premium Costs

Older car models get higher insurance premium rates because of their increased risk value. Five-year-old vehicles have weaker frames and safeguards than their new counterparts. Therefore, insurance companies see your aged vehicles as a costly liability.

You can renew your COE if you can handle the premium’s cost. On the other hand, we highly advise you to de-register your vehicle if the insurance premiums increase drastically.

  • Road Taxes

Your vehicle’s age will increase your road taxes because it’s an increasing liability. The government determines road taxes by your vehicle’s speed and functionality. In addition, vehicle health plays a huge role in your final road tax figure.

Therefore, you will get higher road taxes for well-maintained aging vehicles because they’re much more likely to break down than their newer and younger counterparts. On the other hand, drivers who can afford to pay their COE and road taxes can choose to keep their well-functioning vehicles.


COE Renewal Loan Sources

  1. In-House Loan

Going for an in-house COE loan is a great option. COE’s in-house covers your entire renewal costs. However, it has a high starting interest at 3-4%. Your loan tenure will likely affect your interest. Lucky customers can use the in-house financing’s promotional 1.88% interest rates with higher processing fees.

Borrowers will often get 6-12 months to pay for their COE loan completely. Plus, you won’t need high credit scores to use in-house services.

  1. Bank Loan

Borrowers with adequate to high credit scores should take advantage of bank loans because they can completely cover your COE costs. Good credit scores can give you 3-4.5% interest on your COE financing. Most banks can give you 12 months to pay your financing entirely. However, we highly suggest that drivers use COE’s in-house service if they have poor credit scores.


Best New Car Loans for 2021

Here are the best car loan rates for 2021. Keep this table handy when inquiring about new vehicle loans.

Maximum Principal Annual Interest Rate (with Effective Interest Rate) Maximum Loan Tenure
OCBC Vehicle Financing- New Car 70% of purchase or valuation price whichever is lower 2.78% (5.27% EIR) 7 years
UOB Hire Purchase Vehicle Financing – New Car 70% of purchase or valuation price whichever is lower 2.78% (5.59% EIR) 7 years
Maybank Car Loan – New Car 70% of purchase or valuation price whichever is lower 2.68% (5.00% EIR) 7 Years
OCBC Vehicle Financing – Used Car 70% of purchase or valuation price whichever is lower 2.98% (5.64% EIR) 7 Years
UOB Hire Purchase Vehicle Loan – Used Car 70% of purchase or valuation price whichever is lower 2.98% (5.98% EIR) 7 Years

FAQ Answers You’ll Want to Know

  1. What Are the Consequences of Late COE Renewal?

Car owners must pay their vehicle’s prevailing quota premium (PQP) rate price and pay late penalty fees to register their vehicle after expiry. Drivers who fail to pay their renewal fees within one month have to dispose of their vehicles.

Here’s a handy list of late fees per vehicle:

  • Motorcycle: S $50
  • Private Motor Car (1,000cc and below): S $50
  • Private Motor Car (1,001cc to 1,600cc): S $100
  • Private Motor Car (1,601cc to 2,000cc): S $150
  • Private Motor Car (2,001cc to 3,000cc): S $200
  • Private Motor Car (More than 3,000cc): S $250
  • Business Service Passenger Vehicle (Company Car): S $250
  • Goods and Public Service Vehicles: S $250
  •  Others: S $250
  1. What is PQP?

Your PQP is the COE amount you’ll need to pay to renew your COE. PQP rates use the Quota Premium (QP)’s moving average in the last three months. The prevailing quota premium does not have a stable figure. Therefore, you can budget your PQP payments a few months before your COE expires.

  1. When Should I Renew My COE?

Renew your COE a month before your license expires to avoid late penalty fees.

  1. Can I Renew My COE Earlier Than 5 Years?

You can renew your COE at any time. However, we highly advise against doing so if you direly need your vehicle because you can only renew your COE once for another five years. On the other hand, you can receive early rebates by de-registering your vehicle early because of your car’s high PARF value. However, your vehicle must comply with the PARF value requirement to receive your COE rebate.

  1. What Happens to 15-Year-Old Cars?

Any vehicle beyond the age of ten isn’t roadworthy in Singapore. Therefore, the government will collect and scrap the vehicle.

  1. COE Renewal and New Car Purchases Can Save You Money

Renew Your COE When:

  • The car still performs well beyond five years
  • Has well-trained specialists and spare part distributors available
  • Tolerable maintenance and driving quality

Buy a New Car Instead If:

  • Your car is an old model lacking manufacturer support
  • Has relatively poor fuel economy versus newer models
  • Has costly maintenance and high insurance premium
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