What are your options when your COE is about to expire?

When you buy your first car, the Certificate of Eligibility (COE) lasts 10 years. That might sound like a really long time, but the years start coming and they don’t stop coming, and before you know it the expiry date of your COE is already upon you. According to Singaporean law, your car must be de-registered when your COE expires, as your car isn’t legally allowed to be on the road after that.

So what can you do? There are a few options for your trusty steed: you can renew the COE, sell your car, or scrap it altogether. Yes, there’s a substantial difference between the outcomes for all of them. Here’s what happens in each option.

Renew your COE

For starters, you could renew your COE, a process you should start at least 2–3 weeks before it expires, if not earlier. Why would anyone do this for a 10-year old car? Well, the upfront cost of doing so is lower overall than if you decide to buy a new vehicle. A new car means having to start the bidding process for a COE all over again, not to mention the full price of the car, more registration fees, the hassle and cost of financing a car loan…

Renewing the COE, on the other hand, requires you to pay the Prevailing Quota Premium (PQP) rather than buy a new car outright. The PQP is the moving average of the COE prices during the most recent three months. So, for example, if you paid $50,000 for your new COE some years ago but the current PQP for your car is $35,000, that’s already cheaper than what you shelled out some years ago.

Another reason you might want to renew your COE is to keep driving a car you’re familiar with, especially if it’s in good condition because you’ve kept it well-maintained all these years. (You have been doing regular maintenance, right?)

Bear in mind that you can choose between renewing for 5 years or 10 years. A 5-year renewal means you’ll absolutely have to de-register the car afterwards. If you renew the COE for 10 years, however, you will be eligible for unlimited renewals thereafter. Just bear in mind that commercial vehicles have a statutory lifespan of 10 years, so those COEs can’t be renewed any longer than that.

The main question to ask yourself is: how long do you reckon your car will last? If your car’s feeling a bit run down and might not be safe to drive for very much longer, there won’t be much point in renewing the COE. Consider as well the cost of paying additional road tax––cars older than 10 years have higher road tax rates––and the fact that your car will continue to depreciate as an asset. You will also be ineligible for a PARF rebate, which drivers only receive if the car is de-registered within the first 10 years of the car’s lifespan.

Sell your car

This is a tricky option: with an expiring 10-year COE on your hands, the big question is whether you’ll be able to find a buyer willing to take your car off your hands, and whether your car still has any value left for the secondhand market. Our guide to valuating a car will help you decide whether you want to walk down this path––or if in doubt, our sales staff are happy to advise, as we specialise in secondhand cars!

Take note: you’re not supposed to sell your car in Malaysia, either, as it doesn’t allow imported cars from Singapore.

De-register and scrap your car

If your car is too old and/or unsafe to drive, the best thing to do may be to scrap it and buy a new one. This is the option most vehicle owners in Singapore choose, even though buying a new car isn’t cheap. However, a COE rebate––which is the money you receive based on the portion of your unused COE, pro-rated to the remaining time on your COE––is an attractive option for many car owners, and the money can be put towards a new (or secondhand!) car, especially if you have some time left on the COE.

When you want to scrap the car, you’ll need to find out what its scrap value is. That’s basically the COE rebate plus PARF rebate. Alternatively, you can just calculate that with this online tool.

How can you have your car scrapped? For starters, you can drive it to an LTA-appointed scrapyard and de-register it right there with your SingPass before it’s scrapped. If you deregister it beforehand, you can have it towed there (because you’re not supposed to be driving it anymore) and show your NRIC to them.

In some cases, you might be able to export your car, depending on your car’s make and model. Car exporters will be willing to pay you more than a scrapyard would, but your car should be in reasonably good condition and there needs to be high demand for it overseas. Nothing is guaranteed here.

After all of it… lease a car?

So you’ve made a decision on what to do with your car. Maybe you’ve decided to sell or scrap it, and you need a new ride––but buying a new car is incredibly expensive. You could buy a secondhand car, or even try the potentially wallet-friendly option of leasing a car.

Whether you’re looking to lease or buy, ST Auto has some of the most competitive prices on the market! Call +65 6464 9098 or email us at enquiry@stauto.com.sg