Certificate of Entitlement | To Renew or Not?
5 Things to Consider Before Renewing Your COE
It is important to note that there's a COE quota available for the whole country. As a car owner in Singapore, you should be aware that after five or ten years, your vehicle’s Certificate of Entitlement (COE) expires. Your vehicle COE must be renewed if you want to keep using it. This is due to the Vehicle Quota System (VQS) the government enacted to regulate the total number of vehicles running on the roads.
But, before you decide to renew your COE, here are 5 important things to consider:
1. COE Renewal Period
In Singapore, you can opt to renew your car’s COE for either 5 or 10 years by paying a Prevailing Quota Premium (PQP). PQP is "the moving average of COE prices in the last 3 months". Hence it is not compulsory to part with your vehicle after 10 years if you are still able to apply for a renewal.
5 Year COE vs 10 Year COE Renewal
However, if you choose to renew your COE after 10 years, your Preferential Additional Registration Fee (PARF) rebate will be forfeited. On the up side, there is no restriction in the number of times you can renew your COE in 10 year periods. Whereas, if you choose to buy a new car for the next 5 years, you pay only half of the PQP. But, opting for a 5-year COE renewal also means upon expiry, no further renewals are permitted and you will need to deregister your vehicle.
Either way, renewing your car’s COE is a great option if you are planning on driving it for the next 5 to 10 years.
Renewing your COE is now a breeze with the help of the internet. To do this, you'll have to access the OneMotoring website.
This website is operated by Singapore's Land Transport Authority (LTA). It deals with all things related to vehicle information and convenient digital services.
If your COE is past its expiry date, expect to be penalized with a late fee. However, suppose you still fail to renew your vehicle's COE within a month of its expiry, you will need to deregister and dispose of your vehicle immediately.
| Type of Vehicle | Late Fees |
| Motorcycles and Private Cars (up to 1,000 cc) | $50 |
| Private Cars (1,001 to 1,600 cc) | $100 |
| Private Cars (1,601 to 2,000 cc) | $150 |
| Private Cars (2,001 to 3,000 cc) | $200 |
| Private Cars (more than 3,000 cc), Company Cars, and Goods & Public Service Vehicles | $250 |
| Others | $250 |
2. Car Maintenance Costs
Another thing you should know before renewing the COE of your car is whether it’ll still be road worthy in the next 5 to 10 years. Consider the age of the car; if it’s an old car, you’ll be stuck with maintenance costs over the years, just to ensure that you can drive it on Singapore roads.
Bear in mind, it is not easy to maintain an old car with just the basic maintenance tools, and car spare parts don’t always come cheap. Let’s say, a major mechanical issue with an old car roughly costs around $1,000 a year to repair. If you are renewing your COE for 10 years, you should be ready to shell out around $10,000 for your car’s maintenance.
3. Singapore Road Tax Surcharge
Did you know that there's an additional road tax surcharge for cars over 10 years old in Singapore? The additional surcharge levied ranges from 10% up to 50% of your car’s regular road tax rate per year.
Besides that, there is also an increase in road tax cost for vehicles with a large engine capacity. Hence, these additional costs from road tax should be factored in during your consideration for whether or not to renew your COE.
4. Preferential Additional Registration Fee (PARF) Rebate
The Preferential Additional Registration Fee (PARF) rebate is the amount of money you are refunded for the reamining time of your current Certificate of Entitlement (COE).
In other words, you will receive a PARF rebate if you deregister your car before the COE expires.
If buying a brand new car breaks your budget, then you should certainly consider renewing the COE of your current car instead. Although this means you’ll lose out on your PARF rebate.
5. Getting Car Insurance
Many insurers in Singapore offer Comprehensive car insurance for cars not older than 10 years.
However, if your vehicle is older than 10 years-old, insurers will offer Third Party, Fire and Theft, and Third Party Only cover types. This is due to the fact that older cars have diminished residual value and higher risks of breaking down.
Be aware that the insurance premium for cars with renewed COE could be around 10% or 20% higher, than new or secondhand cars. But, this may not be applicable for all insurers, so it’s best to do your checks before you purchase car insurance.
Connection Between Your Car’s Market Value and COE Renewals
Basically, when the market value of your car rises, COE renewals tend to be more cost effective. The COE for high-end cars is usually about 20% of the car’s total price. Whereas for family sedans, the COE is about 60% of the vehicle’s overall cost. This is why it may be better to consider renewing your COE if you own a high-end vehicle.
COE Renewal for Weekend Car (WEC) or an Off-Peak Car (OPC or Revised OPC) scheme
Finally, you should also think twice about renewing your COE if your car is a Weekend car, or an Off-Peak car. It may not be worth it because renewing COE for usch cars requires you to pay the Prevailing Quota Premium (PQP) for your car as if it is a regular car for everyday use. You'll pay the Prevailing Quota Premium (PQP) at the same rate as regular cars, even though you have usage restrictions.
The subsidised rates of Weekend or Off-Peak cars do not affect COE renewal costs. So, just bear in mind that even after you pay the PQP, the car will still be a Weekend car, or an Off-Peak car. Therefore, ensure to weigh your options thoroughly before making a decision.
Should You Buy a New Car or Renew Your COE?
If your car is still in good condition, then renewing its COE may be a better choice. However, if it’s an aged car over 10 years old, you must be prepared to maintain the car well enough for it to be used for another 5 or 10 years.
On the other hand, if you decide to buy a new car, more costs will be involved; you will need to have your deposit ready, get a car loan, pay for road tax, purchase COE and car insurance, amongst other things.
The final alternative to renewing your COE is to de-register the vehicle. And, after you de-register it, you’ll have to properly dispose of it,
There are 3 ways you can dispose of your car, through;
- LTA-appointed Scrap Yards
- LTA-appointed Export Processing Zones (EPZ), and
- LTA Counter for cars eligible for PARF rebates as well as vehicles exported out of Singapore.
or as mentioned, you can choose any of the LTA appointed Scrap Yards to scrap your car. Either way, you can do it through a car dealer or you can do it yourself.
Bottom line is, if you don’t have the budget to start over with a new car, renewing your car’s COE is your next best option.
