44,303 Vehicle Owners Have Revalidated Their COE Last Year – Why Should You Do the Same?

Yes, you read that right, as per the Monthly Vehicle Statistics Report released by LTA, about 44,303 vehicles were revalidated last year. That’s about 18,251 more vehicles revalidated in 2016 as compared to 2015.

You might be thinking: Why do a lot of of vehicle owners renew their COE nowadays instead of buying a new car?

Here are some of the top reasons:

1. When you scrap your car, the PARF rebate is just too small, it does not really contribute much on the hefty down payment that you have to fork out if you opt to buy a new car.

2. New car prices usually range about S$90,000 to S$120,000 for middle-of-the-market cars. The cost is twice as much as the cost of just paying the PQP to renew the COE of your current car.

3. If you diligently do the maintenance of your car, you do not have to worry about how it will perform on the next 5 or 10 years. You get to keep all the investments that you’ve put on it and still use it for as long as you want, taking into consideration that you are renewing for 10 years and not 5 years.

4. After factoring in the scrap value of your previous car (which is forgone in a revalidation), the annual depreciation will be way lower, more or less about $6,000.

5. The cost of owning a COE-renewed car is cheaper, even after you factor in road tax surcharges, higher insurance premiums and maintenance costs.

6. New car prices are expected to go up soon due to the new VES scheme.

7. If you are in a situation where you only have a few cash to set aside for the monthly installment of your COE renewal loan, you can cut down your COE renewal cost by doing instead a 5-year renewal loan, that will help you save 50% of the PQP. It’s important to take note though that if you opt for a 5-year COE Renewal, you won’t be able to renew car’s COE anymore.

8. A 10-year revalidated car is usually more saleable. Should you decide to replace it midway, you will be able to find a buyer quite easily.

9. Sometimes, it’s a matter of personal preference. It can be that owner has grown to love the vehicle and is very much satisfied with the current performance of the car – why replace it when it’s not broken and is serving its purpose?

10. You get peace of mind – you know that you can keep it as long as you want plus you don’t have to financially burden yourself by paying more than what you can afford for now.

If you are satisfied with your current set of wheels, be practical and keep what you have. Be smart and save yourself lots of $.

At Speed Credit, our friendly loan consultants will answer any COE-related questions via email or even over the phone that you may have. We are more than happy to help you from latest COE renewal dates and policies to requesting of LTA transaction pin and vehicle log card. Most major banks do not offer such services.

We provide 100% financing for your COE loan amount at a competitive interest rate and believe in delivering a great service to all our customers. Contact us today at +65 6444 4400!

Are you looking to finance your COE extension for 5 or 10 years in 2017 and is confused to choose between in-house or bank for your COE loan in Singapore? Whether it is a sports car or a Japanese sedan, you need to weight the pros and cons before you take the leap.

Stringent in loan application process

Banks are known to be particularly stringent in their loan application processes. Loan applicants will require to prepare lots of documentations and submit them online with no guidance – one missing or inaccurate document may lead to rejection of your loan application. This may result in paying a penalty to LTA for not renewing your COE before the expiry date.

It is important to note that most banks do not finance COE loan.

Self-employed applicants may also face higher risk of their loans getting rejected by banks due to insufficient proof of income.

On the other hand, when you finance your COE in-house, they do not require that much of paperwork and documents from you. Moreover, reputable companies which offer in-house COE financing like Speed Credit have friendly and experienced loan consultants to assist you in the complicated COE renewal loan process.

Interest Rates and Admin Fees

Most people have the misperception that banks will often offer the lower interest rate, this is a common mistake made when deciding whether or not to take up a loan with bank or in-house. In fact, many in-house offer a same or lower interest rate. Another factor to consider is the admin fee, you can save hundreds of dollars from admin fees if you choose to finance your COE with us.

Approval time

Approval time is crucial when you decided to renew your COE near to expiry date. Major banks and in-house have approximately approval time of about three working days. At Speed Credit, we will receive a pre-approval within one working day and also a quick overview of your loan application status. However, we recommend drivers whose COE is expiring to contact Speed Credit 3 months in advance so we could help to monitor PQP for them.

If your application is urgent, we will arrange an appointment for you as soon as possible which major banks and many in-house are unable to do.

Modes of payment

Almost all banks and financing companies like Speed Credit has different modes of payment for your COE loan instalment ranging from GIRO, cash, cheque to wire-transfer. When looking to finance your COE, be sure to inform your financer which is your preferred payment method.

Full settlement / repayment of full loan

When you are hunting for a COE loan for your beloved car, don’t forget to ask about penalties from full settlement. This is one of the questions that you should ask and make sure this is well stated in your loan agreement.

Customer Service

At Speed Credit, our friendly loan consultants will answer any questions via email or even over the phone that you may have. We are more than happy to help with from latest COE renewal dates and policies to requesting of LTA transaction pin and vehicle log card. Most major banks do not offer such services.

We provide 100% financing for your COE loan amount at a competitive interest rate and believe in delivering a great service to all our customers. Our customers rated us 4.8 stars on Facebook, head over to our page to see what our customers are saying and don’t forget to submit your COE financing application to us today.

Are you looking for a 2017 COE trend prediction?

Don’t you agree that it can be overwhelming with so much information about Certificate of Entitlement (COE) on the internet? This article is here to help you to have a better idea on what actually affect COE prices and how the trend would look like in 2017. Speed Credit receives few thousands COE renewal applications each year and we are always happy to help and advise our customers when to renew COE and help them to save with a lower possible COE premiums.

In order for us to know what affect COE prices and what to expect in 2017, we will first have to look at the COE price history in 2016.

COE price history (2016)

As you can see from the graph, COE prices were on the rise since March 2016. This was partly due to few changes in regulations.

Ease of borrowing – The Monetary Authority of Singapore (MAS) announced on 26 May 2016 that the maximum loan-to-value (LTV) ratios and loan tenure allowed for auto loans to be eased. Buyers can now borrow up to 70% of the purchase price and with a longer loan tenure of 7 years. As for private-hire vehicles (e.g. Grab/Uber), the loan amount is much higher, they are able to borrow up to 90% and with loan tenure up to 10 years.

Buyer’s name	Private-hire vehicles (e.g. Grab or Uber)
Borrow up to 70 per cent of the purchase price	Borrow up to 90 per cent of the purchase price
Loan tenure up to 7 years	Loan tenure up to 10 years

This new regulation certainly reduces the deposit required for a new car, thus created an influx of demand for COE (Certificate of Entitlement) right after this new regulation was implemented

Quota cut – The Land Transport of Authority (LTA) announced on 12 October 2016 that COE quota for November 16 to January 2017 will be reduced as much as 8%.

COE Prices increased in the following bidding but dipped after. It is important to note that this did not affect the prices as much as the easing of car loan regulations.

COE prices did not exceed $60,000 in 2016

In a nutshell, the economy and the easing of car loan regulations affect COE premiums the most compared to changes in COE quota. The low interest rate in 2016 was also one of the factors that encouraged motorists to take up a car loan.

Despite new car loan regulation and cutting of COE quota, COE premiums did not exceed $60,000 like previous years. The reasons might be due to the economy uncertainly and many potential buyers were waiting for premiums to drop below $40,000 in 2016 but it did not happen. 

COE prices in 2017 (Prediction)

Although the Land Transport Authority (LTA) announced on 19 January 2017 that COE quotas will be increased from February to April 2017, we believe COE premiums will not crash but instead come down gradually in first half of the year. As proven in year 2016, the quota will affect the most in the following COE bidding after quota announcement, but not as much for subsequence COE biddings.

Car loan regulations – The last revised of car loan regulation as mentioned earlier was implemented in May 2016, hence is unlikely that there will be more changes in the near future.

Economy outlook / Interest rate– Singapore’s economy is expected to be picking up but at a slow pace in 2017. As for interest rate, we foresee a slight increase of interest rate later this year.

Lesser COE biddings for Grab and Uber – Both Grab and Uber’s presence in the market does play a part in COE prices. Both Grab and Uber have reached a mature growth stage this year, hence it will reduce the number of bids. Speed Credit also provides refinancing services / changing of car ownerships for Grab and Uber’s drivers. Contact us for quick and easy way to refinance.

Lesser car deregistering in 2017 – What this mean is that lesser of number of Certificate of Entitlement (COE) will be back into the market for biddings.

The blue bar in above chart shows Cars (age 8 -< 9) in 2016. In other words, these are the number of cars in 2017 which are due to renew their COEs or to choose to deregister/scarp.  The chart clearly shows that the amount of COEs due to expire in 2017 is lower compared to the year 2016. At Speed Credit, we continue to see an increasing number of motorists renewing their COEs with us. Our customers believe renewing COE is still cheaper and worthwhile than buying a brand new car. Moreover, they can continue driving their beloved cars and also be able to earn extra income driving for Grab and/or Uber.

What this tells us is that there is a high possibility that quota numbers up for biddings will not fluctuate much as lesser number of people are deregistering in 2017 compared to the year 2016. In other words, there won’t be much of an increase of fresh certificates available for COE biddings, hence COE premiums will not fall drastically.

Off-Peak Car (OPC) – There have not been new incentives implemented to encourage more OPC cars in the recent years. It is unlikely that the Land Transport Authority (LTA) will encourage more OPC to be on the roads. A larger number of OPC certainly will increase the quality of life for many families while reducing the number of traffic during peak hours. However, this doesn’t solve the problem of limited car parking in housing estates. There is also a dip in a number of motorists opting for OPC as they do not see much incentives in doing so. Most people still prefer to have the freedom to fully utilize their cars. This scheme was popular in the past when COE prices were low but this scheme is losing its popularity.

This year, we anticipate that COE prices should remain stable with a mix of positive and negative factors impacting the prices and should flatulate between the $45,000 to $50,000 range.

The interest rates for COE renewals should remain relatively low in first half of the year and should not rise by much towards end of the year.

Is your COE expiring soon? Take advantage of the low interest rate and our service to monitor PQP results to renew your COE at the best time to save hundreds of dollars. We strongly encourage you to submit your loan application 3 months in advance to renew your coe at 100% COE loan amount or sign up a used car loan with us today.

We help thousands of motorists with 5 or 10 years COE renewals each year and are aware that many are confused by the complicated Certificate of Entitlement (COE) bidding systems in Singapore and how to secure a lower Prevailing Quota Premiums (PQP) rate. Over the years, we see an increasing number of motorists are choosing to sign up a COE renewal loan with Speed Credit to avoid hefty down payment required to purchase a new car.

Keep reading if you are looking to renew COE for 5 or 10 years.

Timing is everything:

First and foremost, let us help you identify which are the dates Prevailing Quota Premiums (PQP) results are released each month in 2017.

These are the actual dates for 2^nd COE bidding in 2017 and are also the dates that prices of PQP are released.

Month	Actual Dates for 2nd COE bidding
January	18 January
February	24 February
March	29 March
April	26 April
May	24 May
June	21 June
July	19 July
August	23 August
September	20 September
October	19 October
November	22 November
December	20 December

It is important to know that Prevailing Quota Premiums (PQP) is moving average of COE prices (QP) in the last three months. Tip: Lower Quota Premiums (QP) in previous months is a good indication that PQP will follow suit.

Know the choices available:

There are few choices available. If your COE renewal is due in April 2017, you may choose to renew with PQP from March or earlier (e.g. February or January). In other words, you are not allowed to renew with the PQP result released on 19 April because this is meant for COE renewals done in May.

Renewing your COE earlier could potentially save you hundreds if not thousands of dollars. In some cases, we helped motorists to renew 3 months in advance when PQP was raising drastically.

Here is the solution:

In this particular case, we will monitor PQP and hold your submitted COE renewal loan application until 22 March which is the date that March PQP result is released. This is because we have the choice to renew with February PQP if March PQP price is much higher, hence a better chance for you to renew your COE with a lower premium.

Avoid last minute submission:

If your application is submitted early, we can help to monitor PQP and assist to renew immediately with a lower price. Not only do we take care of the complicated and tedious paperwork for you, we also help you save hundreds of dollars by securing a lower PQP rate for you.

Speed Credit offers very competitive interest rate and fast approval for all COE renewals. After your documents are submitted, it only takes 1 working day to get your COE renewal loan approved. Don’t wait any longer, renew your COE due in 2017 with Speed Credit today.

Your Car Turns Ten, Now What?

Here’s a straightforward guide by RenewCOE on how to renew COE in Singapore.

Unlike buying a new car, you don’t have to participate in an open bidding for a renewal of COE.

When the COE of your vehicle is close to ten years old, you can revalidate it by paying a Prevailing Quota Premium (PQP). Otherwise, your car must be de-registered after 10 years.

COE for Private Cars

The great news: there is no limit to how many times you can renew the COE of your beloved car so long as the COE is renewed for 10 years.

The bad: If the prior COE renewal for your car had been 5 years, it has to be de-registered as further renewal is not allowed.

COE for Commercial Vehicles

Renewal of COE for commercial vehicles is subjected to the vehicle’s statutory lifespan. Therefore, only 5-year COE renewals are allowed.

COE Rebate

Should you de-register your vehicle before the expiry of its COE, you are eligible for a rebate. The amount is pro-rated to the number of months & days remaining on the vehicle’s COE, which you have paid.

COE Application Forms

It will take you 5 minutes to fill out the forms that can be downloaded here.

You’ll need:

1. The vehicle registration number;
2. The vehicle owner’s name, NRIC (Singaporean, Singapore PR and Malaysian) / Passport number and place of issue (other Foreigners) / ACRA number / UEN / LTA-issued ID (for vehicle registered under company name);
3. If the registered vehicle owner is not present, the authorised applicant’s name and NRIC number (Singaporean, Singapore PR and Malaysian) or Passport number (other Foreigners); and
4. The current COE number and its expiry date, COE rebate(s) to be used, vehicle category and its Prevailing Quota Premium.

Renew COE Online

If you have a valid Internet Banking Account (major banks), you may also renew COE Online via Onemotoring available daily from 6am to midnight.

Check COE Expiry

An important step if you want to avoid paying more.

LTA slaps a Late Payment fee if the application is received within 1 month after the expiration of the COE. You could forfeit your eligibility for renewal if the COE has expired for more than 1 month.

How COE Renewal Loans works

If you are age 21 & above, RenewCOE can finance 100% of your PQP.

1. Please call us at +65 6444 4400.
2. Instructions and other requirements will be sent to you via email by our COE Renewal Loan specialist.
3. Interest Rates will be advised depending on the age of the vehicle and loan tenure.
4. Submit all the requirements and/or signed documents needed to our fax at (fax number here) or email at (email here).
5. Once all the requirements and/or signed documents were submitted, we will proceed with the submission of your COE Renewal application.
6. Our COE Renewal Loan specialist will notify you within 1 working day via a call or text message regarding the status of your applications.

What are COE Quotas?

COE quotas is a regulation by the Land Transport Authority to control the number of vehicles on Singapore’s roads. The official term they use is Vehicle Quota System (VQS).

The LTA controls the number of new vehicles allowed for registration through a quota on the COEs.

Anyone who wishes to register a new vehicle in Singapore must first obtain a Certificate of Entitlement (COE), which represents the right to own a vehicle for 10 years. After that, you can pay to renew the COE for another 5 – 10 years (see Prevailing Quota Premium below).

The VQS classifies vehicles into five COE categories:

COE Category	Type of Vehicle
A	Cars with Engine Capacity up to 1,600cc (1.6 litres) and Maximum Power of 130bhp
B	Cars with engine capacity above 1,600cc or Power above 130bhp
C	Goods Vehicles and Buses
D	Motorcycles
E	Open (for any other kind of vehicle)

Source: Land Transport Authority

How are the COEs Allocated?

Without having to go into detail on how the quota is determined COEs are allocated through a COE Quota Premium (QP).

The market determines the prevailing COE prices under each category through an open bidding process, where car buyers bid against each other to win COEs. This exercise is conducted twice a month.

Here’s how it works:

• It starts when bidders submit their reserve price in the open bidding system.
• The reserve price is the maximum price the bidder is willing to pay for the COE.
• The bidding system then automatically raises the Current COE Price (CCP) upward, by increments of $1.
• When the CCP exceeds a bidder’s reserve price, that bidder loses his/her chance of getting a COE.
• The CCP keeps rising, and stops once the number of bidders still in the running equals the number of available COEs.
• The bidding exercise then ends, and whoever’s still in the running is determined as a successful bidder.

The latest CCP (whatever amount on the dollar it ends on) is called the Quota Premium (QP). All successful bidders in the same category pay the same quota premium and get to own the vehicle for 10 years.

Renewal of COEs

After 10 years, do not need to participate in the open bidding for a COE renewal. To renew the COE for your existing vehicle for another 10 years, pay the Prevailing Quota Premium (PQP). To renew the COE for another 5 years, pay 50% of the PQP.

PQP refers to the price required to extend or renew the COE for a vehicle already in use. The PQP is calculated based on the moving average of the QP in the last 3 months. PQP price varies from month to month.

For all vehicle categories, the COE may be renewed for a period of either 5 or 10 years.

COEs, which have been renewed for a period of 5 years, are not eligible for another renewal and will have to be de-registered after they expire. Otherwise, there is no limit to the number of times for renewal.

Make an informed choice on how you can finance your COE Renewal for 5 years & 10 years, depending on your financial situation.

Contact us at +65 6444 4400 for a FREE consultation.

2017 Update: Check our 2017 COE Trend Prediction page for the latest COE trends and forecast.

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Bidding Terms	CAT A- Cars up to 1,600cc & 97KW	Cat B- Cars above 1,600cc or 97KW	Cat C- Goods Vehicle & Bus	Cat E – Open
September 2016 (Rnd 2)	$50,000	$55,501	$49,890	$55,201
September 2016 (Rnd 1)	$51,506	$57,002	$49,801	$56,889
August 2016 (Rnd 2)	$53,334	$56,500	$48,001	$56,956
August 2016 (Rnd 1)	$52,503	$57,903	$48,302	$58,201
July 2016 (Rnd 2)	$53,000	$57,508	$49,890	$57,507
July 2016 (Rnd 1)	$52,301	$56,089	$47,889	$56,002
June 2016 (Rnd 2)	$55,200	$57,010	$48,002	$57,390
June 2016 (Rnd 1)	$53,694	$56,000	$46,434	$55,100
May 2016 (Rnd 2)	$47,020	$49,156	$43,002	$49,700
May 2016 (Rnd 1)	$47,889	$51,010	$42,302	$49,000
Apr 2016 (Rnd 2)	$47,300	$49,602	$43,002	$49,501
Apr 2016 (Rnd 1)	$46,009	$47,000	$44,213	$47,510
Mar 2016 (Rnd 2)	$45,504	$46,502	$46,502	$46,667
Mar 2016 (Rnd 1)	$45,000	$47,604	$48,890	$48,002
Feb 2016 (Rnd 2)	$43,000	$46,970	$45,001	$45,009
Feb 2016 (Rnd 1)	$46,651	$38,610	$45,036	$44,001
Jan 2016 (Rnd 2)	$51,301	$50,089	$46,502	$51,000
Jan 2016 (Rnd 1)	$45,002	$54,920	$42,036	$55,089
Dec 2015 (Rnd 2)	$54,301	$55,001	$46,001	$57,501
Dec 2015 (Rnd 1)	$56,989	$60,001	$48,101	$60,003

COE Price History (Dec 2015 to May 2016)

The price for Category A COE (for cars with engines smaller than 1.6 litres (1,600cc) and less powerful than 97KW) has dropped S$6,412 to S$47,889. The Cat A COE remains volatile though showing a downward trend. The cheapest Cat A COE was recorded in Feb 2016 (Round 1) at $43,000. Mar 2016 (Round 1) at $45,000, was the second cheapest in comparison to nearly five years ago, in May 2011.

The price for a Category B COE (for cars with engines bigger than 1.6 litres, or more powerful than 97KW) fell to S$51,010. That made it just $3,991 less than what it cost in December 2015, a major drop in price compared to Jan 2016, when the price difference was a mere $81. February 2016 (Round 1) saw an unprecedented COE price for Category B when the figure fell to a record-breaking $38,610.

COE Predictions for 2016

The Land Transport Authority as well as Industry Experts are expecting a COE price drop in 2016.

How is COE price determined? Mainly on how many cars are de-registered (and either scrapped or re-exported thereafter). When one car leaves the road for good, it is a fresh COE made available for a new car to take its place.

According to figures released by the LTA, more than 100,000 cars will turn 10 years old, the age at which an owner has to decide whether to deregister it or renew its COE.

COE Supply From May to July 2016

Group	Average monthly quota	% Change
Cars up to 1,600cc & 97KW	4,433	+9.3
Cars above 1,600cc or 97KW	2,924	+21
Commercial Vehicles	456	+40.7
Open	1,027	+15.1
Total	9,634	+14.6

Source: Land Transport Authority
https://www.lta.gov.sg/content/dam/ltaweb/corp/PublicationsResearch/files/FactsandFigures/COEQuotaAllocationRV.pdf)

Watching the COE trend, the second quarter of 2016 could see COE prices cradled between the $40,000 to $45,000.

One reason for prices to gradually ease compared to last year, is that the COE quota is set to grow, according to industry experts.

Should the vast majority to choose de-registration that should ensure a healthy COE supply in 2016.

This is good news for someone like you who is contemplating on renewing your COE. This means that you can look forward to a brief era of falling COE prices. Therefore, you can expect your car renewal loan to be lesser this year than in 2015.

What better reason to arrange for COE renewal loan? Get a better understanding of COE quotas & premiums first.

Call us for a FREE COE Renewal consultation at +65 6444 4400.

Get Started with COE Bidding: Essential Info

• The live COE bidding system opens twice in a month.
• The open bidding exercises usually start on the 1^st Monday and 3^rd Monday of the month from 12 Noon and lasts for 3 working days.
• The exercises usually end on the Wednesday in the same week at 4pm.
• For details on COE bidding exercise and COE bidding dates, go to LTA Press Room > filter to show “News Releases” > enter keywords “COE”.
• You have to use the following bank channels to submit a COE bid. Note that you must have an active bank account to do so. Refer to table below.
• You can enquire & revise your bid through LTA COE Bidding Website. You cannot submit a bid through this website.

Access Channels	Submit Bid	Enquire Bid	Revise Bid
DBS /POSB ATM Tel: 1800-111-1111	Yes		Yes
DBS/POSB Internet Banking (for Companies and Motor traders) Tel: 1800-222-2200	Yes	Yes	Yes
UOB Internet Banking (for Companies and Motor traders) Tel: 1800-226-6121	Yes	Yes	Yes
LTA Open Bidding Website (https://ocoe.lta.gov.sg)		Yes	Yes

Step-by-Step

• Submit your bid by specifying your reserve price. This is the maximum amount you are willing to pay for your COE.
• The minimum reserve price is $1 and the amount of bid must be in multiples of $1 until your reserved price is reached. Find out about the trends in COE prices.
• Bid submitted cannot be withdrawn or revised downwards.
• A fixed bid deposit of $10,000 for Categories A, B, C and E will be deducted from your bank account when you submit your bid application. Learn more about the different vehicle categories.
• There will be an administration fee charged for each bid application and every subsequent revision.

If you are not successful, the bid deposit will be automatically refunded to your bank account, 1 working day after the announcement of the bidding results. You can try bidding again in the next bidding exercise.

CALCULATION OF COE QUOTA PREMIUM

Here’s an example of how the exercise works (figures are for made-up):

1^st COE Open Bidding Exercise in the month (N)

• COE Supply Quota for Category A = 3

• Number of bidders = 5 with reserve prices of S$100, S$88, S$70, S$70 and S$41

• If the COE Price (or Quota Premium) is S$71, COE bidding results of each of the 5 bids will be as follows:

Reserve Price		Bid Status	Remarks
$100		Successful	Only the first 2 bids will be successful. The COE Price (or Quota Premium) will be S$71.
$88		Successful
$70		Unsuccessful	The 3rd and 4th bids (both with reserve price of S$70) are not accepted as then the number of successful bids would exceed the COE Quota of 3. The remaining 1 unallocated COE Quota will be carried forward to the next corresponding COE bidding exercise in the following month (i.e. 2nd COE Open Bidding Exercise in month (N+1).
$70		Unsuccessful
$41		Unsuccessful

For more details on how the COE Bidding Process, Visit LTA and refer to Demonstration Kit & User Guide.

Current COE Price in Singapore

The Certificate of Entitlement (COE) second bidding for May continue to show a dip in passenger cars (Category A & B) while the other three categories rose in the second bidding exercise for May.

In summary:

• Category A – fell S$869 to S$47,020
• Category B – fell S$1,854 to S$49,156
• Category C – rose S$700 to S$43,002
• Category E – rose S$700 to S$49,700

Based on COE price history between 2015 and 2016, COE premiums for passenger cars had dropped by at least 30%. Have COE bottom out?

Why did COE prices fall in this bidding exercise?

The most obvious indicator is that the COE quota remains high.

Consistently since August 2015, each bidding exercise has seen more than 1,600 Category A COEs being released by LTA. Highest quota released for this category since early 2009. As a result of the higher supply, the COE premiums continue to be lower. What’s more, industry experts are confident that the COE quota remaining high this year, which means the historical COE prices will continue to fall.

Will the COE prices remain low?

Do not expect prices to stay low. We foresee that moving forward COE prices will average at $45K – $55K range.

For one thing, the recent news of Monetary Authority of Singapore (MAS) easing restrictions on motor vehicle loans has made the prospect of buying a car more attractive and within reach for an average car buyer.

The average car buyer who previously could not afford a higher cash down payment on a budget model, to the wealthy who prefer to stretch the repayment schedule of sports cars, everyone would be happy to go buy a brand new car.

Not to mention, there are also private-hire companies like Uber and Grab that continue to aggressively bid for COEs. While the Land Transport Authority (LTA) has barred taxi companies from bidding for COEs so as not to overheat premiums, Uber and other private-hire firms are not bound by such restrictions.

However, if how COE prices are calculated is any indication, you will end up paying more in the long run. Not only do you still have to fork up a 30% down payment in cash, you will have to base it on much higher COE premiums due to the above-mentioned factors that continue to prop up COE prices.

The question is: would you rather sit on the fence to buy a new car in the near future or take advantage of the lower COE prices right now and renew your existing COE?

Act now to renew your COE before the PQP rate increases. Call us today at +65 6444 4400.

Buy New, Used or Just Renew?

You’ve reached the end of a 10 years’ COE with your current set of wheels. Between buying a new car, a used one and renewing your current—which makes better sense?

Out with the Old, in with the New

Surely everyone would want to buy a shiny new set of wheels but this is likely the least viable option for those who cannot pay a huge down payment. With COE prices still reasonably high, forking out a sum upwards of $100,000 to get a brand new car is an option very few can afford.

There is the option to pay a 30%-40% down payment and take out a loan for the remaining amount.

Assuming you want to get a Honda Vezel 1.5 X i-VTEC and enjoy a favourable interest rate of 2.78%. Be prepared to make repayments of $995.50 a month over 7 years.

$100k x 70% = $70k loan

$70k x 2.78% = $1,946

$1,946 x 7 yrs = $13,622

$70k + $13,622 = $83,622

$83,622 / 84 mths = $995.50

Loan Amount	Interest Rate	Monthly Instalments (7 years)	Total principal and interest paid at end of 7 years
$70,000	2.78%	$995.50	$83,622

This table is for illustration purposes only. Please contact us at +65 6444 4400 if you need assistance on loan financing.

And the cost does not even account for other costs—maintenance, insurance, and road tax—just to name a few. Car insurance are generally higher for a new car. Older vehicles would not necessarily require as much coverage, and coverage comparable to a new vehicle is often much cheaper.

Pre-Owned Car

Although a used car requires a lower down payment versus a new car, it will be comparably higher than COE renewal car.

Most pre-owned car dealers will have you believe that the down payment makes up the biggest chunk of your upfront cost when buying a second-hand car.

Based on MAS Car Loan regulations, if the Open Market Value (OMV) of the used car is more than $20,000, your maximum Loan-to-Value is 60-70% – meaning you’ll have to ruck up at least 30% down payment.

But what they will not tell you upfront is that on top of the down payment you have to fork out, you will have to incur the cost of full vehicle maintenance. What you are buying relies solely on the reputation of the second-hand car dealer and unless you go to a Reliable Used Car Dealer there is no guarantee that you would NOT end up buying a lemon.

On the other hand, assuming that you have been diligent in maintaining your current car over the last 10 years, you are less likely to spend on repairs for most cases.

Pay to Renew

You have the option of paying the Prevailing Quota Premium (PQP) to renew the COE of your current car. You can either pay 50% of the PQP for 5 years, or 100%, for 10 years.

Using figures from the May 2016, the Prevailing Quota Premium (PQP) is $45,578 for Category A and $46,048 for Category B.

That means if you choose to keep your car for 5 years, this could set you back $22,789 for Category A, or $23,024 for Category B.

If you choose to keep your car for 10 more years, you’ll have to pay the full PQP for Category A and Category B respectively.

Assuming you want to keep your Category A car for 5 years and your monthly income is $5,000. You need to pay $22,789, or 50% of the Prevailing Quota Premium. With the new MAS announcement, a bank would allow you to loan up to 70% (or $15,952.30) over 7 years. Which means you have to fork up 30% (or $6,836.70) in cash and pay just about $209.20 per month with an interest rate of 3% over the next 5 years.

If your only consideration is the 30%, then the renew COE option still makes the most sense. With Speed Credit, we can finance 100% of the PQP amount. Your only consideration is the loan period which can pay it back over 7 instead of 5 years previously, for a 10 years COE renewal.

If you can’t afford a huge down payment for a new car, and if you’ve put in the time and effort to maintain your beloved car, then renewing your COE is probably the best financial move for you. You don’t run the risk of buying a lemon used car and you get to keep your familiar set of wheels.

To know more about our COE Renewal Loan Rates, please contact us at +65 6444 4400.