Is your car nearing the end of its COE? Should you scrap it?
With COE prices being near record highs, you might be thinking of just renewing your car’s COE at the PQP prices and continue driving. Perhaps your car has been with you through your ups and downs and while as much as it sounds like the best option economically, it is undeniable that there are also many other factors that you should consider before you renew the COE to your ride. Today, we will discuss the two options, and whether or not it is truly worthwhile to renew the COE at such prices as compared to buying a new car.
Renewing my COE for another 10 years
There are two reasons why you would want to keep your current car.
The first is that the car has been with you for so long and you hold sentimental value and refuse to let it go.
Secondly, it is often seen as the most economical decision if you choose to renew your car’s COE.
While we definitely agree with point number one, and if you really love your car that much you should keep it. However, for the second point, we will discuss below as to why it may not be that wise to keep your car due to financial reasons. In addition, while you may think that if I am driving an expensive car, I should also renew the car and be able to fetch a higher price than just scrapping it and getting the PARF.
We thought that we should share with you that for vehicles which are considered more “rare” or valuable, the scrap value of the car will be higher as well. If you wish to find out more about the scrap value of your vehicle, you can contact us and we would be more than happy to evaluate your vehicle for you before you make a decision of scraping it or renewing the COE.
Not renewing my COE and getting a new car
While you may think that is more economical to renew the COE, let us bring to you some factors that might just change your mind. Several factors include safety features, fuel consumption, road tax and maintenance.
Since the current COE prices in April 2022 are about $70,000, why not consider a brand new car at $100,000 to $120,000. While it may seem daunting and costs up to $50,000 more for a brand-new car, with the current COE prices, it might just seem to be the more worthwhile decision. If the COE prices were $30,000 such as in the late 2019 or early 2020, we would suggest that you renew as paying a lot more for a new vehicle ($30,000 + $50,000) may not make much sense.
However, at current COE prices ($70k + $50k), we would recommend for most, if not all vehicles, that are registered under Category A COE to consider changing to a new ride once their COE ends. Since you can be considered to be paying a “fraction*” to change to a new car as compared to a couple of years back.
*Back in 2020, renewing the COE would cost 30k. Currently, it costs 70k to renew, which is a 2.3 times increase. But, for buying a brand new car, 80k to 120k is a 50% increase.
Upgrading to a new car
If we assume that you are upgrading from an old car to a new car of equivalent specifications, the additional premium might not be as much as you think. With the old car, road tax will be increased up to 50% more, while fuel consumption and reliability of the car may not be performing up to par as compared to the new vehicles in the market. With the fuel prices as of late, every little bit of fuel improvement can make a huge difference in the cost of owning a vehicle.
While the new car performs better and is more reliable since it comes with a warranty and often free maintenance for a couple of years, there is also an improvement in the refinement of ride quality, as well as the newly equipped safety features that most new cars have today.
To us, safety is the number one priority and certain safety functions such as the emergency stop assist that does not require the input of the driver can help prevent an accident, which keeps the driver and their passenger safe while reducing the chance of needing to spend more for repairs. If you can stretch your budget a little, you might find that buying a new car may allow you to enjoy the benefits of both cost-saving while improving overall comfort.
Final Words
All in all, while renewing your car’s current COE may seem like an enticing decision and may very well be the only choice you have if you really need a car and will be unable to stretch your budget. However, if you do have the ability to, you may wish to reconsider based on the other factors that we have shared, safety, reliability and peace of mind may bring forth greater value than just the initial capital that you save.
If you have made the decision and you are looking for someone to scrap your car, consider contacting us as we provide a convenient and hassle-free process for scrapping your vehicle.
