Published on October 9, 2021
A Guide To COE Renewal: How And When To Renew It
As we all already know, car ownership in Singapore is very costly. And if that isn’t enough, your car will be automatically deregistered after 10 years unless you pay for Certificate Of Entitlement (COE) renewal. Although you can choose to buy a new car when your current COE expires, a COE renewal is often the most logical and also economical choice – but that’s only if your car is well-maintained, in a good condition, and does not give you much problems.
Understanding COE Renewal
When your COE expires, you need to renew it so that you can continue keeping the vehicle registered under your name. As mentioned earlier, if your COE is not renewed then the vehicle will be deregistered and scrapped. Most of the time, renewals can be done before the expiry of your existing COE. However, it can also be done a month after your COE’s expiry date. The catch is here that you will not be able to drive your vehicle until the COE has been renewed, and that you will be charged with a late renewal fee which is dependent on the type of vehicle you drive.
Why Choose To Renew Your COE?
One of the most common reasons drivers choose COE renewal is the lower upfront cost. Unlike paying the full price for a new vehicle and going through the COE bidding process, opting for a COE renewal only requires you to pay for the Prevailing Quota Premium (PQP). The PQP changes monthly, and is calculated by taking the moving average of COE prices within the past three months.
When it comes to COE renewal, drivers can choose to extend it by five or 10 years. Before coming to a decision, it is best to consider how much longer you intend to drive your vehicle. From there, the PQP payable will be decided and if you choose to renew your COE for only five years, then the amount will be reduced by 50%. A five-year renewal is usually a more viable option if your finances do not let you commit to another 10 years of the COE cycle.
Costs of COE Renewal
The most commonly asked question about COE renewal is the price. To calculate the price, you have to take the past three-month average of COE premiums, also known as PQP. The PQP rate is dependent on the date that you choose to renew your COE and your COE’s expiration date.
As you’re only renewing your COE and not buying a new car, you are not eligible for the usual car loan. However, banks and financial institutions like Swee Seng Credit offer COE renewal financing plans to help you pay for the PQP. All you need is to do your necessary research to find the best COE renewal loan plan, apply for it, and wait for the approval.
Most of the time, banks offer rates that are just as attractive as financial institutions and in-house loans. However, bank loan approvals are more difficult to attain as compared to the rest. On the other hand, the process for in-house COE renewal loans is much simpler with a higher interest rate as compared to banks, depending on your loan amount and tenure.
There are exceptions when it comes to interest rates – some financial institutions or auto dealerships offer promotional interest rates as means of attracting more customers, however, the admin fees will often be quite high.
Here at Swee Seng Credit, we offer one of the best COE renewal loan rates. For our five-year renewal loan, the interest rates for a tenure of one to two years remain at 1.99%, and three years or up at 2.68%. However, we have reduced the interest rate for three-year loan periods to 2.48%, making us just as competitive as other financial institutions. These interest rates also apply to our 10-year COE renewal loan. Despite the lower but more competitive rates, we do not charge an exorbitant admin fee. Instead, we have even lowered it to a flat rate of $374.50 which will be applied to all loans as well.
In general, in-house loans are usually favoured due to the quick approval rates. Furthermore, these financial institutions may not perform credit checks, but even if they do, it seldom affects your chances of getting a COE renewal loan approved.
Swee Seng Credit is a financial institution in Singapore offering COE renewal financing. Let us guide you along and answer the questions or doubts you may have, to ensure a smooth and hassle-free COE renewal process. Reach out to us to find out more.