Extending your COE: Should you do it or trade in your ride for a new car?
Interestingly enough, this question came not from a reader, but my own financial consultant.
Without further ado, here are three reasons why you should extend your current car’s COE instead of heading to the showroom to get a brand-new car.
1) IT IS CHEAPER THAN BUYING A NEW CAR!
This is the most obvious reason, but sometimes, the lure of a new car with its “new car” smell, better performance and cooler features can make you forget about your dollars and sense.
But hold on! A new car is going to cost you about twice as much as if you just renewed your COE for another ten years by paying the prevailing quota premium (PQP). For Cat A, it is currently $42,122 and Cat B is $50,578 (figures as of Feb 19, 2018).
You’ll have to spend almost double that amount to buy a brand-new car!
Besides, if you’ve been properly (and meticulously) maintaining your current car, and it hasn’t been giving you any problems besides the usual wear-and-tear replacements, extending your COE might be a more fiscally prudent idea than shelling out bigger bucks for a shiny new ride.
2) YOU’LL ENJOY LOWER DEPRECIATION
Let’s say you renew your Cat A COE now. Your depreciation over the next 10 years is going to be $42,122 divided by 10, or $4212.20 annually.
No brand-new car that can match that.
3) YOU CAN REMAIN PHYSICALLY ATTACHED TO YOUR CAR
Extending your COE means you don’t have to undergo the painful experience of saying goodbye to your car.
Remember all that time you spent driving it? Remember how much time you’ve spent grooming it? Remember how your car took you on dates with your girlfriend before she became your wife? Remember how it was your wedding car? Remember how it was your first-born’s first car ride?
Extending your COE means you can not only treasure, but re-live these special moments and memories. To some petrolheads, the PQP is worth it because their car and what it means to them is simply priceless.