COE prices have slid and buyers have returned to car showrooms.
Cat A premiums are down by nearly $10k, while Cat B and Cat E prices have dropped by more than $5000.
It seems like a good time to buy a car.
Should you? Or should you consider holding on to your current car by paying the prevailing quota premium (PQP)?
The argument for buying a new car now
When COE prices drop, buyers flock to showrooms.
Dealers will be encouraged by this and will try to sell their existing stocks (ex-stock).
Ex-stock units take up space and cost the dealer money. They will want to move them quickly, while buyers are buoyed.
It is quite possible to get a good deal, perhaps with more freebies than usual thrown in.
And even if new car buyers cause the COE prices to rise, it won’t be as bad as when private-hire players get involved.
The downsides of buying a new car now
Buyers rush back to showrooms to try and book the car they wanted before COE prices rose.
There is a strong chance that COE prices will rebound.
Remember, the COE prices you read about are the results from previous rounds.
How much you pay for your COE may be lower or higher.
If you book a new car now and private-hire players get involved again during the next few biddings, COE prices will shoot up.
What about selling your car?
Selling your car is not advisable at the moment – unless you really have to.
Used car prices are affected by COE prices. If the latter goes up, so does the former.
Therefore, if COE is on a downward trend, selling your car now will net you less moolah.
Should you just renew your car’s COE?
This depends on several factors.
Since the PQP is based on a three-month average, high COE prices during the last three months equal a higher PQP.
However, if you are comfortable with paying the PQP to hold onto your car for another 10 years, go for it.
This is of course, assuming that your current vehicle is in good condition because you have rigorously maintained it.
COE, renewals and car inspections: What car buyers should expect
How can I maintain my car after renewing its COE for another 10 years?
