The number of motorists who chose to renew their COE and hang on to their old cars jumped to more than 17,000 in the first three months of this year, in what is likely to be a quarterly record.
If the growth continues, the number of COEs revalidated this year will exceed last year’s record of 37,114.
Latest figures from the Land Transport Authority (LTA) show that 17,428 cars had their COEs renewed, allowing their owners to keep them beyond their 10-year statutory lifespan.
This figure was nearly three times that of the same period last year and about 50 percent higher than for the October-December period.
In fact, it was 76 percent higher than the 12-month figure for 2015 – the year this trend started to catch on in Singapore.
Singapore is known for having one of the youngest car populations in the world.
Of the 17,428 COEs renewed, the split between small and big cars was almost even. Previously, smaller cars (up to 1600cc) accounted for the vast majority of revalidations.
This is because owners of bigger cars forgo a bigger sum when they extend the lifespan of their cars.
To revalidate a COE, a motorist has to pay a prevailing quota premium (a moving average of the COE premium) and give up the car’s scrap rebate.
This rebate is refunded by the LTA if a car is deregistered before its 10th anniversary.
It ranges from around $10,000 for a compact sedan like the Toyota Altis to over $30,000 for a premium model like the Mercedes-Benz E-Class.
Cars older than 10 years are also subject to higher road tax and more frequent vehicle inspections.
Singapore University of Social Sciences’ Associate Professor Park Byung Joon, an urban transport expert, said: “I can say two things about this trend.”
“One, renewing the COE is a lot more economical than buying a new car in terms of annual depreciation.”
“Two, more Singaporeans are beginning to see the car as just a means of transport.”
Prof Park noted that this was in line with trends in First World cities, where the car is mostly regarded more as a mode of transportation than a status symbol.
In Japan, the average age of a car is 8.5 years. In the United States, it is 11.5 years. In Singapore, some 55 percent of cars are five years old or below.
Mr Jeremy Chua, editor of Torque, a motoring bi-monthly published by SPH Magazines, concurs that the COE revalidation trend is fuelled mostly by economics.
“Many motorists find it more cost-effective than buying a new car,” Mr Chua said, adding that uncertainty arising from global developments such as the US-China trade war has also made motorists “more prudent or conservative”.
But there are also other reasons. “For instance, if a couple use their vehicle only several times a week because they mostly take public transport, they may not feel like they need a new car,” he said.
He added that access to rail lines and point-to-point services has improved of late.
Car owner Ting Huat Sin is one of those likely to add to the growing statistics. The 45-year-old manager owns a 2-litre hatchback which is reaching its 10th year in a few months.
He said: “The depreciation is much lower than buying a new car.
“But cost aside, my car’s mileage is very low – under 50,000km after nine years and two months.”