Come March next year, Mr Danny Chua will have
a tough choice to make on his Toyota Axio.
That is when his car's 10-year certificate of
entitlement (COE) expires, meaning he has three options - scrap his
car and buy a new one, buy a second-hand car, or renew his car's
COE.
Last week, COE prices ended mostly lower with Category
A closing at $48,000 and Category B at $46,229 - the first time
since May that both categories fell below the $50,000 mark.
But Mr Chua, 49, a regional sales assistant manager,
said it was still beyond his budget.
He said: "Right now, a new COE will cost me about
$50,000 (not including cost of a new car), while renewing for 10
years will also be that much.
"It's a big amount, and with my finances a bit tight
now, I may have to wait till the last minute to see if the COE
drops."
He is not the only one facing such a dilemma.
According to the Land Transport Authority, there are
101,656 cars that will hit the 10-year mark by Oct 31 next
year.
Here is what motoring industry experts said car owners
should consider when deciding whether to buy a new car or to renew
the COE:
Consider the...
Car owners who want to drive their cars beyond 10 years
need not bid for a COE, but can simply renew their existing
COEs.
They do so by paying a Prevailing Quota Premium (PQP),
the three-month moving average of the respective vehicle category
the car belongs to.
The December 2016 PQP is $51,271 for Category A cars
and $55,187 for Category B cars.
Mr John Ling, founder of SJ Motor Enterprise, said: "If
you were to buy a new car with a new COE now, it may cost you
$100,000 or more, depending on the brand and model.
"Renewing, on the other hand, will cost about $50,000,
with some additional costs for maintenance and servicing."
Car owners may want to send their cars to a workshop to
get it professionally assessed.
An assessment costs about $60 while revamping the
system - including servicing the undercarriage, changing the rubber
system hoses, carbon cleaning - can cost between $1,000 and
$6,000.
Mr Joey Lim, managing director of repair workshop
Harmony Motors, said maintenance of cars aged 10 years and above
costs only a few hundred dollars more - not a significant increase
from what a brand new car would cost.
"Cars are also generally built to last about 20 years -
just look overseas. It's only in Singapore that we think they last
10 years because that's the period of the COE," he said.
These can be public transport, cycling or even jogging
to work.
Transport economist Michael Li, associate professor at
Nanyang Technological University, switched from driving to jogging
to work from his Lakeside home three years ago.
"Keep an open mind and explore a different way of
travelling. You may be pleasantly surprised," he said.
Financial service consultant Tjio Liang who scrapped
her car in March, also made the switch.
Ms Liang, 35, and her husband had just returned from
their honeymoon and spent a lot on their home, so she decided to
take public transport or Uber instead.
TNP