10 Facts About COE You Probably Didn’t Know About

A Certificate of Entitlement, or better known as a COE, is a document that you need to obtain before buying and registering a new vehicle in Singapore. It is a document that represent the right to own a vehicle and the usage of the limited road space, with a lifespan of either 5 years or 10 years.

And it’s one of the things that make a car so expensive in Singapore. After all, where else can you find a piece of paper that’s more expensive than the car itself?

So, how much do you know about this expensive paper? Let’s see how many of the below facts are known to you.

You need to pay a COE bid deposit when you submit a bid
You need to pay a deposit when you submit a bid for COE. The cost of the deposit is $10,000 for Category A, B, C and E and $200 for Category E. Do note that the deposit will be deducted from your bank the moment you submit your bid and will only be refunded if your bid is unsuccessful.

You can submit and revise your bid countless times during the COE Bidding Exercise.
Some potential buyers may try to put the highest price that they are willing to pay for the COE once, and then hope for the best. It may be wise to be a little reserved and put a price that is lower than your final threshold, monitor the bidding process and revise the bid accordingly. Nonetheless, do be aware that each revision will have a bank administrative charge. Of course, most of the times, the car dealers are doing this for you.

The COE Quota Premium (COE Price) is the price of the highest unsuccessful bid + $1
While some may want to “chiong” and bid the highest possible price in order to secure their COE, others may want to take a risk and try to maintain a relatively reasonable bid in order to make COE prices just a little more affordable since the COE price is calculated by adding $1 to the highest unsuccessful bid.

COE can be renewed after the first 10-year period
For those who did not know, COE can be renewed after the first 10-year period is up. For vehicles without statutory lifespan, for example, a private car, you can renew the COE numerous times by paying the Prevailing Quota Premium (PQP), which is the three-month moving average of the Quota Premium for the vehicle’s category. Vehicles with statutory lifespan can only renew the COE up to the limit of the statutory lifespan.

You cannot renew your COE again if your first renewal is only for 5 years
If you own a vehicle and wish to renew your COE, it might be wise to renew it for another 10-year period if you are certain that your vehicle is going to last you that long. That’s because if you renew it for only 5 years, you cannot renew it again after the 5-year period is up. And here’s why renewing for 5 years isn’t advisable for relatively new cars because…

You will “lose” your car’s scrap value if you choose to renew your COE
If you opt to renew your car’s COE, you will automatically lose your car’s scrap value. The scrap value is the amount of money that you will get back from the Government when you de-register your car after the first 10-year period. Therefore, if you own a car with a high scrap value, it might not be worthwhile to renew the COE.

You can still renew your COE after it has expired
Contrary to popular beliefs, you can still renew your COE after it has expired as long as it is less than one month. Should you forget to renew your COE until it is expired, fret not. Head over to the LTA’s Customer Service Centre at Sin Ming and pay your renewal fees directly there through cash, cashier’s order or NETS. Do note that late payment fees will be applicable, depending on the type of vehicle.

You will “lose” the remaining balance of your current COE upon renewal
When you renew your COE before the expiry date is up, you will forfeit the rebates on the remaining value of the current COE. This rebate is the amount of “unused” value of your current COE if you deregister your car before the expiry date. Therefore, vehicle owners normally renew their COE very near to their expiry dates, so as not to “waste” money.

Your renewed COE will once again be eligible for COE rebates if you deregister your vehicle before the COE expires.
If you have renewed your COE for another 10-year period and decided to scrap the vehicle after 5 years, you will still be able to recover the “unused portion” of the COE. For example, if you renewed your COE for $10 for 10 years (which, obviously, will never happen) and decided to scrap it after 5 years, you’ll get back $5.

You can take a loan to renew your COE
This might come at a surprise, but yes, you can take a loan to renew your COE. Financial institutions and some banks offer such loans to help vehicle owners to renew their COE. United Overseas Bank (UOB) as well as financial institutions such as Hong Leong Finance offers loans at different interest rates. If you want to take a loan, do remember to do your homework to find the most reasonable interest rates!

And after all, think about it: lending money to renew a COE is the safest investment. If the person cannot pay the repayment, all they need to do is to scrap the COE and ta-da: they get back whatever they’ve not received.