The COE prices are Fluctuating. Is now a good time to buy a car?
In Singapore, owning a car involves significant financial commitment due to the high costs associated with car ownership, including the COE, road tax, insurance, and maintenance. Here’s my feedback on each of the points:
1. Suitable Income Level for Car Ownership
To comfortably own a car in Singapore, many people suggest that your annual income should be at least 1.5 to 2 times the total cost of car ownership. This includes the cost of the car, the COE, and ongoing expenses like maintenance, fuel, insurance, and road tax. For a middle-range car, this could mean an annual income of at least SGD 80,000 to SGD 120,000, depending on the car model and COE price. However, the higher your income, the more comfortable you'll be with the costs.
To comfortably own a car in Singapore, many people suggest that your annual income should be at least 1.5 to 2 times the total cost of car ownership. This includes the cost of the car, the COE, and ongoing expenses like maintenance, fuel, insurance, and road tax. For a middle-range car, this could mean an annual income of at least SGD 80,000 to SGD 120,000, depending on the car model and COE price. However, the higher your income, the more comfortable you'll be with the costs.
2. COE Price and Your Current Situation
I am lucky that my COE was SGD 32,000 when I purchased my Honda Fit. That’s relatively low compared to current COE prices, which have seen significant increases. My car is well-maintained and had served my needs well. Bring kids to school and pick them up. For my case i am in a good position cost-wise, especially since my COE cost was much lower than today’s market rates.
I am lucky that my COE was SGD 32,000 when I purchased my Honda Fit. That’s relatively low compared to current COE prices, which have seen significant increases. My car is well-maintained and had served my needs well. Bring kids to school and pick them up. For my case i am in a good position cost-wise, especially since my COE cost was much lower than today’s market rates.
3. Renewing the COE or Getting Rid of the Car
When my COE expires, the decision to renew it or sell my car depends on a few factors:
- Current Market COE Prices: If COE prices are high, renewing might be more cost-effective than purchasing a new car with a new COE.
- Condition of My Car: If my Honda Fit is still in good condition and doesn’t require costly repairs, renewing the COE could be a smart move.
- Personal Needs: If my needs have changed (e.g., needing a larger car), or if my family planning to move or have other financial priorities, selling the car might be better.
Renewing the COE for another 5 or 10 years can be a cost-effective choice, but it depends on how much I value the car and whether it still meets my needs. My car for now is only 4 years old. So for me I will use until it expires and see how it goes.
When my COE expires, the decision to renew it or sell my car depends on a few factors:
- Current Market COE Prices: If COE prices are high, renewing might be more cost-effective than purchasing a new car with a new COE.
- Condition of My Car: If my Honda Fit is still in good condition and doesn’t require costly repairs, renewing the COE could be a smart move.
- Personal Needs: If my needs have changed (e.g., needing a larger car), or if my family planning to move or have other financial priorities, selling the car might be better.
Renewing the COE for another 5 or 10 years can be a cost-effective choice, but it depends on how much I value the car and whether it still meets my needs. My car for now is only 4 years old. So for me I will use until it expires and see how it goes.
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