If you plan to buy a car (even a pre-owned car) in Singapore, you cannot avoid the COE (Certificate of Entitlement). It is part of the car price you have to pay. But many people find it hard to understand the COE price, as shown above.
So, instead of a lengthy explanation which usually causes more confusion, I think these 10 questions can help you understand COE price fluctuations easily.
Is COE an investment or a disposable product?
COE (Certificate of Entitlement) is definitely NOT an investment, although the price fluctuates as stocks do.
The value of your COE depreciates from the day you register the car. Each day, you lose about 0.027% of the COE price you paid. Every COE shares the same depreciation rate, but not the absolute value, obviously. So, some car owners lose more money each day than others.
For example, if you get the COE at the price of $30000, you will lose $8.1 every day. If you got it at $60000, congratulations, you lose about $16.2 per day.
After 10 years, the value of all COEs, regardless of your cost of getting the COE, will be $0.
So, COE is not an investment.
In fact, COE is a disposable product:
- It can only be used for up to 10 years.
- It can only be used once.
Can I buy a second-hand COE?
One COE can and MUST be tied to one car only. In other words, once used, the COE becomes an essential part of the vehicle.
So, you cannot sell a COE without selling the car. Similarly, you cannot buy a second-hand COE without purchasing the car.
For this reason, there is a market for second-hand cars in Singapore. But there is no market for second-hand COEs.
An imported second-hand car needs … Read the rest