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Getting a COE Renewal Loan Vs Buying a New Car: Which Is Better?

COE renewal or buying a new car to drive on Singapore busy road

If the Certificate of Entitlement (COE) on your car is coming to an end in Singapore, you really only have two options.

The first is to pay your Prevailing Quota Premium and renew your COE for either 5 years, 7 years, or 10 years. The second is to purchase a new car entirely, using either your own savings or a car loan. But which option is best?

In this article, we’ll explore COE renewal terms and compare the differences between renewing your COE and purchasing a new car, when it comes to anticipated costs and anything else you should be aware of. This will help you to make a final decision on whether you should renew your COE now or go out and start looking for a new car.

Cost of COE Renewal Vs Buying a New Car

Between car insurance and road tax costs, today’s vehicle owners face a number of expenses in Singapore. This makes securing the right car finance type, amount and monthly repayments to suit your situation extra important.

Here’s a rundown of some basic estimated cost differences between the “renew COE” and “purchase a new car” option. Both sets of figures are based on typical car owners in Singapore with a Category A car.

Renew COE Purchase a new car
Purchase price $34,197 $96,999
Estimated total of up-front charges $34,197 $29,100
Loan amount $67,899
Monthly repayments $966
Typical interest rates 2.78%
Depreciation of car value per annum $3,420 $8,714
Rebate after 10 year period $9,860 (Value of PARF)

If you have sufficient savings to hand, the COE approach might seem like the simpler option, but for many car owners, the money involved in purchasing a new car will seem like a more attractive alternative, with lower up-front costs and the added bonus of a brand new vehicle parked on your driveway.

Factors to Consider Before Making Your Decision

There are a number of things you’ll have to think about when considering renewing a COE. Regardless of whether you want to renew COE terms for 5 years, 7 years or 10 years, you’ll need to think about:

  • The condition of the vehicle
    Poor maintenance, unnoticed or unrepaired damage and the general age of your car will all affect its value. You should think carefully about how long you realistically expect your car to serve you, as well as whether it’s an upmarket model that might hold its value, how old it is and what average depreciation looks like. If the situation looks bleak, it might make more sense to just purchase a new car altogether.
  • Any other hidden cost burdens
    Insurance premiums are always on the rise and older vehicles tend to attract more expensive premiums – which could make keeping an old car counter-productive. When your vehicle reaches a certain age, there’s a chance you could see your insurance cost rise by anywhere up to 20%.Similarly, under the latest tax laws in Singapore, road tax will increase at a rate of 10% per annum on all cars that are 10 years old or more. This road tax cost will continue to balloon, up to a maximum cap of 50%. And on top of all this, there’s fuel costs, too – which tend to be much cheaper on newer, more efficient cars than older models.

Where Can I Apply for a COE Loan Renewal?

If renewing your COE still seems like the right option for you, chances are you’ll need a COE loan to fund the process. Funding this kind of renewal can generally be achieved via two means – an in-house loan with your car dealer, or a bank loan from any prominent financial institution in Singapore. We’ve outlined what you need to know about each below.

In-house loan

  • Typical interest rates of 3 to 4%
  • No credit score or credit history checks
  • Fast, straightforward approval process


  • Applicant must be at least 21 years old
  • Minimum income requirements could vary (usually around $20,000)
  • Maximum loan amount could be up to 100% of Prevailing Quota Premium
  • Fees, costs and loan amount caps vary depending on tenures of 5 years to 10 years

Bank loan

  • Lower rates of 2 to 3%
  • Good credit score required
  • Approval in just a few working days


  • Applicant must be at least 21 years old
  • Minimum income requirements could vary (usually around $20,000)
  • Direct renewal applications are not accepted (you may need to use an agent)
  • You will need to provide evidence of documents and complete all relevant paperwork

Where Can I Apply for a Car Loan?

Banks and moneylenders all across Singapore offer flexible car loans with attractive monthly payments – but which are best? Let’s take a look at the best car loans as of January 2021.


Hong Leong Finance



Standard Chartered

Min. loanable amount $10,000 $10,000 $10,000 $10,000 $10,000
Interest rate 2.28% 2.28% 2.28% 2.28% 2.28%
Max. tenure Seven years Seven years Seven years Seven years Seven years
Typical monthly payment $557 $557 $557 $557 $557

Other Ways to Finance Your COE Renewal or New Vehicle Purchase

Right now, Singapore’s most prominent banks are offering standard yet competitive deals, with little variation between them.

However, there are other ways of financing your COE renewal or new vehicle purchase that could save you time and money. One such option involves getting a low interest personal loan from a licensed moneylender. Let’s take a look at how this option compares:

Personal loan from licensed moneylender

Loan quantum

  • Up to $3,000 for applicants earning $20,000 or less
  • Up to 6 times’ monthly income for applicants earning $20,000 or more

Interest rate

  • Guaranteed low interest rate of 4% or less

Repayment period

  • Loan tenures and amount may vary under rights reserved by the lender

The Bottom Line

As with any financial decision, the issue of whether to renew your COE or simply scrap your existing car and purchase a new one altogether using finance obtained from a bank or moneylender will always depend on your unique circumstances.

Let’s sum up the top things you should consider as deciding factors:

It’s wise to renew your COE if:

  • You are keen to keep your existing car
  • You are able to pay your Prevailing Quote Premium for the privilege of keeping it
  • Your vehicle is in good condition
  • Your car is likely to last many more years without any serious issues
  • Your car is not due to incur higher tax and insurance premiums in the next few years
  • You have a good credit score and are therefore able to secure a good rate

However, it might be a better option to simply buy a new car instead, if:

  • Your car is approaching 10 years old and will soon attract increased tax and insurance costs
  • Keeping your vehicle could incur more costs in depreciation and/or repairs
  • You cannot afford the up-front charges or amount associated with a COE renewal
  • Bank loans or moneylender loans are offering you a favourable loan interest rate on personal or car loans
  • You have a good credit score and can get a better deal
  • You are keen to own a new car or replace your old one

Renew COE or Fund Your Car Purchase Today With a 365 Credit Loan

Once you’ve decided which option is best for you, the next step will be to pinpoint where to get the best loan that suits your individual needs. While bank loans offer competitive deals and in-house loans offer high loan amounts toward your Prevailing Quota Premium, both have their downsides, and you might be better off considering a quick and easy personal loan from a licensed moneylender like 365 Credit Solutions.

All our personal loans can be used to fund almost any purchase imaginable, including new cars, Prevailing Quota Premium costs and COE renewals. What’s more, you can take advantage of fast approvals on loan amounts of up to 6 times’ your monthly income.

By applying online today, you can get instant loan approval any day of the week and enjoy big savings by locking-in an excellent loan interest rate for 5 years, a 10 year loan or whatever loan tenure you require. Our competitive deals will help you cover your Prevailing Quota Premium and/or new vehicle purchase price – and more.

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