Buying a new car can be pricey in Singapore. If $100,000 Certificate of Entitlement (COE) prices are driving you away from the automobile market, here are some alternatives.
Owning a car has become increasingly unaffordable. Recent record-breaking COE prices have put off many car buyers, with Transport Minister S Iswaran stating that they will only trend upwards. As such, it may be prudent to explore alternatives to purchasing a brand new car.
1. Extending Your COE
Rather than getting a new car, extending your COE could save you a substantial sum of money. A brand new Corolla Altis, a common entry-level car here, would cost upwards of $155,000.
Compare this against the cost of extending COE for 10 years for a Cat A car (1,600cc and below), which was $92,381 in May 2023.
This option of extending the COE would work best if your car is in relatively good shape. You will also get to use your current car you are already familiar with, and not worry about the hassle of selling it.
However, maintenance and repair amounting to hundreds each time may become more frequent as the car ages. With over 100,000km of mileage, such a car may require an overhaul of its engine and suspension, among other smaller parts. Cars that are over ten years old also face higher road taxes.
2. Getting A Second-Hand Car
Purchasing pre-owned cars are a more affordable option than getting a brand new one. In addition, some second-hand sellers are happy to negotiate with buyers on the price of their car, meaning that you could snag a good deal.
The downside of this option, just like extending your COE, is that the older the car gets, the more maintenance and repair it may require. It could also be a challenge to find a second-hand car that meets your specific needs.
3. Car Sharing
The third alternative to owning a car is simply not to.
Instead of buying a car, renting one might be a better alternative. Be it for a short road trip or day-long errands, renting a car is a more viable alternative for those who only need a car for a short period of time.
Rentals are possible for as short as a few days to as long as several months. Car sharing apps such as BlueSG and GetGo provide convenient car rental services for one-off trips as well.
Car rental options also mean not having to worry about maintenance costs which come with owning a car. But do watch the usage because if you use this option frequently, the costs will rack up. Additionally, most rental services require you to collect and return your car at designated locations, and sometimes only on certain days – which may be limiting for some.
Still want a new ride? Pick up the right loan
Having considered the alternatives, a first-hand purchase may still appeal to you. Perhaps you cherish the warranties that come with a new make and think that maintaining an older vehicle is not worth the hassle. Or maybe you enjoy the freedom to choose when it comes to selecting your own car – from the latest electric models with the newest software, to the specific trim and colour.
A fresh buy also likely means a more stretched-out loan for a lower monthly instalment. With this in mind, it is important you manage your money wisely by selecting an affordable car loan like Maybank's, so that you can ride around town without a frown.
the bottom line:
It does not always have to be brand new or nothing when it comes to buying a car. As COE prices continue hiking, there remain affordable alternatives for you to cruise through the city.