Should I Apply for 5 or 10 Years of COE Car Loan?

By: MoneyMax

Is your car’s COE coming to an end? Most of our customers called us to check about the renewal of Certificate of Entitlement (COE) car loans. There are two options to renewing your car COE, one is for five years and the other is for 10. Factors such as the condition of your car and the amount of cash rebates would influence whether to renew your car COE. We hope this topic will help you make a more informed decision.

The Condition of the Car
Many car owners tend to overvalue the condition of their cars that usually leads to an impractical expectation. Imagine how devastating it would be to have your car break down just after renewing your COE. Therefore, it is vital to know condition of your car before getting your car COE renewed. A pre-sell inspection can be extremely worth the investment. Discovering severe wear and tear during the inspection may help car owners optimise the purchase decision; to renew the COE by five or 10 years.
PARF Rebates
Generally, all new cars in Singapore come with an Open Market Value (OMV), which is the original production cost of the car. If the car is de-registered before the end of 10 years from the first registration date, the car owner will be entitled to a Preferential Additional Registration Fee (PARF) rebate. This is generally a percentage of the OMV.

Age at Deregistration PARF Rebate
Not exceeding 5 years 75% of ARF paid
Above 5 but not exceeding 6 years 70% of ARF paid
Above 6 but not exceeding 7 years 65% of ARF paid
Above 7 but not exceeding 8 years 60% of ARF paid
Above 8 but not exceeding 9 years 55% of ARF paid
Above 9 but not exceeding 10 years 50% of ARF paid
Above 10 years Nil


The PARF value depreciates over time, until it reaches the minimum PARF value. For example, the owners of cars aged above 9 but not exceeding 10 years will get a 50% return of what they paid for ARF.

PARF Rebates Eligibility

COE rebate depreciates based on the days that you use the car. If the car is used for the full 10 years (until the last day of the COE expiry date) you will not receive any COE rebate. Thus, unlike PARF rebate, COE rebate does not have a minimum value; depreciates till a cost of $0.

Upon COE renewal, both the PARF and the COE rebates will be forfeited. This forfeited amount is typically added on as part of the cost of COE renewal. Hence, according to car depreciation, it is commonly better to get your car COE renewed because this cost can be depreciated for a longer period of time.

Let’s say if you are looking to keep your car for three decades or more, you will need to get a 10 years car renewal. Renewing the car COE for 10 years enables you to get another renewal at the end of the second decade. However, a five years car renewal will not allow you to get another COE renewal, as under the regulations of Land Transport Authority, the car has to be deregistered at the end of a five years car COE package.

MoneyMax Leasing offers a one-stop solution for COE car loan at the lowest rate in Singapore.

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