Saving on PQP: “Smart Is Good, Don’t Add Smart”

Interesting concept popped up from a chat I had with a guy keen to renew his car’s COE – he confidently claimed that he can still renew his car next month, even though the expiry was this month.

Renew After COE Expires, Really?

That’s true actually! As there is a one month grace period granted by LTA.

But the idea this caller had was, if next month’s PQP (COE renewal price is also called PQP) is lower, then he will save money!

Ker-ching! Ten years renewal at a five years price! No, just kidding. But he was hoping to pay a price that is lower, if the next month’s PQP price goes down.

Maybe he read about the possibility of getting savings by renewing in an earlier month before expiry. We wrote about this before and we do encourage all who wish to save on PQP to take a look.

What we write is a possible way to save on COE renewal.

But This Is An Entirely Different Idea He Had

This caller proposed to do something quite different, he wants to renew his car in the month after expiry, so he can take advantage of the next months lower price.

In my humble opinion, I replied, “But you don’t save anything and end up needing to pay the late renewal and late road tax fee?”

I think I may not have been clear enough on the phone.

Or perhaps in our earlier article on PQP savings may have been misleading (I’m not sure he read it).

Just to make sure I had my understanding in the right place, we have clarified with LTA, this is what happens when you decide to renew after the expiry date of your COE

• You pay the late fee (no quarrel about that this customer was aware of the fact) which varies based on the engine capacity of your car. The higher the engine capacity, the higher late fee charged.
• You cannot drive on the road during the period after expiry of COE and before renewal – or face a heavy penalty for doing so.

And this part not many people may know:

• You have to pay for the full road tax upon renewal, even for the period of road tax which covers that time when your car was parked and not used.
• You have to pay for late road tax renewal fee.
• You pay the PQP of the month in which your car expires, even if you do process the COE renewal after the month of expiry! i.e.: Your car expires in September but you wait till October, hoping to pay October’s PQP – nope, you still pay September’s PQP when you do the renewal.
• You do not get one month extension of COE. Your new COE still starts from the date of your old COE expiry. Wasted up to one month of COE and did not get to drive!

  

  “Why neber tell me!”

And so, in summary, it’s overall much better to pay to renew before expiry!

As the famous hokkien saying goes, (directly translated) “smart is good, don’t add smart!”

Need some financing to help with COE renewal?

We have helped many, in different circumstances, whether they were looking to renew for a short term drive or perhaps planned to change cars in two to three years.

Some were planning to go the long term and renew 10 years, and others, wanted the cheapest monthly for the next 5 years.

Others were planning to renew and sell, because that would fetch a higher price from the sale. Is that possible?

How to decide which bank to take from? Or should you consider in house loans?

If you are struggling over some of these, perhaps these answers to common questions we get asked can help.