Published March 21, 2009

The great COE dilemma

Car lovers divided on renewing COE as prevailing quota premiums crash

By JOYCE HOOI

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CAR lovers might not agree on which cars are worth loving, but they can collectively rejoice about Prevailing Quota Premiums (PQP) hitting their lowest levels since 1991.

MEN AND THEIR MACHINES Car aficionados David Chan and son Brian are leaping at the chance to renew their COEs early despite having to forgo the remaining COE values. PQPs have hit their lowest levels since 1991

With the PQP ranging from $3,000 to slightly over $5,000 since the start of the year, car collectors looking to renew their Certificates of Entitlement (COEs), are sitting up and taking notice of this timely respite for their costly hobby.

Car-collecting in Singapore is not cheap, especially if the cars in question are not under the Classic Car Scheme, in which owners pay only 10 per cent of the PQP to renew their COEs.

For normal-plate cars, on top of the full PQP that has to be paid, most collectible cars tend to be more than ten years old and are subjected to an annual road tax surcharge of 10 to 50 per cent of the road tax.

It is little wonder then that car aficionados, such as David Chan and his son Brian, are leaping at the chance to renew their COEs early.

'These are heritage cars. They have been through hell to stay on the roads. We will pay through our noses for them. We are not rich. We are working-class. But you can't give up your hobby.' Al Bala, the Singapore representative for the Malaysia and Singapore Vintage Car Register

The older Mr Chan is prepared to forgo the remaining value on his COE - which cost over $18,000 and expires in 2011 - for his 1965 Alfa Romeo Giulia Sprint GT.

His son is also renewing the COE for his 1972 MGB Roadster ahead of its expiry in 2011.

'I'm not taking chances. We are going for it. I have never seen before a PQP at $4,500,' said Mr Chan, who runs David Works Garage - a workshop that specialises in classic and vintage cars - together with his son.

This is a far cry from the last few rounds of COE renewals that Mr Chan had endured for the sake of his beloved cars.

In 2000, Mr Chan forked out $40,000 for the COE of his 1974 Lotus Europa.

'We practically had to pawn everything we owned,' he added in jest.

Car collectors are as divided over the issue of early COE renewals as they are on whether 'collector' is a derogatory term.

Al Bala, the Singapore representative for the Malaysia and Singapore Vintage Car Register, is not opting for an early renewal of the Category A COE for his 1974 Volkswagen Beetle, even though he says that he paid about ten times the current PQP for the last round of renewal.

'I'm not willing to lose the remaining $12,000 that I have on my COE which will expire in 2011,' he said.

Terence Foo, who owns two collectible cars, reckons that there are only two good reasons to renew the COE early.

According to him, car owners who intend to sell their cars with a fast-expiring COE might consider it to sweeten the deal for prospective buyers.

'The second reason to renew early is that you expect the COE price to recover to such a crazy level two or three years later, that you will not be able to afford to renew it then,' he said.

For car enthusiasts with cars no more than 10 years old, COE renewals pose an additional quandary - the opportunity cost of the Preferential Additional Registration Fee (PARF) rebate.

Mr Foo had renewed one of his collectible car's COE in 2006 for $12,193, but the PARF rebate value foregone had been almost nine times that, at $93,000.

For car hobbyists, however, the value of their vehicles cannot be distilled into pure dollars and cents.

Mr Foo had spent $17,774 on renewing the COE on his hand-built 1985 Audi Quattro in 2005 despite only driving it for 200km to 300km a year. 'It's something that defies logic, actually,' he said.

Over the last decade, the population of cars aged 20 years and older have been shrinking steadily, from 21,535 cars in 1999 to just 2,897 cars last year, according to the Land Transport Authority (LTA). As of last month, the number of cars under the LTA's vintage and classic car schemes were 120 and 220, respectively.

While the issue of early COE renewal is debatable, the question of keeping these cars on the road is no question at all, despite growing economic uncertainty.

A check with various motoring communities in Singapore revealed that none of its members are letting any vehicles go.

'These are heritage cars. They have been through hell to stay on the roads. We will pay through our noses for them,' said Mr Bala.

And lest it is assumed that all car collectors are wealthy Bentley-driving types who can easily afford the related expenses, car lovers will have you know that this is patently not the case.

'We are not rich. We are working-class. But you can't give up your hobby,' Mr Bala said.