Buying a Car But Worried About High COE? Tips to Keep Other Costs Within Budget

Buying a Car But Worried About High COE? Tips to Keep Other Costs Within Budget

This post was written in collaboration with Budget Direct Insurance. While we are financially compensated by them, we nonetheless strive to maintain our editorial integrity and review products with the same objective lens. We are committed to providing the best information in order for you to make personal financial decisions with confidence. You can view our Editorial Guidelines here.

To drive in Singapore, we need to have a Certificate of Entitlement (COE), which serves to regulate the number of vehicles on the road and also gives vehicle owners the right to own their own transport for up to 10 years.

Just like how demand and supply affects the prices of other goods, the cost of COE is likewise affected by demand and supply of COE quota available, as well as the current economic situation.

COE prices have been rising, and on 17 August 2022, premiums for large cars and the open category remained well above the six-figure mark at $112,001. This high amount was last seen in 1994. COE premiums for small cars (up to 1,600cc & 110kW) was $87,889.

Thus, for those who need to get a car for pressing needs — such as a sales job that requires running around or ferrying the kids to and fro from school, childcare and home — this is indeed painful for the wallet. They’re probably grumbling about why they have to pay higher COE just because some people refuse to take the MRT.

But there are ways to lower the costs of car ownership. Here are some tips!

Tip 1: Buy a used car

From a financial point of view, it does not make sense to buy a brand new car, as the value of a car plummets swiftly once it is purchased, especially in the first few years.

In addition, due to the COE system, which encourages car owners to replace their cars when the 10-year COE runs out instead of renewing it, you rarely see threadbare cars that have been used to the point of expiry on Singapore roads.

That means there is a steady supply of relatively new cars in decent condition on the second hand market, available at much lower prices than their brand new equivalents.

You should, however, do the necessary checks and note the following when buying a used car:

  • Your maintenance costs might be higher if the car is not in good shape (check the body of the car as well as the mileage and don’t be afraid to request for maintenance records);

In view of worldwide rising interest rates, not everyone can pay the whole car with “full cash”. One way to save some cost is to look for a loan with a lower interest rate or consider paying more cash for your downpayment.The number of years remaining on the COE will also influence the cost of the car, so you should compare prices not just across models but also across remaining COE.

That being said, buying a used car is still a more economical option than buying a brand new one, both in the long and short term, simply because the price of the car is likely to be so much lower.

Tip 2: Get your car insurance directly from the insurer

Instead of going through an agent or middleman, buy your car insurance directly from the insurer and you’ll save on commission and agents’ fees.

Luckily, car insurance is a straightforward form of general insurance, so you really don’t need to waste your afternoon sitting down at Starbucks with an insurance agent and having him rattle off the features of the plan.

For example, you can buy car insurance online, directly from Budget Direct Insurance , which doesn’t compromise on value, service or coverage.

Tip 3: Don’t be distracted by the frills

When buying car insurance, the key to saving money is to know exactly what you want. Don’t get distracted by the bells and whistles or the “what ifs” that some agents might try to sell to you, as that will result in a higher premium for you, and higher commissions for the agent.

Car insurance is really a simple product. You start off with a base plan, which includes the compulsory cover you need to drive on Singapore roads — that is, third party risks and compensation. Then, you have the option of adding on extras to customise your cover.

If you know what coverage you need and want to get only that with razor sharp focus, your best bet is to buy directly from an insurer like Budget Direct Insurance . That way, you can just select the plan and add-ons you need without an agent breathing down your neck (or influencing your decisions by upselling coverage you may not need).

There are various types of car insurance plans available to suit drivers’ needs, and you often also have the option to customise your cover to suit your specific requirements, which helps you save on your premiums as you can just include only what you need.

Here’s a quick look at the main differences between the types of car insurance plans from Budget Direct Insurance:

Budget Direct Insurance Singapore – car insurance motor insurance

Core Covers Comprehensive (highest level) TPFT (in-between) TPO (super basic, mainly liability)
Injury/death to a third party Covered Covered Covered
Damage to third party’s property Covered Covered Covered
Legal costs against criminal charges (usually arising from an accident) Covered Covered Covered
Towing after accident Covered Covered (only for fire to or theft of your car) Not Covered
Damage by fire Covered Covered Not Covered
Damage or loss to your car due to theft Covered Covered Not Covered
Damage to car if someone crashes into you / or if it’s your fault Covered Not Covered Not Covered
Damage by acts of nature/vandals Covered Not Covered Not Covered
Damage to windscreen/windows Cofered Not Covered Not Covered

The good thing is that Budget Direct Insurance doesn’t bundle their coverage, so you don’t have to worry about paying for cover you won’t use just because it was forcibly included in the plan. You can add on their Optional Covers to suit your needs.

It’s also worth noting that if you have a poor accident record, some insurance companies may refuse to insure your car due to multiple ‘at fault’ accident claims made within a certain timeframe (usually three years).

At Budget Direct Insurance, you don’t have to worry about being excluded. All drivers get a second chance with their Higher Risk Car Insurance policy, which is suited to motorists who have had two or three at-fault accidents and/or claims within the last three years. Such motorists might find it hard to get cover from other insurers…but not with Budget Direct Insurance! Phew~

Bonus tip!

If your car insurance is due for renewal, it’s a good time to start shopping around for a better deal.

It is never a good idea to just blindly renew your policy with your current insurer, because you could potentially save hundreds of dollars by shopping around and comparing motor insurance quotes.

There are also some great promotions to be had. For instance, if you can find premiums cheaper than that of Budget Direct’s for the same level of cover, you get up to $100* in e-shopping vouchers, even if you don’t buy from them. Top tip! You can buy your insurance 60 days before its start date to take advantage of their special deals and promos.

Switching insurers is an easy process. You can just arrange to seamlessly make the switch on or before the expiry date of your existing policy, with no gaps in coverage.

It’s so quick and easy to buy car insurance online

Buying car insurance online is super easy, especially if you’re getting it from a company like Budget Direct Insurance , which invests in tech to make transactions as simple, easy and secure as possible.

You can receive an online quote in 30 seconds and complete your online insurance purchase or renewal with Myinfo via Singpass.

Purchasing online with Budget Direct Insurance is a secure and speedy affair. Submitting your personal information using Myinfo via Singpass means that all your car and personal details will be automatically retrieved, and forms will be pre-filled with personal data relating to your driving history. The entire process is a breeze, with minimal hassle to you.

If you’re still wary of buying insurance online, you can pick up the phone and speak to Budget Direct Insurance’s friendly, award-winning customer service team.

In addition, Budget Direct Insurance won the Feefo Platinum Trusted Service award three years in a row for delivering exceptional customer service, so you can be sure that they take customer satisfaction very seriously.

The insurer strives to offer value to their customers at an affordable price, and they are proud to be a provider of some of Singapore’s cheapest motor insurance policies.

Finally, for those of you who prefer to travel on two wheels instead of four, Budget Direct Insurance offers motorcycle insurance as well.

High COE prices might get you down, but it’s nice to know that a friendly insurer like Budget Direct Insurance has got our backs when it comes to saving money.

Get a quote online in 30 seconds and purchase your Budget Direct Insurance policy securely using Myinfo via Singpass.