AskVenture -COE Packages Explained
When it comes to purchasing a new car in Singapore, all vehicles will require an expensive piece of paper…ehem…a Certificate of Entitlement (COE) before it can be registered for use on Singapore roads. Unless you are new to the Singapore car scene, the concept of COE shouldn’t be something new for you.
Car buyers can bid for the COE as individuals (through DBS/POSB ATM only) or more commonly, bid through car dealers – and this is what this article will set out to discuss.
Why is the COE Package IMPORTANT?
Simply because it affects the price of your new purchase and choosing the wrong package may cause you dearly. Bear in mind that your “true” purchase price of the car is dependent on the following :-
- COE Package
- Service & Warranty Package
- Options, Equipment and Accessories
- Finance & Insurance Package
- Trade In value
- Estimated Delivery Date
- Hidden Charges
Today, let us just focus on the COE Package.
COE packages:
Non-guaranteed vs Guaranteed, With/Without Cap, rebates and top-ups – what are they?
You may be wondering why there are so many different COE packages when all there is to do is to secure a COE by bidding for one. This is correct, but it is a little more complex than that – allow us to explain:
When purchasing a new car from dealers, you might notice that some prices shown exclude COE or start from a certain price. The reason is because the COE usually comes bundled together with the car as a package – with different car dealers offering different types of packages,
Hence, it is very important to do your research on the car dealers and the type of COE packages they offer before you make that big-ticket purchase. This will ensure that you not only get your car in a timely manner, keep to your budget and most importantly, prevent you from spending more.
Non-guaranteed COE Packages
Non-guaranteed COE, as its name suggests, basically means that there is no guarantee that you will receive a COE. Usually, how this package will work is – after paying a booking fee, the dealer will try to bid for your COE without any guarantee of securing a COE successfully for you. Although this kind of package is usually lower in cost, its uncertain nature means that you may or may not get a COE and (as a result) your car as well.
If the dealer is unsuccessful in bidding for a COE for you, you would either end up waiting longer for the car or have to pay additional cash in order to secure a COE (more commonly known as top-up which we will discuss further below).
In the event that you are unwilling to top up for the COE, the deal will be most likely cancelled. If previously agreed, you should receive a full refund of your deposit.. If you decide to go with this package, remember to take note of the below items before signing on the dotted line:
- Are additional top-ups optional or compulsory? If it is compulsory, the answer is yes, is there a cap on the amount to top-up?
- What is the timeline to secure the COE? 1,2 or 3 months? It is important to state a reasonable timeline because you do not want to be stuck with a deal whereby the COE bidding is unsuccessful for an extended period of time. Remember to state the timeline and NOT the number of bids. If you are curious to know why, follow us as we will uncover gimmicks and tricks that many car buyers fall into unknowingly in our upcoming articles.
- Make sure that your deposit is fully refundable and that there are no admin charges or any other hidden costs.
This seemingly harmless package does come with some risks, especially when you are seriously looking for a car. Why? Because you may end up paying more. If you go for an unrealistic Non-guaranteed COE package, you may end up topping up and paying more than what you would have paid if you had chosen the Guaranteed COE package instead.
Another factor to consider is that of opportunity cost. Suppose you committed to buy the car when COE was at $45k. Over the course of your dealer bidding for your COE unsuccessfully for the next 3 months, COE might have risen to $55k.
If you choose to walk away from your existing deal and approach another dealer, car prices would logically have gone up by $10k.
Some dealers use this trick to lure you in first and knowing that you desperately need a car, they will try to push you to top up for a Guaranteed COE. So, choose the Non-guaranteed COE package only if :
- You are not in need of a car urgently,
- The COE amount that your dealer is bidding for you is reasonable (usually not less than 95% of the current COE amount).
- The COE is NOT on an uptrend.
Guaranteed COE Packages
Guaranteed COE packages essentially means that you will be guaranteed a COE by your dealers. For this package, there are usually 2 main variants – Guaranteed COE with Top Up and Guaranteed COE without top up.
Guaranteed COE Packages with Top-ups
In this package, your dealer will set an amount to bid for your COE. Be realistic, ensure that this amount should be either equal to or higher than the current COE premium. Before bidding, both you and the dealer must agree on the maximum amount which you are willing to top up if the COE premium goes above the amount set by your dealer to bid for your COE.
Let us look at an example to better understand this package:
- Current COE Premium: $45,000
- Guaranteed COE Package Amount: $45,000; COE Rebate: $45,000
- Maximum top up pre-agreed by buyer: $2,000
| Successful COE bid amount | Result |
| Below $45,000 | No top up required, buyer gets a COE rebate of the difference between $45000 and the successful bid amount |
| $45,000 | No top up and no COE rebate |
| Above $45,000 | Buyer tops up but capped at $2,000, the rest will be absorbed by the dealer. |
In short, you will be guaranteed a COE, subjected to whether or not there is a need to top up additional cash. All in all, these are the important things to take note when deciding on this package:
1. The amount that your dealer is bidding for you. It must be realistic (either equal to or higher than the current COE amount).
2. The maximum amount which you agree to top up. This must be spelled out clearly and correctly before you sign on the dotted line.
3. Again the timeline to secure your COE. You don’t want your deposit to be stuck with some meaningless deal forever.
#ProTip: If the package price set out by the dealer is too good to be true, the chances of the actual COE price being higher than the package price is very high. So do your research to ensure that you are not committing to such packages even though a “Guaranteed COE” is promised.
Guaranteed COE Packages without Top-up
Introducing the sweet spot of COE packages – The Guaranteed COE Package without Top-up. This kind of package offered by some dealers offers a successful COE bid at a fixed price but the extra clause at the end, “without Top-ups” is where all the good stuff resides. As the name suggests, if the actual COE price is higher than the price you paid for the package, you will not be required to top up to secure your COE. And if the COE amount falls below the price you paid for the package, you get a COE rebate. The best deal, by far, as it is straightforward, transparent and hassle free.
CAT E COE (Open Cat)
Occasionally, dealers might offer CAT E COE (Open Cat) to buyers, especially if they are in a rush to register their new car. Should you take it if it’s offered to you?
Open Cat COE can be used on any type of vehicle, except motorbikes. Upon successful bidding, holders of Open CAT COE are allowed to transfer it once to another party to be used to register a new vehicle in CAT A, CATB or even CAT C. They normally cost more than CAT A and CAT B COE due to the flexibility and transferability. Occasionally, dealers might offer Open Cat COE to you. If there is no cash top up on your part, go ahead and register your new car with the Open CAT COE. Though Open CAT COE usually costs more than CAT A/B, your car’s actual COE value is pegged to the prices of the successful CAT A/B COE bid in the same bidding window, or CAT E, whichever is lower. For example,
| July 2021 Second COE Bid | |
| CAT A | $47,010 |
| CAT E (Open Cat) | $60,001 |
If your CAT A car was registered with CAT E COE, your COE rebate would be based on $47,010, not $60,001!
| March 2020 First COE Bid | |
| CAT A | $32,699 |
| CAT E (Open Cat) | $32,500 |
In this example, if your CAT A car has been registered with CAT E COE at $32,500, though the successful COE bid for CAT A in the same window was higher at $32,699, your COE rebate will be based on $32,500. Always remember, it will be based on the lower of the 2 figures in the corresponding categories.
Some unethical dealers might claim you stand to gain a larger rebate from the higher CAT E COE, and get you to top up exorbitant amounts when in fact, you do not stand to gain anything at all. Always do your research before committing to a deal.
A word regarding Number of Bids, Top-ups and Rebates
Let’s look at some of the terms that are used in tandem with COE packages. Let’s explore them individually to see what they are and how it can impact your buying decision.
- Number of Bids – This is the number of bids your dealer will need to secure your COE. They usually range from 1-6 bids. Generally, the more bids there are, the cheaper the COE package will be. This is because with more bids to play with, the dealer can have more time and chances of securing a lower COE is higher.
A 2-bids Guaranteed COE Package will see you secure your COE within a month while a 6-bids Guaranteed COE Package will probably have you waiting for up to 3 months before you can secure your COE. What bid amount should you look for in the COE packages? What should you consider?
First, you must ask yourself how urgently do you need your car?
Secondly, check the stock availability because there is no point getting your COE early when there is no stock available. Lastly, the number of bids in your COE package may not always match up with the timeline to secure your COE. This is to say that 2-bids does NOT always mean 1 month and 6 Bids does not always mean 3 months, so on and so forth.
Why is it so? Because some dealers may argue that, unless previously agreed upon, the bids need not be submitted consecutively. This is unethical business practice and a poor excuse to buy time. Nevertheless, you don’t want to be caught by it.
As mentioned above, it is always more advisable to set the timeline to secure your COE with a date rather than with the number of bids.
- Top Ups – It is very important to know and set your top up amount in tandem with your purchase price and the COE amount that is packaged in your deal. Whether you should go for a higher purchase price with a lower top up or a lower purchase price with a higher top up will depend on the COE amount which your dealer has packaged in for you. Before you sign on the dotted lines, make sure your purchase price, top up and the COE amount which your dealer has indicated are competitive and reasonable. Be prepared to top up and don’t always assume that the COE will come down. Keep a clear mind and go with your head rather than your heart.
- COE Rebates – Like a bonus and that is hard to come by, COE rebates are somewhat of a rarity. Not anymore though if your COE rebate amount is the same as the amount that you dealer has packaged in for you in your COE package.
In the past, dealers would set the COE rebate at a ridiculously low amount such that any significant drop in the COE premium which was supposed to translate to additional savings through rebates will not be passed on to the buyers. Today, more dealers are becoming transparent to make the COE rebate amount the same as the amount that they have packaged in for you in your COE package. Now, that’s fair and 100% transparent. So, the next time you shop for a car, make sure your COE rebate amount and your COE packaged amount is the same. If they are not, then you may want to consider buying from another dealer instead. At Venture Cars, our COE rebate level is always competitive and is of the same amount as our COE packaged amount. For the record, the highest rebates that we have ever given out is more than $9000 (You can imagine how pleasantly surprised our customer felt). That’s like hitting the jackpot but don’t just take it from us, here’s what some of customers have to say about COE rebates.
Feel free to speak to us if you have a burning question about COE packages or if you are simply looking for a new car. What you see in our inventory (insert link to our car page) is what you will get and Venture Car is committed to serving all of our customers with the utmost transparency and dedication.
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