Workshops benefiting from growing number of older cars
Business up for workshops as more car owners choose to renew COEs instead of scrapping their vehicles
Singapore's car population has aged in the last decade, ramping up business for workshops.
According to Land Transport Authority (LTA) statistics, the number of cars nine years or older stood at 163,323 as at end-2017, making up 26.7 per cent of the car population.
In 2007, there were 30,529 such cars - only 5.9 per cent.
The statistics showed the percentage of older cars climbing sharply from 2013, when new car prices shot up on the back of near-record certificate of entitlement (COE) prices.
COE premiums hovered close to $100,000 that year.
This prompted many owners to revalidate the COE on their cars instead of buying a new one.
Each COE lasts for 10 years. Motorists can extend it for five or 10 years by paying the prevailing quota premium, which is an average of prices in the preceding three months.
Mr Jeremy Soh, director of workshop operator Ricardo Auto Centre, said: "From an annual depreciation standpoint, COE extension is very reasonable."
Currently, renewing a car COE for five years costs over $20,000, and $40,000 for 10. A new car with COE starts from around $80,000.
The trend should continue. According to the LTA, 31,088 car COEs were revalidated last year - 5.3 per cent more than the previous record high in 2016.
Mr Soh said that with several popular cars such as the Honda Vezel having been accorded carbon tax breaks in recent years, more people will choose to keep their cars beyond 10 years.
This is because the scrap rebate of such cars - which is forfeited once a vehicle becomes 10 years old - is substantially smaller after the carbon rebate.
Hence, owners would have to forgo much less should they choose to keep their cars.
Mr Soh added: "People are realising that they don't need to change their car every 10 years."
As a result, business for workshops has been brisk.
Mr Joey Lim, managing director of workshop Harmony Motor, said motorists tend to "minimise maintenance" once their cars turn eight years old.
Hence, if they decide to revalidate the COE, they end up spending "quite a bit on repairs".