Torque Shop

I am thinking of buying a 10-year-old car with a certificate of entitlement (COE) which has been extended for another 10 years. Would this be advisable?

Typically, it makes good economic sense to use a car for as long as it is mechanically sound.

The longer a period you depreciate an investment over, the less cost you incur a year.

Having said that, it is wiser to do so with a car which you have owned. That is because you would have intimate knowledge of how reliable it is, as well as all its idiosyncracies.

Buying a COE-revalidated vehicle from someone else (usually a dealer) comes with risks. Often, the older the vehicle, the higher the risks.

You can mitigate the risk by sending the vehicle to a third-party assessor, but there will still be issues which cannot be detected - until it is too late.

So, I would advise against getting the car, unless you know the seller well.

Christopher Tan

A version of this article appeared in the print edition of The Straits Times on January 06, 2018, with the headline 'Torque Shop'. Print Edition | Subscribe