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?
Senior correspondent Christopher Tan replies:
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.
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