It's unsurprising that Certificate of Entitlement (COE) premiums are expected to take a hit (amongst many other things), due to the pandemic.

While it may be exciting to buy a new car, we reckon that it's better to save money and simply opt for a COE renewal on your current car. But, should you renew your COE for five, or 10 years?

Price wise, five-year COE premiums are naturally cheaper than 10-year COE premiums.

Do note however, that for the five year COE renewals, your car must be deregistered after five years and cannot be renewed any further. Whereas for 10-year COE renewals, you can renew your COE an unlimited number of times.

There are other things to factor in and we'll walk you through it.

• What is PQP and why does it matter?
• How is PQP calculated?
• Do I only need to pay for PQP?
• How expensive is road tax after 10 years?
• Can my car last an additional 10 years?
• When is the best time for a COE renewal?

 
 
What is PQP and why does it matter?

To keep your existing car and drive it on road, you need to pay the Prevailing Quota Premium (PQP).

The PQP is the amount you'll have to pay when you go for a COE renewal.

It makes economical sense to extend the life of your car if you car is still in good condition, accident-free and you have been dilligent with its servicing and maintenance.


How is PQP calculated?

To calculate the PQP, you'll have to take the past three-month average of COE premiums.

You can keep track of the latest PQP rates all via our COE page here!

Seeing a five-digit amount you have to pay for can be a little daunting. Great news! There are COE renewal loan options available for you! 

For 10-year COE renewals, repayment can span across seven years. While for five-year COE renewals, repayment can span across five years.


Do I only need to pay for PQP?

Yes, when you go for a COE renewal, you will only need to pay the PQP to extend the 'life' of your car.

However, by choosing for a COE renewal, you will have to forfeit the Preferential Additional Registration Fee (PARF) rebate which you would otherwise receive should you deregister your car. 

Find out more about PARF rebate and car deregistration here
 
 
How expensive is road tax after 10 years?

Annual road tax surcharge rises with the age of your vehicle. That means you're paying more on top of your current road tax.

Cars aged 10-years old and above will have an additional surcharge levied on the car's road tax. The amount chargeable is 10% of the car's regular road tax rate per annum, capped at a maximum of 50%.

The surcharge for cars with larger engines are more significant. Take for instance a car with an engine capacity of 2,362cc. The payable annual road tax before it hits the 10-year mark would be $1,638. By the 11^th year and 12^th year, this amount rises to $1,802 and $1,966 respectively. By 15^th year, the payable annual road tax hits the maximum chargeable amount of $2,458, which is 150% of $1,632. 

With so much to pay for, it's no wonder that Singapore has a 'young' vehicle population. Most car owners prefer paying more for a new vehicle instead of paying for additional road taxes.

Plus, your car's value will continue to depreciate even after COE renewal, thus, you'll be losing even more money. 
 
 
Can my car last an additional 10 years?

Yes, if your car is in good shape. Such cars are regularly serviced and accident-free.

To determine your car's condition, get a professional opinion from car workshops. They'll tell you which internal parts are likely to pose problems in the long-run.

Alternatively, you can use sgCarMart Connect for COE renewal services. We provide complimentary car checks to help you determine if your car is suitable for COE renewal 
 
 
When is the best time for COE renewal?

You'll want to go for a COE renewal when the PQP is low, but don't do it right before your current COE expires, or you'll end up forfeiting any unused portion of your current COE!

Instead, start monitoring the COE prices three months before your COE expires. Sgcarmart Connect can help you decide on the best time to renew your COE with a free, personalised advice. If you are taking a loan for the COE renewal, the loan approval will typically take one working day and the renewal process another three working days. Contacting us five working days before the week you'll want to go for that COE renewal will enable us to process your loan smoothly.
 
 
Here are some COE Renewal Related articles that might interest you

10 things you should know about renewing your COE

Should I renew my car COE in 2020?

A simple guide to COE renewal: How & when should you renew

*This article was updated on 27 September 2022