COE Renewal vs Scrapping: Is It Worth Renewing Your COE?
As your car approaches the end of its 10-year Certificate of Entitlement (COE), you face a decision that can cost — or save — tens of thousands of dollars: renew the COE, or deregister (scrap/export) the car? This guide breaks down how COE renewal works and the factors worth considering.
What Happens When a COE Expires?
A COE is valid for 10 years. As that 10-year mark approaches, you have three broad options:
- Renew the COE by paying the Prevailing Quota Premium (PQP) — keep driving the same car.
- Deregister and scrap the car locally.
- Deregister and export the car overseas.
Crucially, once a COE reaches its full 10-year term, there is no PARF rebate (more on that below). So at the 10-year point the choice is really between paying to renew or letting the car go.
What Is the PQP (Prevailing Quota Premium)?
To renew, you pay the PQP, which is the moving average of COE Quota Premiums over the last three months for that category. Because it’s an average, the PQP smooths out the spikes you see in individual COE bidding results — you don’t have to bid, you simply pay the prevailing rate.
You can see the current PQP and 5-year vs 10-year renewal cost for every category on our COE renewal cost page, and track how the underlying prices have moved on the Category A and Category B history pages.
5-Year vs 10-Year Renewal
| 10-Year Renewal | 5-Year Renewal | |
|---|---|---|
| Cost | 100% of the PQP | 50% of the PQP (pro-rated) |
| Renewable again? | Yes | No — the car must be deregistered at the end |
| Best suited to | Keeping the car long-term | A shorter, final stretch of ownership |
A 10-year renewal keeps your options open. A 5-year renewal costs less up front but is a one-time extension — at the end of those five years the car must be deregistered.
What About the PARF Rebate?
The PARF (Preferential Additional Registration Fee) rebate is a refund of part of a car’s Additional Registration Fee, but it only applies when a car is deregistered before it turns 10 years old. For a car registered with a normal COE, the PARF rebate is typically 50% of the car’s Open Market Value (OMV).
The key takeaway: the PARF rebate is a reason some owners scrap a car before the 10-year mark rather than near the end. Once you reach the 10-year expiry, that rebate is gone, which changes the maths of the renew-versus-scrap decision.
Factors Worth Considering
- The current PQP — renewing when the 3-month average is high means locking in a high cost. Watching the latest results helps you see where the average is heading.
- The car’s condition — an older car may face rising maintenance and parts costs over a renewed term.
- Road tax surcharge — cars older than 10 years pay an annual road tax surcharge that increases each year.
- Your usage — how many more years you realistically need the car.
- Replacement cost — buying a new car means paying today’s COE plus the car price; renewing avoids the car price entirely.
How the App Helps
The free COE Price Tracker app lets you monitor the prices that feed into the PQP, set a price alert for your category, and view long-term trends — so you can time a renewal decision with the full history in front of you.
This article is for general information only and is not financial advice. For the latest official rules and figures, refer to the Land Transport Authority (LTA).
Related reading: What Is COE in Singapore? · How to Save Money on COE
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