What Is PQP? How the Prevailing Quota Premium Is Calculated

Most articles about COE focus on bidding — the twice-monthly auction where new car buyers compete for a limited quota. But there’s a second, quieter way people pay for a COE in Singapore, and it doesn’t involve bidding at all.

If your car is approaching its tenth birthday and you want to keep it, you don’t join the auction. You pay the Prevailing Quota Premium, or PQP. Here’s how that number is arrived at, and why it behaves quite differently from the headline COE price you see in the news.

PQP in One Sentence

The PQP is a moving average of recent Quota Premiums — the price you pay to renew an existing COE rather than bid for a new one.

That’s the whole idea. Instead of exposing renewing owners to whatever a single auction happens to produce, the system averages the recent past. You pay something close to the market rate, but smoothed.

How the Average Is Worked Out

The PQP for a given category is based on the Quota Premiums from that category’s most recent bidding exercises over the past three months.

Because Singapore runs two bidding exercises a month — a first and a second round — three months of history means roughly six data points feed the average. Each new round drops the oldest result out of the window and pushes the newest one in.

A simplified worked example. Suppose the last six Category A results were:

Round	Quota Premium
1	$92,000
2	$94,000
3	$96,000
4	$98,000
5	$101,000
6	$103,000

The average of those six figures is $97,333. That, roughly, is what a renewing owner in that category would pay — even though the most recent auction closed at $103,000.

Note what happened there: in a rising market, the PQP sits below the latest auction price. The averaging lags the market. That lag is the single most important thing to understand about PQP, and we’ll come back to it.

These are illustrative figures, not current ones. For the actual numbers, see the latest COE results and the full Category A history.

Why the Lag Cuts Both Ways

Because PQP is backward-looking, it produces two opposite situations depending on where the market is heading.

When prices are rising, the PQP trails behind. Renewing looks relatively cheap compared with what new-car buyers are paying at auction that fortnight. Owners who renew during a sustained climb often feel they got a bargain.

When prices are falling, the same mechanism works against you. The average still contains the expensive rounds from two or three months ago, so the PQP stays high while fresh auction prices drop. Renew at that moment and you’re paying yesterday’s prices.

This is why watching the trend matters if your renewal window has any flexibility in it. You aren’t trying to predict the market — you’re trying to notice which direction the average is being dragged.

PQP Is Per Category

There isn’t one PQP. Each COE category has its own, because each is averaged from its own auction results:

Category A — smaller, less powerful cars
Category B — larger or more powerful cars
Category C — goods vehicles and buses
Category D — motorcycles
Category E — open category

You renew against the PQP of the category your vehicle falls under. A Cat B car renews at the Cat B PQP, and that figure can differ substantially from Cat A. If you’re unclear which category your car sits in, our guide to Cat A vs Cat B explains where the line is drawn.

The 10-Year and 5-Year Choice

When you renew, you choose how long to renew for, and the PQP is the reference price for both options:

10-year renewal — you pay the full PQP. At the end, the car can be renewed again.
5-year renewal — you pay half the PQP. But this one is final: at the end of the five years the car must be deregistered. It cannot be renewed again, and there is no rebate at the end.

The 5-year option is not simply “half price.” It’s half the term and a one-way door. Which one makes sense depends on the car’s condition and how long you genuinely intend to keep it — we work through that trade-off in detail in our guide to 5-year vs 10-year renewal.

What Renewing Costs You Beyond the Cash

There’s a second cost to renewing that doesn’t appear on any invoice: renewing forfeits your PARF rebate.

The PARF rebate is the portion of the ARF you’d get back if you deregistered the car instead. Once you renew, that entitlement is gone for good — the car has no PARF value after its original ten years. Our post on the PARF rebate explains how it’s calculated and why it disappears at the ten-year mark.

So the real comparison isn’t “PQP versus nothing.” It’s:

PQP paid out + PARF rebate given up versus the cost of replacing the car

That’s a bigger number than the PQP alone, and it’s the reason the renew-or-scrap decision catches people out. Our renewal vs scrapping guide walks through both sides.

A Worked Renewal

Suppose a Category A car is coming up to ten years, the current Cat A PQP is $97,000, and deregistering it now would return a PARF rebate of $12,000.

Renew for 10 years: pay $97,000, forfeit the $12,000 rebate. Effective cost of keeping the car: $109,000 for ten more years, or about $10,900 a year before running costs.
Renew for 5 years: pay $48,500, forfeit the same $12,000. Effective cost: $60,500 across five years, about $12,100 a year — and nothing at the end.
Deregister: receive $12,000, and go shopping with whatever a replacement costs.

Per year, the 10-year renewal is the cheaper of the two renewal options. That surprises people who assume the 5-year is the budget choice. It’s cheaper in total, not per year.

Again — hypothetical figures. Put your own into the COE renewal calculator to see the real ones.

The Bottom Line

The PQP is a three-month moving average of recent Quota Premiums, calculated per category, and it’s the price you pay to renew rather than bid. Because it’s an average, it lags the market: flattering in a rising market, punishing in a falling one.

Before you commit, work out the full picture — the PQP, the PARF rebate you’d be giving up, and the per-year cost of the 5-year versus 10-year option. Our COE renewal calculator does all three, and the latest results show you which way the market is currently pulling the average.

Our free app tracks prices every bidding round, and its My Car feature can remind you before your COE expiry date arrives — so the renewal decision isn’t one you make in a hurry.

This article is for general information only and is not financial advice. PQP formulas and renewal rules are set by the LTA and can change; confirm current figures and conditions with the LTA before deciding.