When your COE is approaching expiry, you face one of the biggest financial decisions as a car owner in Singapore. However, the “old math” no longer applies. Following the February 2026 Budget, new tax structures have fundamentally changed the cost-benefit analysis of renewing versus selling.
What Is COE Renewal?
When your 10-year COE expires, you can either deregister the car or renew the COE for another 5 or 10 years at the Prevailing Quota Premium (PQP). The PQP is the 3-month moving average of COE prices. As of March 2026, the PQP for Cat A is approximately $106,541, while Cat B is $115,938.
Why are COE prices rising?
Industry experts attribute the March 2026 surge to a few factors:
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Three-Week Bidding Gap: There is a longer interval before the next bidding round in April, giving dealers more time to collect orders.
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Fuel Price Anxiety: With 95-octane petrol reaching $3.47/L this month, there is a massive shift toward Category A EVs and Hybrids, keeping demand in that bracket extremely high.
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Post-Festive Demand: Buying sentiment has remained resilient despite the high premiums.
5-Year vs. 10-Year COE Renewal
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5-Year COE Renewal: You pay 50% of the PQP. This has a lower upfront cost but comes with a “death sentence”—you cannot renew the car ever again, and it must be scrapped at the end of year 15.
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10-Year COE Renewal: You pay 100% of the PQP. This allows you to renew the car indefinitely (subject to inspections) and preserves resale value if you sell it before the 10 years are up.
The “Budget 2026” Game Changer: PARF Rebate Cuts
The biggest change this year is the 45% cut to PARF rebates.
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The New Reality: If you deregister a car in its 10th year now, you only get 5% of the ARF back (previously 50%).
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The Cap: Total rebates are now capped at $30,000 (previously $60,000).
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The Impact: Because you get back significantly less money for scrapping, COE renewal is now often more financially sound than buying a new car with a fresh $110k COE.
When Does COE Renewal Make Sense in 2026?
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Low Scrap Value: If your car is in good condition, the tiny 5% PARF rebate you’d get from scrapping isn’t enough to justify a new car downpayment.
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Excellent Mechanical Condition: If your engine and transmission are healthy, a $107k PQP spread over 10 years is cheaper than a new car’s depreciation.
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High Petrol Prices: With 95-octane hitting $3.47/L, if your current car is fuel-efficient (like a Hybrid), it may be worth keeping rather than switching to a thirstier new model.
When Should You Sell Instead?
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Road Tax Surcharges: Remember that for cars older than 10 years, your road tax increases by 10% every year, peaking at a 50% surcharge by year 15.
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Annual Inspections: Cars over 10 years old must pass LTA inspections every year (instead of every two), which adds cost and time.
How to Calculate If COE Renewal Is Worth It
Use this simple formula to find your “Break-even” cost:
Annual Cost = (PQP + Current Scrap Value) / Years of Renewal
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PQP: What you pay to renew.
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Current Scrap Value: The PARF rebate + Body value you “give up” by not scrapping now.
Compare this figure against the Annual Depreciation of a replacement car. In 2026, a renewed COE car typically “costs” $11,500/year, whereas a new entry-level car often exceeds $16,000/year.
Ready to Decide?
At Vision Motoring SG, we specialize in “End-of-Life” consultations. We will calculate your exact PARF loss under the 2026 rules and help you decide if your current ride is worth another 5/10 years COE renewal. Visit our showroom @ North Spring Bizhub, 7 Yishun Industrial Street 1 #01-32, Singapore 768162 or WhatsApp us for a custom valuation today.