Should You Renew or Scrap Your COE?
For Singapore vehicle owners approaching the 10-year mark, the decision to renew the COE or scrap the vehicle is one of the most significant financial choices in the vehicle ownership lifecycle. The right answer depends on your vehicle’s condition, the current PQP, your budget, and your future plans.
The costs, trade-offs, and decision factors for each option are examined below.
The Cost of COE Renewal
Renewing your COE costs the Prevailing Quota Premium (PQP) for your vehicle category, multiplied by the number of years you renew (5 or 10). As of mid-2026, PQP stands at approximately S$92,000 for Cat A, S$108,000 for Cat B, and S$71,000 for Cat C. A 5-year renewal would cost half of these amounts.
If you choose to renew, you also need to factor in: (1) road tax for the renewed period, (2) insurance costs, (3) any repairs needed to keep the vehicle roadworthy for another 5-10 years, and (4) the opportunity cost of using that cash for a down payment on a newer vehicle.
The Cost of Scrapping
Scrapping your vehicle means deregistering it with LTA. You will receive the paper value of the vehicle (the unused portion of COE and remaining ARF), which can be used towards the purchase of a new vehicle. The PARF (Preferential Additional Registration Fee) benefit, if applicable, provides additional rebate for vehicles under 14 years old.
The main costs of scrapping and replacing are: (1) the down payment on a new vehicle (typically 30-50% for COE loans), (2) higher annual depreciation on a new car, and (3) the transaction costs of buying and registering a new vehicle.
Decision Matrix
| Factor | Renew COE | Scrap & Replace |
|---|---|---|
| Upfront Cost | Lower (PQP × 5 or 10 years) | Higher (down payment on new vehicle) |
| Monthly Payments | Lower (spread over 24–60 months) | Higher (new car loan) |
| Vehicle Condition | Must be reliable for 5+ more years | No concern — new vehicle |
| Technology | Existing features only | Newer safety, efficiency, and connectivity |
| Road Tax | Higher for older vehicles | Based on new vehicle |
| PARF Benefit | Forfeited after 14 years | Retained if scrapped before 14 years |
When Renewing Makes Sense
- Your vehicle is well-maintained and reliable.
- The PQP for your category is at a cyclical low.
- You want to minimise upfront cash outlay.
- You plan to drive the vehicle for another 5+ years regardless.
- You can secure a COE loan with favourable terms.
When Scrapping Makes Sense
- Your vehicle requires major repairs (engine, transmission, structural).
- The PARF rebate is still significant (vehicle under 14 years).
- You want access to newer safety or fuel-efficiency technology.
- Your budget allows for a down payment on a replacement.
- You plan to change vehicle type or category anyway.
Frequently Asked Questions
Yes, COE loans are available to finance the renewal cost. These are secured against the vehicle and repaid over 24-60 months.
PARF (Preferential Additional Registration Fee) provides a rebate when a vehicle is deregistered before 14 years. The rebate decreases with vehicle age.
The full process — deregistration, COE bidding, vehicle purchase, registration — typically takes 2-4 weeks.
Related Articles
coe guides
Cat A vs Cat B vs Cat C COE: What's the Difference?
Singapore's COE system has five categories (A, B, C, D, E) for different vehicle types. Learn which category applies to your car, motorcycle, or commercial vehicle.
2026-03-15T00:00:00.000Z · 6 min read
coe guides
COE Loan Eligibility Singapore: Who Can Apply?
Check COE loan eligibility requirements in Singapore for citizens, PRs, and Employment Pass holders. Find out what lenders look for in a COE renewal loan application.
2026-04-10T00:00:00.000Z · 6 min read
coe guides
COE Loan for EP Holders in Singapore: Eligibility & Requirements
Employment Pass holders can qualify for COE loans in Singapore with minimum annual incomes of S$60,000–S$80,000. Learn which lenders accept EP holders and what documents you need.
2026-03-10T00:00:00.000Z · 6 min read