When your COE is expiring, a 10-year renewal often feels cheaper than buying another car. But financially, it is a capital exposure decision: you are committing a large amount of money into a new depreciation runway — and you are also giving up PARF permanently (if eligible).
Fast path (do this in order)
This page focuses specifically on 10-year renewal: when it’s rational, when it’s a trap, and how to price PARF loss + repair risk.
A 10-year COE renewal means you pay the Prevailing Quota Premium (PQP) at the point of renewal. That payment becomes your new COE runway for the next 10 years — and therefore your new depreciation base.
Think of it like this:
For the structural COE cost engine, use: COE cost in Singapore (2026).
If your car is PARF-eligible (typically below 10 years), you may be entitled to a PARF rebate if you scrap/export instead of renewing. Once you renew COE, you permanently forfeit that PARF rebate.
Simple lens
You don’t need perfect accuracy — you need to avoid excluding the biggest hidden trade-off.
If you’re comparing renewal vs replacement, anchor the decision on total ownership cost, not instalments: 5-year cost model · monthly realism model.
Most people choose 10 years because it looks cheaper per year. That can be true — but you’re also choosing a different risk profile.
| Factor | 5-Year Renewal | 10-Year Renewal |
|---|---|---|
| Annualised COE cost | Usually higher | Usually lower |
| Lock-in | Medium | High (long commitment) |
| PARF forfeiture | Yes | Yes |
| Repair/age risk exposure | Lower time exposure | Higher time exposure |
| Best fit | If you want shorter commitment | If car is stable + you want long certainty |
For the 5-year renewal version: 5-Year COE Renewal: Worth It?
Renewal is not competing only against “buying a new car”. The most common rational alternative is switching into a lower-depreciation used car with a cleaner risk profile.
Compare these (same horizon):
Use: Used vs New (2026)
If your broader question is “should I even own a car?”, start here: Is it worth owning a car? and run the break-even calculator.
If you’re making the decision during elevated cycle risk, also use: Buy now or wait (COE timing framework).
10-year renewal tends to be rational if:
It’s usually a mistake if:
Next step: read the master decision framework here, then anchor your assumptions using the 5-year cost model and the monthly model.
It depends on PQP, your car’s condition, and what you would switch into. Renewal can beat buying new if your car is stable, but can lose to switching into a lower-depreciation used car once you include PARF forfeiture and repair risk.
Yes. Renewing COE forfeits your PARF rebate permanently (if eligible). Treat this as part of your effective renewal cost.
10-year renewal often reduces annualised cost but increases lock-in and long-term repair exposure. If you want shorter commitment, compare against: 5-year renewal.