The COE Factor Nobody Charts: Why Renewal Rates Predict Prices Better Than Quota
12 April 2026 · 11 min read · PaperValue.sg
Every time COE prices hit a new record, the same three explanations show up in your feed. Quota too low. EV demand too high. Chinese brands flooding Cat A. Rinse, repeat, share on Hardwarezone.
And look — those things are real. I'm not going to sit here and tell you supply and demand don't matter.
But there's a factor driving COE prices that nobody talks about. Nobody charts it. Nobody includes it in their armchair analysis. And when I pulled the LTA data and plotted it against COE premiums, the correlation was so clean I double-checked the numbers three times.
It's the COE renewal rate.
Specifically: the percentage of car owners who, when their 10-year COE expires, choose to quietly renew instead of scrapping and buying a new car. That number has collapsed. And it's doing more damage to your wallet than any quota announcement.
The Data Nobody Puts Side by Side
Here's what happens when you plot car renewal rates (Cat A + Cat B combined) against the annual average Cat A COE premium:
| Year | Car Renewal Rate | Cat A COE (Annual Avg) |
|---|---|---|
| 2015 | 12.1% | ~$61,300 |
| 2016 | 25.1% | ~$49,300 |
| 2017 | 27.8% | ~$46,000 |
| 2018 | 32.6% | ~$33,700 |
| 2019 | 42.1% | ~$30,100 |
| 2020 | 32.9% | ~$35,500 |
| 2021 | 24.9% | ~$46,300 |
| 2022 | 15.8% | ~$74,300 |
| 2023 | 13.1% | ~$93,800 |
| 2024 | 20.1% | ~$90,500 |
| 2025 | 22.0% | ~$102,300 |
Read those bolded rows again.
When renewal rates peaked at 42.1% in 2019, Cat A COE was at its lowest — $30,100. When renewals bottomed out at 13.1% in 2023, COE tripled to $93,800.
The lines practically mirror each other. High renewals, low COE. Low renewals, high COE. Year after year after year.
Now, correlation isn't causation. I know. You learned that in JC. But stick with me for a minute, because the mechanism behind this correlation is so straightforward it's almost embarrassing that nobody talks about it.
The Asymmetric Math That Explains Everything
Here's the thing about COE renewal that most people don't think about.
When you renew your COE, you pay the PQP — the Prevailing Quota Premium, which is just a 3-month trailing average of recent COE bids. You go on OneMotoring, click a few buttons, pay the money, done. You don't enter the bidding. You don't compete with anyone. You and the COE auction exist in completely separate universes.
Your car stays on the road. No COE gets released. No bid gets placed. The auction doesn't even know you exist.
Now compare that to what happens when you don't renew. You scrap the car (or sell it for deregistration). One COE goes back into the quota pool. Great — more supply. But you still need a car. So you walk into a showroom, pick out a shiny new BYD or Tesla, and now you're bidding for a new COE.
One COE released. One new bid added. Sounds like a wash, right?
Not even close.
That one COE you released doesn't go to you. It goes into the shared pool where it gets fought over by every dealer, every PHC operator, every upgrader, every first-time buyer, and every other owner who also scrapped instead of renewing. Your single COE gets diluted across thousands of bidders. Your single bid adds concentrated demand.
Let me make this concrete. Say 1,000 cars hit their 10-year mark this month.
Scenario A: 500 renew, 500 scrap. 500 owners quietly pay PQP and disappear. The other 500 scrap their cars, releasing 500 COEs into the pool. Those same 500 owners now bid for new COEs. But those 500 extra COEs are shared across all bidders in the market — not just the 500 who scrapped. Net effect: moderate increase in bidding pressure.
Scenario B: 100 renew, 900 scrap. Only 100 owners renew. The other 900 scrap and enter the bidding. 900 extra COEs hit the pool, but 900 extra bids hit the auction too — and those COEs are again diluted across the entire market. Net effect: significantly more bidding pressure than Scenario A.
The fewer people who renew, the more people who bid. And since each bidder's demand is concentrated while each released COE's supply is dispersed, the system gets more competitive as renewal rates drop.
Every owner who doesn't renew is a net increase in auction pressure. That's not opinion. That's arithmetic.
The Collapse in Numbers
So how bad is the collapse? Let's look at the raw numbers.
| Year | Car Renewals (Cat A + B) | Total Renewals (All Categories) |
|---|---|---|
| 2015 | 9,919 | 26,052 |
| 2016 | 29,531 | 44,303 |
| 2017 | 31,088 | 55,868 |
| 2018 | 37,114 | 52,960 |
| 2019 | 41,777 | 58,623 |
| 2020 | 20,071 | 33,075 |
| 2021 | 11,305 | 22,435 |
| 2022 | 4,689 | 16,522 |
| 2023 | 4,403 | 16,624 |
| 2024 | 9,065 | 26,770 |
| 2025 | 13,947 | 32,783 |
Car renewals dropped 89% from 2019 to 2023. From nearly 42,000 to barely 4,400.
Think about what that means. In 2019, about 42,000 car owners quietly renewed and sat out the bidding. By 2023, only 4,400 did. That's roughly 37,000 extra people entering the COE auction who, in the old world, would have just paid their PQP and gone on with their lives.
You can fiddle with quota projections and EV adoption curves all day long. Thirty-seven thousand extra bids is the elephant in the room that nobody's pointing at.
Why Nobody Renews Anymore
So why did renewals fall off a cliff? It's not one thing. It's five things happening at the same time, all pushing in the same direction.
The 2030 deadline is doing most of the psychological damage. Singapore wants no new petrol car sales by 2030. If you renew your petrol car's COE for 10 years in 2026, you're committing to drive it until 2036 — six years past the cutoff. Charging infrastructure will be everywhere. Petrol stations might not be. Parts availability gets questionable. Resale value? Good luck finding a buyer for a petrol car in 2034. Nobody wants to be the last person holding the petrol bag.
The government is paying you to buy electric. EEAI rebates plus VES incentives can knock $30,000 off an EV's registration cost. When the gap between "renew old petrol car" and "buy new EV" shrinks from $60,000 to $30,000, the math shifts fast. Yes, the EEAI got cut and eventually expires. But even reduced incentives tip the scales.
Petrol is getting painful. With the Iran situation disrupting supply, 95-octane is sitting above $3.35 per litre. Over 10 years, the running cost gap between petrol and electric is now $23,000 to $33,000. That's real money. That's a holiday every year for a decade.
EVs are genuinely better than the car you're replacing. This isn't 2020 anymore, when EV meant "Tesla or bust." BYD, Zeekr, Xpeng — the options are deep, the tech is mature, and the 8-year battery warranties mean you're covered for the entire COE cycle. Compare that to a 10-year-old Honda Vezel that's going to need timing chains, suspension work, and a prayer.
The secondhand market sees it too. Used car buyers are leaning EV. When two cars have similar PARF value but one comes with years of remaining battery warranty and free servicing, the choice is obvious. The resale proposition for aging petrol cars is weakening by the quarter.
None of these factors existed at this scale in 2019. All of them exist now. And they're all pushing the same way: away from renewal, toward the bidding pool.
The Doom Loop
Here's where it gets truly uncomfortable.
This isn't just a one-way trend. It's a feedback loop. And once you see it, you can't unsee it.
Fewer people renew → more people bid → COE prices go up → the PQP (which trails COE prices) goes up → renewal becomes even more expensive → even fewer people renew.
When Cat A PQP is sitting at $107,000, tell me with a straight face that you'd pay that to keep a 10-year-old petrol car on the road. Of course you wouldn't. So you scrap, buy new, and add one more bid to the pile. Which pushes COE higher. Which pushes PQP higher. Which makes the next person's renewal decision even more obvious.
This is not a pendulum that swings back. It's a ratchet. Each turn makes the next turn more likely.
Now, I should be honest. The 2024-2025 data shows a slight recovery — renewal rates ticked up from 13.1% to 22.0%. That's real. Some of it is the 2015-2016 registration cohort (which was larger) coming up for renewal. Some of it might be owners locking in PQP before prices climb further.
But 22% is barely half of what it was in 2019. And the structural forces — EV transition, government policy direction, petrol cost trajectory — haven't reversed. The ratchet might pause. It's not unwinding.
What This Means for You
If you're thinking about renewing your COE: run the numbers properly. Not just the PQP against your bank balance. The full picture — PQP plus 10 years of petrol plus maintenance versus a new EV with rebates and $50/month in charging. The PQP is a trailing average, so in a rising market it might look "cheap" compared to today's bidding price. Don't let that fool you into ignoring the total cost of ownership.
If you're watching COE prices for a purchase: stop fixating on quota announcements. The more useful signal is the renewal rate. If renewals continue recovering, that's deflationary — more owners sitting out the auction. If renewals stall or drop again, brace for more upward pressure. LTA publishes monthly renewal data about six weeks after the fact. It's free. Nobody reads it. Start.
If your car is approaching 10 years: understand that your decision isn't happening in isolation. Thousands of owners face the same renew-or-scrap math every month. Collectively, those decisions shape the COE price that every buyer in Singapore pays. When you choose not to renew, you're not just making a personal financial decision. You're adding one more bid to a system that's already overloaded.
That's not a guilt trip. It's just how the math works.
Frequently Asked Questions
"What exactly is PQP?"
The Prevailing Quota Premium. It's a moving average of the winning COE bids from the last 3 months of bidding exercises. When you renew your COE instead of bidding, you pay this amount. It updates after each bidding round. For a 10-year renewal you pay the full PQP; for a 5-year renewal, 50%.
"Does this affect all COE categories?"
The data here focuses on Cat A and Cat B (cars), which make up the vast majority of the COE market. Motorcycles (Cat D) and Open Category (Cat E) have their own dynamics. But since cars dominate the system, car renewal rates have the biggest impact on overall bidding pressure.
"Will renewal rates keep recovering?"
The 2024-2025 uptick is real but modest — from 13.1% to 22.0%. The structural forces pushing against renewal (EV transition, 2030 petrol ban, rising fuel costs) haven't reversed. My bet: renewals stabilise somewhere in the 20-30% range. Well below the 42% peak. Enough to keep bidding pressure elevated for years.
"If everyone stops renewing, wouldn't COE supply increase enough to offset the extra bids?"
This is the most common pushback, and the answer is no. The math is asymmetric. Each non-renewal releases 1 COE into a shared pool of thousands of bidders, but adds 1 concentrated bid. The supply increase is diluted; the demand increase is not. More non-renewals always means more net bidding pressure. Always.
"Where do I check the current PQP?"
LTA publishes it on the OneMotoring portal after each bidding exercise (twice a month). You can see next month's PQP on the Friday after the 2nd bidding exercise of the current month. Bookmark it.
Trying to figure out whether to renew, sell, or buy new? Get a PaperValue report — we factor in COE trends, PARF rebates, renewal economics, and live market comparables so you can make a six-figure decision with actual numbers instead of gut feel.