Half Month PQP?

Confused? We were too, until we found out why!

Delicious, but does this work for PQP (COE renewal)?

Back story to this starts from the COE fall for Cat A for the first bid of September 2017 to only $36,001 – a seven year low, at levels last seen in 2010.

This made many people sit up and notice, both for those who are aiming for new cars (those aiming to purchase a new car, do read this about COE drops), and for those hoping to renew COE. For those hoping to renew, please also take a look at how current COE is not the PQP, which is the price you pay for renewing.

Yes, we clarified how the PQP for renewing is not the current COE price, but why were we confused? So, due to the dip in Cat A, we had callers asking about COE renewal loans for their cars and telling us that the renewal is now a certain figure and good to proceed, but that the figure does not match any PQP figure from LTA!

I think much of the confusion comes for the common term COE renewal loan, when actually we pay PQP to renew the COE of a car – calculated from the past 3 months, or six bids’ average. However, the reason why customers end up with a different figure in mind is because if they take the latest six bids average, they actually calculate using half month’s bid from September (the low $36,001 for Cat A is only first bid of September 2017 and only half the month’s COE bidding has been complete as of today, 15th of September).

Let me clarify further…

There is no half month for PQP calculations

Example, to calculate October 2017 PQP figure, we have to calculate with full month’s bidding from July, August, September, using both bids of each of these three months. We cannot use half of the month to calculate even if that results in a favorable figure.

I love cheese, and as much as I like it, usually, I buy half a small wheel. However, with the PQP, as much as we would like to pay the lower figure that sometimes results from using latest 6 bids, we cannot buy “half month PQP”!

Posted in Car Owner's Notes, Loan News