Saving on PQP: “Smart Is Good, Don’t Add Smart”

Interesting concept popped up when from a chat with a customer keen to renew his car’s COE – he confidently claimed that he can still renew his car next month, even though the expiry was this month. That’s true actually as there is a one month grace period, but the idea was if next month’s PQP is lower, then he will save money! Ker-ching! Ten years renewal at a five years price! No, just kidding.

Maybe he read about the possibility of getting savings by renewing in an earlier month before expiry. We wrote about this before and we do encourage all who wish to save on PQP to take a look.

But this customer proposed something different, he wants to renew in the month after expiry, which in my humble opinion, I replied, “But you don’t save anything and end up needing to pay the late fee?” I think I may not have been clear enough on the phone, or perhaps or earlier article on PQP savings may have been misleading (Though I’m not sure he read it).

Just to make sure I had my understanding in the right place, we have since clarified with LTA, this is what happens when you decide to renew after the expiry date of your COE

  • You pay the late fee (no quarrel about that this customer was aware of the fact) which varies based on the engine capacity of your car. The higher the engine capacity, higher late fee charged.
  • You cannot drive on the road during the period after expiry of COE and before renewal – or face a heavy penalty for doing so.

And this part not many people may know:

  • You have to pay for the full road tax upon renewal, even the period of the road tax which covers that time when your car was parked.
  • You pay the PQP of the month in which your car expires, even if you do the process after the month of expiry at LTA! i.e.: Your car expires in September but you wait till October, hoping to pay October’s PQP – nope, you still pay September’s PQP when you arrive at LTA.

And so, in summary, overall, it’s much better to pay prior to expiry!

As the famous hokkien saying goes, (directly translated) “smart is good, don’t add smart!”

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