5 years or 10?
The renewal term decision

The government charges the same either way

Start with the fact that settles half the argument. A 10-year renewal costs the full PQP — currently about $123,000 for a Cat A car. A 5-year renewal costs exactly half. Not 55%, not 60%. Half.

Which means that measured in the only unit that matters — dollars per year of road time — LTA charges you an identical rate whichever you pick. The 5-year is not a discount for commitment-shy owners and the 10-year is not a bulk deal. On the government's side there is no deal at all.

This matters because the question is usually answered backwards. "Take five years if money is tight" is the standard advice, and it's not wrong so much as incomplete — it skips the part where the five-year option quietly ends the car's life.

Where the two actually differ

Four differences, in rough order of how much they should weigh on you:

The third row is the one people underweight and the fifth is the one nobody mentions. Take them in turn — the financing first, because it's where the real money is, and the one-way door second, because it's where the real risk is.

A note on categories before we go further: the "no second renewal" rule applies to Cat A, Cat B and Cat D. Cat C — goods vehicles and buses — can take repeated 5-year renewals up to the statutory lifespan, which makes this a genuinely different decision for commercial owners.

The cost per year, side by side

Here is the comparison done properly, at the current Cat A PQP, with everything financed at $0 down. The middle column is the one to read.

Look at the first two rows. Per year of driving they are the same number — because the COE costs the same per year and the loan runs the same length at the same rate. Nothing separates them but scale.

Now look at the third. Stretching the 10-year renewal across the full ten years costs roughly $1,797 more per year than either of the others. That gap has nothing to do with the COE. It is entirely the price of borrowing more money for twice as long, on a flat-rate loan, at the higher tier that applies beyond seven years.

The one-way door

For a Cat A, Cat B or Cat D vehicle, the 5-year renewal can be taken once. When those five years expire the car must be deregistered. There is no second 5-year renewal, no switching to a 10-year partway through, and no appeal.

So the five-year option isn't really "five more years." It's the last five years. You are setting a date on which the car leaves, five years out, and paying for the privilege in advance.

There's a subtler cost too. A car with a five-year renewal and three years left is worth less to a buyer than the same car with a ten-year renewal and three years left, because the buyer inherits the same dead end. It narrows your exit as well as your driving.

None of which makes the 5-year wrong. It makes it a decision about the car's ending, not just its financing — and it deserves to be made on those terms.

When five years is the right answer

Four situations where it's clearly the better call:

Notice what's absent from that list: "COEs are high right now, so I'll take five and renew later when they're cheaper." For a private car that plan doesn't exist — there is no later renewal to take. Whatever you think COE prices will do, the timing lever available to you is which month you renew in, not which term you pick. That one is covered in the PQP guide.

When ten years is the right answer

The 10-year is the default for a reason, and it's not inertia. Three cases where it's plainly correct:

You intend to keep the car indefinitely. A sound car you like, in a household that isn't changing shape. Ten years costs more in total because it buys more, and it leaves the option to renew again after that.

You're not certain either way. Uncertainty argues for the option, not against it. The 10-year can be ended early — deregister whenever you like — while the 5-year cannot be extended. One of those doors opens from both sides.

You want the lowest possible monthly. Spreading the full PQP over ten years produces the smallest instalment of any option here, at roughly ~$1,348 for Cat B. It costs the most in total — but if the monthly is what has to fit, this is the option that fits it.

The mistake that costs the most

It isn't picking the wrong term. It's picking the term by looking only at the monthly.

The monthly is the number every quote leads with, and it's the number that flatters the longest tenure most. Sort the options in this guide by monthly and the full ten-year loan wins — while quietly costing the most per year of anything on the table. Sort by total and the 5-year wins, while quietly ending the car's life. Neither ranking is the answer, because neither question is the whole question.

If the term is settled but the process is not, the step-by-step renewal guide covers eligibility, the deadline and how to pay. And one question sits underneath all of them: is renewing right at all? A 5-year renewal on a car that needs a gearbox is still money badly spent, and the rebate you forfeit by renewing is real either way. Both are laid out in renew or scrap and the rebates guide.

If you've settled the term and just want the figure, the calculator below runs both against this month's live PQP. Or tell us your car and your expiry date, and we'll come back the same day with your exact monthly on each option — no fees, no obligation.