diff --git a/src/lib/__tests__/getPqpRates.test.ts b/src/lib/__tests__/getPqpRates.test.ts
new file mode 100644
index 0000000..db66421
--- /dev/null
+++ b/src/lib/__tests__/getPqpRates.test.ts
@@ -0,0 +1,329 @@
+import getPqpRates from "@/lib/getPqpRates";
+import { type COE, VehicleClass } from "@/types";
+import { describe, expect, it } from "vitest";
+
+describe("getPqpRates", () => {
+  const mockCoeData: COE[] = [
+    {
+      month: "2025-01",
+      bidding_no: 2,
+      vehicle_class: "Category A",
+      quota: 1069,
+      bids_success: 1058,
+      bids_received: 1484,
+      premium: 93601,
+    },
+    {
+      month: "2025-01",
+      bidding_no: 2,
+      vehicle_class: "Category B",
+      quota: 686,
+      bids_success: 686,
+      bids_received: 1071,
+      premium: 116625,
+    },
+    {
+      month: "2025-01",
+      bidding_no: 2,
+      vehicle_class: "Category C",
+      quota: 234,
+      bids_success: 233,
+      bids_received: 373,
+      premium: 65476,
+    },
+    {
+      month: "2025-01",
+      bidding_no: 2,
+      vehicle_class: "Category D",
+      quota: 536,
+      bids_success: 530,
+      bids_received: 651,
+      premium: 7721,
+    },
+    {
+      month: "2025-01",
+      bidding_no: 1,
+      vehicle_class: "Category A",
+      quota: 1034,
+      bids_success: 1034,
+      bids_received: 1381,
+      premium: 93699,
+    },
+    {
+      month: "2025-01",
+      bidding_no: 1,
+      vehicle_class: "Category B",
+      quota: 677,
+      bids_success: 674,
+      bids_received: 1266,
+      premium: 121501,
+    },
+    {
+      month: "2025-01",
+      bidding_no: 1,
+      vehicle_class: "Category C",
+      quota: 248,
+      bids_success: 246,
+      bids_received: 364,
+      premium: 67891,
+    },
+    {
+      month: "2025-01",
+      bidding_no: 1,
+      vehicle_class: "Category D",
+      quota: 520,
+      bids_success: 513,
+      bids_received: 595,
+      premium: 9001,
+    },
+    {
+      month: "2024-12",
+      bidding_no: 2,
+      vehicle_class: "Category A",
+      quota: 1035,
+      bids_success: 998,
+      bids_received: 1506,
+      premium: 96000,
+    },
+    {
+      month: "2024-12",
+      bidding_no: 2,
+      vehicle_class: "Category B",
+      quota: 676,
+      bids_success: 667,
+      bids_received: 987,
+      premium: 109000,
+    },
+    {
+      month: "2024-12",
+      bidding_no: 2,
+      vehicle_class: "Category C",
+      quota: 255,
+      bids_success: 255,
+      bids_received: 400,
+      premium: 69890,
+    },
+    {
+      month: "2024-12",
+      bidding_no: 2,
+      vehicle_class: "Category D",
+      quota: 519,
+      bids_success: 504,
+      bids_received: 641,
+      premium: 8381,
+    },
+    {
+      month: "2024-12",
+      bidding_no: 1,
+      vehicle_class: "Category A",
+      quota: 1037,
+      bids_success: 1034,
+      bids_received: 1475,
+      premium: 94000,
+    },
+    {
+      month: "2024-12",
+      bidding_no: 1,
+      vehicle_class: "Category B",
+      quota: 689,
+      bids_success: 689,
+      bids_received: 866,
+      premium: 103010,
+    },
+    {
+      month: "2024-12",
+      bidding_no: 1,
+      vehicle_class: "Category C",
+      quota: 262,
+      bids_success: 249,
+      bids_received: 418,
+      premium: 70289,
+    },
+    {
+      month: "2024-12",
+      bidding_no: 1,
+      vehicle_class: "Category D",
+      quota: 517,
+      bids_success: 516,
+      bids_received: 570,
+      premium: 7878,
+    },
+    {
+      month: "2024-11",
+      bidding_no: 2,
+      vehicle_class: "Category A",
+      quota: 1041,
+      bids_success: 1038,
+      bids_received: 1320,
+      premium: 89889,
+    },
+    {
+      month: "2024-11",
+      bidding_no: 2,
+      vehicle_class: "Category B",
+      quota: 678,
+      bids_success: 678,
+      bids_received: 874,
+      premium: 105081,
+    },
+    {
+      month: "2024-11",
+      bidding_no: 2,
+      vehicle_class: "Category C",
+      quota: 235,
+      bids_success: 214,
+      bids_received: 378,
+      premium: 69000,
+    },
+    {
+      month: "2024-11",
+      bidding_no: 2,
+      vehicle_class: "Category D",
+      quota: 524,
+      bids_success: 524,
+      bids_received: 637,
+      premium: 8669,
+    },
+    {
+      month: "2024-11",
+      bidding_no: 1,
+      vehicle_class: "Category A",
+      quota: 1040,
+      bids_success: 1035,
+      bids_received: 1338,
+      premium: 99889,
+    },
+    {
+      month: "2024-11",
+      bidding_no: 1,
+      vehicle_class: "Category B",
+      quota: 696,
+      bids_success: 683,
+      bids_received: 1039,
+      premium: 108001,
+    },
+    {
+      month: "2024-11",
+      bidding_no: 1,
+      vehicle_class: "Category C",
+      quota: 236,
+      bids_success: 209,
+      bids_received: 365,
+      premium: 68340,
+    },
+    {
+      month: "2024-11",
+      bidding_no: 1,
+      vehicle_class: "Category D",
+      quota: 520,
+      bids_success: 520,
+      bids_received: 598,
+      premium: 9089,
+    },
+    {
+      month: "2024-10",
+      bidding_no: 2,
+      vehicle_class: "Category A",
+      quota: 1058,
+      bids_success: 1048,
+      bids_received: 1499,
+      premium: 102900,
+    },
+    {
+      month: "2024-10",
+      bidding_no: 2,
+      vehicle_class: "Category B",
+      quota: 670,
+      bids_success: 669,
+      bids_received: 975,
+      premium: 113890,
+    },
+    {
+      month: "2024-10",
+      bidding_no: 2,
+      vehicle_class: "Category C",
+      quota: 222,
+      bids_success: 222,
+      bids_received: 337,
+      premium: 72939,
+    },
+    {
+      month: "2024-10",
+      bidding_no: 2,
+      vehicle_class: "Category D",
+      quota: 522,
+      bids_success: 515,
+      bids_received: 626,
+      premium: 9589,
+    },
+    {
+      month: "2024-10",
+      bidding_no: 1,
+      vehicle_class: "Category A",
+      quota: 994,
+      bids_success: 986,
+      bids_received: 1604,
+      premium: 103799,
+    },
+    {
+      month: "2024-10",
+      bidding_no: 1,
+      vehicle_class: "Category B",
+      quota: 671,
+      bids_success: 652,
+      bids_received: 1084,
+      premium: 116002,
+    },
+    {
+      month: "2024-10",
+      bidding_no: 1,
+      vehicle_class: "Category C",
+      quota: 218,
+      bids_success: 216,
+      bids_received: 321,
+      premium: 75009,
+    },
+    {
+      month: "2024-10",
+      bidding_no: 1,
+      vehicle_class: "Category D",
+      quota: 520,
+      bids_success: 519,
+      bids_received: 604,
+      premium: 10001,
+    },
+  ];
+
+  it("should correctly calculate PQP rates for all vehicle categories", () => {
+    expect(getPqpRates(mockCoeData)).toEqual({
+      "2025-02": {
+        "Category A": 94513,
+        "Category B": 110537,
+        "Category C": 68481,
+        "Category D": 8457,
+      },
+      "2025-01": {
+        "Category A": 97747,
+        "Category B": 109164,
+        "Category C": 70912,
+        "Category D": 8935,
+      },
+    });
+  });
+
+  it("should handle empty input array", () => {
+    const result = getPqpRates([]);
+    expect(result).toEqual({});
+  });
+
+  it("should handle single category data", () => {
+    const singleCategoryData = mockCoeData.filter(
+      ({ vehicle_class }) => vehicle_class === VehicleClass.CategoryA,
+    );
+    const result = getPqpRates(singleCategoryData);
+    expect(result).toEqual({
+      "2025-02": { "Category A": 94513 },
+      "2025-01": { "Category A": 97747 },
+    });
+  });
+});
diff --git a/src/lib/getPqpRates.ts b/src/lib/getPqpRates.ts
new file mode 100644
index 0000000..7def2b1
--- /dev/null
+++ b/src/lib/getPqpRates.ts
@@ -0,0 +1,67 @@
+import type { COE, VehicleClass } from "@/types";
+
+interface PQPResult {
+  month: string;
+  vehicle_class: string;
+  pqp: number;
+}
+
+type COEByCategory = Record<VehicleClass, COE[]>;
+
+const getPqpRates = (data: COE[]): Record<string, Record<string, number>> => {
+  const groupedByCategory: COEByCategory = data.reduce((acc, coe) => {
+    if (!acc[coe.vehicle_class]) {
+      acc[coe.vehicle_class] = [];
+    }
+    acc[coe.vehicle_class].push(coe);
+    return acc;
+  }, {} as COEByCategory);
+
+  const calculateMonthDifference = (currentMonth: string, bidMonth: string) => {
+    const [currentYear, currentMonthNum] = currentMonth.split("-").map(Number);
+    const [bidYear, bidMonthNum] = bidMonth.split("-").map(Number);
+    return (currentYear - bidYear) * 12 + (currentMonthNum - bidMonthNum);
+  };
+
+  const calculatePqp = (coe: COE[]) =>
+    Math.ceil(coe.reduce((sum, { premium }) => sum + premium, 0) / coe.length);
+
+  const pqpResults: PQPResult[] = Object.entries(groupedByCategory).flatMap(
+    ([vehicle_class, biddings]) => {
+      const uniqueMonths = [...new Set(biddings.map(({ month }) => month))];
+
+      return uniqueMonths
+        .map((month) => {
+          const relevantBids = biddings
+            .filter((bid) => {
+              const monthsDiff = calculateMonthDifference(month, bid.month);
+              return monthsDiff >= 0 && monthsDiff <= 2;
+            })
+            .slice(0, 6);
+
+          if (relevantBids.length !== 6) {
+            return null;
+          }
+
+          const pqp = calculatePqp(relevantBids);
+
+          return { month, vehicle_class, pqp };
+        })
+        .filter((result) => !!result);
+    },
+  );
+
+  return pqpResults.reduce((acc, { month, vehicle_class, pqp }) => {
+    const nextMonth = new Date(month);
+    nextMonth.setMonth(nextMonth.getMonth() + 1);
+    const nextMonthKey = nextMonth.toISOString().slice(0, 7);
+
+    if (!acc[nextMonthKey]) {
+      acc[nextMonthKey] = {};
+    }
+    acc[nextMonthKey][vehicle_class] = pqp;
+    return acc;
+  }, {});
+};
+
+export default getPqpRates;
diff --git a/src/types/index.ts b/src/types/index.ts
index 3b4d065..982681a 100644
--- a/src/types/index.ts
+++ b/src/types/index.ts
@@ -17,6 +17,14 @@ export enum OrderBy {
   DESC = "desc",
 }
 
+export enum VehicleClass {
+  CategoryA = "Category A",
+  CategoryB = "Category B",
+  CategoryC = "Category C",
+  CategoryD = "Category D",
+  CategoryE = "Category E",
+}
+
 // Base types
 export type Stage = "dev" | "staging" | "prod";
 export type Make = Car["make"];
@@ -32,12 +40,12 @@ export interface Car {
 
 export interface COE {
   month: string;
-  bidding_no: string;
+  bidding_no: number;
   vehicle_class: string;
-  quota: string;
-  bids_success: string;
-  bids_received: string;
-  premium: string;
+  quota: number;
+  bids_success: number;
+  bids_received: number;
+  premium: number;
 }
 
 export interface UpdateParams {
diff --git a/src/v1/routes/coe.ts b/src/v1/routes/coe.ts
index 2fbaaf6..f5b5f81 100644
--- a/src/v1/routes/coe.ts
+++ b/src/v1/routes/coe.ts
@@ -2,12 +2,14 @@ import { CACHE_TTL } from "@/config";
 import db from "@/config/db";
 import redis from "@/config/redis";
 import { getLatestMonth } from "@/lib/getLatestMonth";
+import getPqpRates from "@/lib/getPqpRates";
 import { getUniqueMonths } from "@/lib/getUniqueMonths";
 import { groupMonthsByYear } from "@/lib/groupMonthsByYear";
-import { coe } from "@sgcarstrends/schema";
 import { type COE, COEQuerySchema, MonthsQuerySchema } from "@/schemas";
+import { VehicleClass } from "@/types";
 import { zValidator } from "@hono/zod-validator";
-import { and, asc, desc, eq, gte, lte } from "drizzle-orm";
+import { coe } from "@sgcarstrends/schema";
+import { and, asc, desc, eq, gte, lte, ne } from "drizzle-orm";
 import { Hono } from "hono";
 
 const app = new Hono();
@@ -71,4 +73,25 @@ app.get("/latest", async (c) => {
   return c.json(results);
 });
 
+app.get("/pqp", async (c) => {
+  const CACHE_KEY = "coe:pqp";
+
+  const cachedData = await redis.get(CACHE_KEY);
+  if (cachedData) {
+    return c.json(cachedData);
+  }
+
+  const results = await db
+    .select()
+    .from(coe)
+    .where(ne(coe.vehicle_class, VehicleClass.CategoryE)) // Category E COEs are not included in PQP calculation
+    .orderBy(desc(coe.month), desc(coe.bidding_no), asc(coe.vehicle_class));
+
+  const pqpRates = getPqpRates(results);
+
+  await redis.set(CACHE_KEY, pqpRates, { ex: CACHE_TTL });
+
+  return c.json(pqpRates);
+});
+
 export default app;