Because registrars have huge lock-in effects. It is extremely tedious to transfer domains between registrars. There are periods around the renewal date where y

Because registrars have huge lock-in effects. It is extremely tedious to transfer domains between registrars. There are periods around the renewal date where you cannot do this at all, and it might involve paperwork and phonecalls. The old registrar can stall and make it more difficult on purpose. And if you are renewing a domain, it has some value for you. Registering a new domain might be an impulse purchase, but if you want to keep it after a year, you most likely have a site worth more than $xx/year running there. This domain might go offline for months or even be lost if the transfer is messed up. Altogether, the old registrar can make it difficult to transfer domains out, and could cause you to lose the domain. Paying $xx/year is the easy way out, and they know it.