Did you know that you can get money back when you deregister your car? It’s the Land Transport Authority’s (LTA) way of “thanking you” for decluttering their roads and reducing congestion.
To calculate your total deregistration value, you will need to calculate your Open Market Value (OMV) and Preferential Additional Registration Fee (PARF). Your deregistration value is the sum of your COE rebate and PARF rebate.
Our guide will help you to calculate the PARF rebate and COE rebate as well as determining its deregistration value (also known as paper value).
To first know how to calculate your rebates, you should understand a few important factors that will ultimately affect your car value.
Table of Contents
Before Calculating the PARF Rebate and COE Rebate
To calculate the exact PARF Rebate and COE Rebate for a vehicle, you must first consider several important factors.
Factors affecting the total cost of your vehicle
If you’re looking to get a better understanding of what contributes to the total cost of your car, it’s important to focus on several key components.
What is OMV (Open Market Value)?
The OMV or Open Market Value of a vehicle is the initial price of it when imported into Singapore. This cost includes the purchase fee, insurance, freight and delivery fees, but does not include taxes such as GST, registration fees and dealer profit margins.
The OMV effectively gives you a baseline for how much your car should cost without any add-ons like taxes or dealer mark-ups.
What is Registration Fee (RF)
When registering a new car in Singapore, you will be required to pay a Registration Fee (RF). This is a flat fee tax of S$350, which is non-negotiable and must be paid upfront (accurate as of the time of writing, but may be subject to change in the future).
What is ARF (Additional Registration Fees)?
ARF stands for Additional Registration Fees and it is a tax that accompanies the registration of your vehicle. The ARF is calculated based on the OMV (Open Market Value) of your car and it will be used to calculate the PARF rebate upon deregistration.
Based on the latest ARF rates from 14 February 2023:
- For cars with an OMV of up to $20,000:
ARF = OMV
The ARF value is 100% of your OMV value. - For cars with an OMV ranging from $20,001 to $40,000:
ARF = [(OMV – $20,000) x 140%] + $20,000
The ARF value is 140% of incremental OMV. - For cars with an OMV from $40,001 to $60,000:
ARF = [(OMV – $40,000) x 190%] + $48,000
The ARF value is 190% of incremental OMV. - For cars with an OMV from $60,001 to $80,000:
ARF = [(OMV – $60,000) x 250%] + $86,000
The ARF value is 250% of incremental OMV. - For cars with an OMV above $80,001:
ARF = [(OMV – $80,000) x 320%] + $136,000
The ARF value is 320% of incremental OMV.
Here’s an example of a car with an OMV of $90,000 and its payable ARF would be:
| Vehicle OMV ($90,000) | ARF Rate | ARF Payable |
|---|---|---|
| First $20,000 | 100% | 100% x $20,000= $20,000 |
| Next $20,000 (i.e. $20,001 to $40,000) | 140% | 140% x $20,000= $28,000 |
| Next $20,000 (i.e. $40,001 to $60,000) | 180% | 190% x $20,000= $38,000 |
| Next $20,000 (i.e. $60,001 to $80,000) | 250% | 250% x $20,000= $50,000 |
| Above $80,000 | 320% | 320% x $10,000= $32,000 |
What is Certificate of Entitlement (COE)?
The COE, or Certificate of Entitlement is essentially a permission slip to own a car in Singapore for a period of 10 years. There are five categories under COE that are grouped according to the vehicle type and/or engine capacity.
In addition to the purchase cost, other expenses like GST (Goods and Services Tax), excise duty, and dealer markups can also affect the final cost.
Factors affecting the sale value of your vehicle
When it comes to determining the sale value of your vehicle, there are several factors to take into consideration.
How to know the deregistration value of your vehicle?
Your vehicle’s deregistration value is the sum of a COE rebate and a PARF rebate:
Deregistration value = [COE rebate + PARF rebate]
To make thing simpler, you can enquire the PARF/COE rebate for registered vehicle via the LTA OneMotoring’s website.
All you need to do is to input the following details:
- Vehicle No.
- Owner ID Type.
- Owner ID (last 4 characters).
- Intended Deregistration Date.
- Vehicle to be Exported. (Yes or No)
It’s important to take note that the PARF/COE Rebate amount(s) will vary according to the age of the vehicle at the intended date of deregistration. To calculate your scrap value of your vehicle, it will be the 50% of the actual PARF paid.
How do I calculate my COE rebate?
When deregistering your car before the Certificate of Entitlement (COE) expires in its 10th year, you are eligible for a rebate from LTA in the form of the remaining COE for your vehicle. This rebate amount is based on the Quota Premium (QP) that you paid previously.
Your COE rebate calculation is:
COE rebate = (Quota Premium Paid x Number of months left)/120 months
Take an example of a car which has a COE that costs $55,000. Let’s say this COE expires on 23 Feb 2026, and you choose to deregister it on 25 Feb 2023.
Your unused duration of COE is:
From 25 Feb 2023 to 23 Feb 2026 to = 2 years 11 months 29 days
= 35.9 months
And therefore, your COE Rebate amounts to = ($55,000 x 35.9) / 120 = $16,454.16
How do I calculate my PARF rebate?
When deregistering a car that is younger than 10 years, you are eligible for a PARF rebate. This rebate can be used to recover the ARF (Additional Registration Fee) you initially paid during the registration of your vehicle. Your PARF rebate value is contingent on your car’s age and ARF value.
The PARF rebate is based off a percentage of your ARF value, which is based on your vehicle’s OMV with the following calculation:
PARF rebate = ARF x % based on the age of your car
| Age of vehicle at deregistration | PARF rebate (For cars registered with a COE obtained from May 2002 to 8 February 2023) | PARF rebate (For cars registered with a COE obtained from 22 February 2023 onwards) |
|---|---|---|
| Not exceeding 5 years | 75% of ARF paid | 75% of ARF paid or $60,000 (whichever is lower) |
| Above 5 years but not exceeding 6 years | 70% of ARF paid | 70% of ARF paid or $60,000 (whichever is lower) |
| Above 6 years but not exceeding 7 years | 65% of ARF paid | 65% of ARF paid or $60,000 (whichever is lower) |
| Above 7 years but not exceeding 8 years | 60% of ARF paid | 60% of ARF paid or $60,000 (whichever is lower) |
| Above 8 years but not exceeding 9 years | 55% of ARF paid | 55% of ARF paid or $60,000 (whichever is lower) |
| Above 9 years but not exceeding 10 years | 50% of ARF paid | 50% of ARF paid or $60,000 (whichever is lower) |
| Above 10 years | Nil | Nil |
*Recently announced at the Budget 2023, all cars registered with a COE obtained from 22 February onward will have their PARF rebates capped at $60,000.
How does VES rebate affects PARF rebate?
The Vehicle Emissions Scheme (VES) can impact the PARF rebate of a car depending on the amount of rebate or surcharge applied.
When deregistering your car, if you have benefited from an emissions rebate, the PARF rebate will be calculated based on the net amount of Additional Registration Fee you paid after taking into account the emission rebates.
If, however, you have paid an emission surcharge when buying your vehicle, the PARF rebate that is due to you will be calculated based on the ARF paid which excludes this surcharge.
No matter what, the minimum ARF payable is $5,000.
For example, if your ARF was $15,000 and you received a VES rebate of $25,000, then you would be subjected to a minimum ARF of $5,000. In turn, when it comes time to scrap your car in 10 years time, the PARF rebate will be 50% x $5,000 = $2,500.
If your car has an ARF of $40,000 and you received a VES rebate of $25,000, then upon deregistering your vehicle after 10 years, you will be eligible for a PARF rebate of 50% x ($40,000 – $25,000) = $7,500.
For example, if your ARF cost is $20,000 and your VES surcharge is $15,000, you will receive a PARF rebate of $10,000 (50% x $20,000) after 10 years. The VES surcharge will increase your car price by at least $15,000, keeping in mind that the additional $15,000 will be factored into the depreciation value of your car.
What is the scrap value?
Scrap value is the amount that you can get for your car if you decide to scrap it. It is the sum of two values: the deregistration value, which is the amount that is paid out by the Land Transport Authority (LTA); and the body value, which is what a dealer would be willing to pay you for taking the car off your hands.
Scrap value = [Deregistration value + Body value]
What is the paper value?
Paper value, also known as deregistration value, is the monetary value of your car. When someone asks about it, they are simply inquiring about its current worth for sale or resale.
Calculate deregistration value of a car (real example)
Let’s take for example a $90,000 OMV car that is deregistered on 25 Feb 2023, with two years left.
Based on the calculation above, you would have paid a total of $168,000 in ARF.
Based off the PARF rebate table above, your PARF rebate would be 70% of ARF, which is $117,600
Your COE has 2 years 11 months 29 days remaining. As your COE cost $55,000, the COE rebate will be $16,454.16
The deregistration value of your car is calculated by adding the PARF rebate and the COE rebate together. In this example, the sum would be $117,600 + $16,454.16 = $134,054.16
If a car’s COE was obtained after 22nd February 2023, the Paid-up Additional Registration Fee (PARF) rebate would be capped at $60,000.
So, if we keep all other factors, with the registration and deregistration date in the example above constant, your car’s deregistration value will only be $60,000 + $16,454.16 = $76,454.16.
How to calculate car depreciation?
Simply put, car depreciation is the loss of value that occurs over time as you own and use a vehicle. The most common way to calculate it is by determining the annual depreciation rate.
To do this, you’ll need to find the sales price of your vehicle and its expected deregistration value at the end of its 10-year COE lifespan.
From there, you can calculate the annual depreciation rate using this formula:
Annual Depreciation = (Sales Price – Deregistration Value) / Remaining years of COE
Keep in mind that this calculation does not take into account any changes in car body value over time.
Do expensive car have higher depreciation?
Many people assume that expensive cars automatically mean high depreciation values, but this is not always the case.
While higher sales prices can often lead to higher depreciation rates, other factors such as car model, brand reputation, and demand for the specific car can also play significant roles.
It’s important to consider all of these factors when evaluating a potential car purchase or resale value.
In general, however, the annual depreciation value can be calculated by using the above mentioned formula.
In the case of two cars that cost differently but have similar depreciation values, the more expensive car may be the wiser investment.
For instance, Car A costs $190,000 with a scrap value/PARF value rebate of $20,000 after ten years, will have an annual depreciation of $17,000.
Meanwhile, Car B costs $183,000 with a scrap value/PARF value rebate of $11,000 after ten years will have an annual depreciation of $17,200.
Although Car A is more costly upfront, factors like its higher OMV result in a higher ARF and scrap value/PARF rebate relative to Car B’s lower initial price tag.
Of course it’s important to keep in mind that if you extend your COE beyond ten years for Car A specifically, you would lose out on the PARF value rebate and this would increase the overall depreciation value for that vehicle over time.
New car depreciation vs Used car depreciation
When it comes to buying and selling cars, understanding depreciation value is crucial. Typically, a brand new car will experience higher depreciation within the first few years of being purchased.
This means that selling the car in the secondhand market for a higher price may be a smarter financial decision than deregistering it after five years.
On the other hand, when purchasing a used car, you can generally expect lower depreciation rates However, this ultimately depends on how much you pay for the vehicle. Many car owners opt to avoid high initial depreciation by purchasing used cars instead of new ones.
Difference between PARF cars and COE cars
Those cars that were still within the first 10 years of their COE is eligible for a PARF rebate. Such vehicles are referred to as “PARF Cars”.
However, if the COE is renewed then the respective car won’t be able to claim such a rebate and becomes known as “COE Car”.
Should you buy a PARF car or COE car?
Should you buy a COE car or PARF car? There are pros and cons to each option. On the one hand, a COE car can be significantly cheaper than a PARF car, but you won’t get any of the de-registration rebates.
On the other hand, if you get a PARF car, it will be more expensive up front but you’ll receive your COE and PARF rebates when you deregister it. Ultimately, it depends on what type of price point and features you are looking for in a used car.
Buying a PARF or COE car requires you to analyse three important factors.
- Mileage of the car: A vehicle with a high amount of running-killometers will experience reduced performance as parts need to be replaced more often.
- Maintenance history: Make sure to ask for a maintenance log and have it inspected by a reliable mechanic before you make any decisions. Properly maintained cars are much less likely to break down or require expensive repairs later on, so taking the time to check its maintenance record can save you money in the long run!
- Exterior and internal condition: Exteriorly you should check for dents, scratches, lights, power windows and tyres to ensure that they are in good condition. If there are any blemishes, you may be able to negotiate some sort of discount but if the lights or tyres of the car have seen better days, then it is advisable to ask for replacements.
PARF car vs COE cars
| Type of car | Advantages | Disadvantages |
|---|---|---|
| PARF CAR | – Qualify for both PARF and COE rebates if they are de-registered within 10 years – The warranty may still be active on the car – Lower chance of encountering maintenance issues – The mileage is also typically lower – Higher resale value if you decide to sell the car after 2-3 years | – Significantly more expensive than COE car – Higher down payment – Higher monthly repayments |
| COE CAR | – Much more cheaper than PARF car – Lower monthly repayments – Lower down payment – Eligible for COE rebates if the car is deregistered before COE expires | – Lesser fuel efficient – Lesser car insurer options and higher insurance premiums – Higher road tax (10% increase each year cap at 150% until the end of your COE term) – Higher car loan interest rates – Low resale value – Higher mileage – Expired warranty – High risk for repair due to wear and tear – Outdated technology |
We hope with this article, you will find out how much money you can get back when you decide to deregister your car as well as the calculation for your car depreciation and rebates.
Finding out all these value of your vehicle is actually quite easy and it’s definitely worth knowing.
But if you want to find out the current value of your car, you can also request for a 100% non-obligation free valuation at Carsnap within 24 hours!
PARF Rebate and COE Rebate Calculation Simple Guide
This guide provides detailed steps on how to calculate the PARF (Preferential Additional Registration Fee) and COE (Certificate of Entitlement) rebates when you’re looking to deregister a vehicle in Singapore.
10 Minutes
Understand what PARF and COE Rebates are:
The PARF rebate is offered to car owners who deregister their vehicle before its 10th year of age, while the COE rebate pertains to what’s left of the COE value upon deregistration.
Gather necessary vehicle details:
Compile key information such as your car’s Open Market Value (OMV), the age of the car, and the COE category under which it was registered.
Calculate PARF Rebate:
The PARF rebate can be calculated as a percentage of your car’s OMV, depending on its age at the time of deregistration. The newer the car, the higher the PARF rebate.
Calculate COE Rebate:
If you deregister your car before the COE expires, the COE rebate will be the residual value of the COE. This is prorated, meaning you get back the value of the remaining months on the COE.
Consult the Land Transport Authority (LTA):
For the most accurate information, visit the LTA’s official website for a precise calculation of your PARF and COE rebates.
What is a PARF/COE rebate?
PARF or Preferential Additional Registration Fee and COE or Certificate of Entitlement rebates are incentives used to offset the cost of registering a car in Singapore. These rebates can be used to cover the Registration Fee, Additional Registration Fee, Quota Premium, Used Car Surcharge and CEVS Surcharge costs.
What is COE rebate amount?
To determine your COE rebate, you’ll need to do a simple calculation: multiply the Quota Premium (QP) paid by the unused period of COE left, then divide that figure by 120 months (the duration of a standard 10-year COE). For example, if you paid S$40,000 for your COE five and a half years ago, and have now decided to scrap it with 57 months left on the COE, your rebate would be 40,000 x 57 / 120 = S$21,000.
How do you calculate PARF value?
To calculate the PARF rebate, you need to take a look at your car’s ARF value. ARF stands for Additional Registration Fee and it is based on the Open Market Value (OMV) of the vehicle. The PARF rebate is then calculated as a percentage of this ARF value, and the percentage differs based on the age of your vehicle.
What is a COE car?
In Singapore, a COE car refers to a vehicle that is eligible for a Certificate of Entitlement (COE) rebate if it has been in use for over 10 years. This rebate system is meant to incentivise car owners to continue using their older vehicles, rather than constantly upgrading to newer models.
What is a PARF car?
Simply put, a PARF car is a vehicle that is eligible for a Preferential Additional Registration Fee (PARF) rebate when it’s deregistered within the first 10 years of their COE. This rebate is calculated based on a percentage of the car’s Open Market Value (OMV), in addition to any Certificate of Entitlement (COE) rebate that may be available.
