When your vehicle’s COE is about to expire, you face a fundamental choice: renew the COE and keep your vehicle, or scrap it and collect the PARF (Preferential Additional Registration Fee) rebate. Here’s a detailed financial analysis to help you decide.
Understanding the PARF Rebate
The PARF rebate is a refund of a portion of the Additional Registration Fee (ARF) you paid when you first registered your vehicle. The rebate amount depends on how old your vehicle is when deregistered:
- Deregistered at age 5 years: 75% of ARF paid
- Deregistered at age 6 years: 70% of ARF paid
- Deregistered at age 7 years: 65% of ARF paid
- Deregistered at age 8 years: 60% of ARF paid
- Deregistered at age 9 years: 55% of ARF paid
- Deregistered at age 10 years: 50% of ARF paid
Note: No PARF rebate is available for vehicles deregistered after 10 years (i.e., after COE renewal).
The Financial Comparison
Let’s compare for a typical Category B vehicle:
Option 1: Scrap and Buy New
- PARF rebate: ~S$20,000–S$40,000 (depending on original ARF)
- COE rebate: ~S$60,000 (proportional to remaining COE)
- Total proceeds: ~S$80,000–S$100,000
- Cost of new vehicle: S$180,000–S$250,000+
- Net cost: S$80,000–S$170,000+
Option 2: Renew COE (10 Years)
- COE renewal cost (Cat B PQP × 10): ~S$1,190,000
- No PARF rebate (vehicle continues in use)
- Ongoing maintenance costs
- Net cost: S$1,190,000 + maintenance
Factors Favouring COE Renewal
- Your vehicle is in excellent condition
- The cost of a replacement vehicle is much higher than renewal
- You’re attached to your current vehicle
- Your vehicle is a classic or has sentimental value
- You want to avoid the hassle of buying a new vehicle
Factors Favouring Scrapping
- Your vehicle has high mileage or significant mechanical issues
- Maintenance costs are escalating
- You want a newer vehicle with modern features
- The PARF rebate is significant
- You can afford the cost of a new vehicle
Our Assessment
For most vehicle owners, COE renewal is the more cost-effective option, especially if the vehicle is in good condition. The cost of buying a new vehicle (including the new COE) typically far exceeds the cost of renewal.
Use our COE Renewal Calculator to model the numbers for your specific situation, or contact our specialists for personalised advice.
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