Did you know that when you deregister and/or scrap your vehicle, you will get some money back for removing it from our roads?
Called Certificate of Entitlement (COE) and Preferential Additional Registration Fee (PARF) rebates, it is a sum of money the Land Transport Authority (LTA) will give to you when you deregister and/or scrap your car.
The amount you get from these two rebates will match your car's scrap value, the amount of money you are estimated to get for scrapping your car. While your car’s scrap value may seem like a mystery to you, did you know you can actually calculate your car's scrap value by yourself? But first, we have to first examine how each rebate works.
(Photo Credit: Pexels)
Should you decide to deregister your car before its COE expires, you might be given a rebate for the time left on the car’s COE. The amount will be based on the Quota Premium (QP) or Prevailing Quota Premium (PQP) you last paid. To put it simply, LTA would be refunding you for the duration of your COE that you won’t be using.
How you calculate your COE rebate:
COE rebate = (QP paid x unused period of COE left) / 120 months (10-years of COE)
So, for example, let’s say you paid a QP of S$30,000 seven years and three months ago, and you have decided to scrap it now. Your unused period of COE left is 33 months. Therefore, your COE rebate is calculated as follows:
COE rebate = (30,000 x 33) / 120
In this example, your COE rebate would be S$8,250.
If you choose to wait until your COE fully expires to scrap your car, you won’t be eligible for any COE rebate as there won’t be any time left on your car’s COE. Do also note that if you decide to deregister your car within two years of its registration, you would only be eligible for a maximum rebate of 80% of the QP or PQP paid.
(Photo Credit: Straits Times)
Should you choose to deregister your car, which is less than 10-years-old, you will be eligible for a PARF rebate. This rebate is meant for you to recoup the Additional Registration Fee (ARF) you paid when registering your car.
The table below should be able to tell you how much you can get in PARF rebate, based on the age of your car at deregistration.
Less than 5 Years
75% of ARF
5 to 6 Years
70% of ARF
6 to 7 Years
65% of ARF
7 to 8 Years
60% of ARF
8 to 9 Years
55% of ARF
9 to 10 Years
50% of ARF
More than 10 Years
For example, if your car has an ARF of S$20,000 and you decide to deregister when it is eight years and four months old, your PARF rebate would be S$11,000 ($20,000 x 55%).
Do note that your ARF is directly tied to the Open Market Value of your car. Thus, the more you paid for your car, the higher your ARF and PARF rebate will be. But this is all dependent on your car being less than 10-years-old. If your car is over 10-years-old, you will no longer be eligible for the PARF rebate.
Therefore, when you deregister your car, you can receive both a COE and PARF rebate as long as your car is less than 10-years-old. If you have renewed the COE of your car, you will only be eligible for a COE rebate. Finally, if your car is more than 10-years-old with a fully expired COE, you won’t be eligible for either.
Even with all the useful information we gave you, we totally understand if you are still not sure if you should renew your COE and forfeit your rebates.
Here at Motorist, we offer completely free COE renewal advice so that you can make an informed choice on whether it is more worth it to renew your car’s COE or to scrap it. Should you choose the former, we will guide you through the entire renewal process. We will also settle all your paperwork and source for the cheapest bank loans for you.
Schedule a free COE renewal consultation session!
Read more: COE Renewal: Bank vs In-House Loan
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