PARF cars are vehicles still inside their original 10-year COE that have never had that COE renewed, which means they still hold a Preferential Additional Registration Fee rebate you get back when you scrap them. A COE car has crossed the 10-year mark, had its COE renewed, and forfeited that ARF rebate for good. That single difference decides how much of your money survives the day you let the car go. Budget 2026 then changed the maths again, cutting the PARF rebate hard for cars registered from 13 February 2026, so the old rule of thumb that PARF cars always win no longer holds the way it used to.
Every car registered in Singapore starts life with a 10-year Certificate of Entitlement and an Additional Registration Fee paid to LTA. A car stays a PARF car while two things remain true: it is 10 years old or younger, and its original COE has never been renewed. The moment either fails, it becomes a COE car.
When you deregister a PARF car you receive a PARF rebate worked out as a percentage of the ARF you paid. A COE car gets no PARF rebate at all. It can still earn a COE rebate on any unused months of a renewed certificate, but the ARF portion is gone the instant the original COE is renewed or expires.
This is why a 9-year-old PARF car and an 11-year-old COE car of the same model are priced and valued so differently. Buyers are not only paying for the metal. They are paying for the rebate sitting inside the car.
To see why PARF cars hold value, you need to know what the rebate is a slice of. When a car is imported, Singapore Customs assesses its Open Market Value, the landed cost covering purchase price, freight and insurance. ARF is then charged as a progressive percentage of that OMV, and the PARF rebate later refunds part of that ARF.
ARF runs on a five-tier scale that has been in place since the February 2023 revision. The more expensive the car, the steeper the top tiers, which is why luxury models carry an outsized rebate while a mass-market hatchback carries a modest one.
| OMV band | ARF rate on that band |
|---|---|
| First $20,000 | 100% |
| $20,001 to $40,000 | 140% |
| $40,001 to $60,000 | 190% |
| $60,001 to $80,000 | 250% |
| Above $80,000 | 320% |
For decades the PARF rebate was generous: a car scrapped at five years or younger returned 75% of its ARF, and even a near-10-year car returned 50%, with no cap. Budget 2026 cut that sharply. From the first bidding exercise on 20 February 2026, cars registered on or after 13 February 2026 fall on a new, lower schedule, and the rebate cap was halved from $60,000 to $30,000.
The cut matters most for newer PARF cars. A car deregistered in its first five years now returns 30% of ARF instead of 75%, and one scrapped between nine and ten years returns just 5% instead of 50%. Cars registered before 13 February 2026 keep the old schedule untouched, so for the next several years the second-hand market will hold two classes of PARF cars side by side.
| Age at deregistration | Registered before 13 Feb 2026 | Registered 13 Feb 2026 onward |
|---|---|---|
| 5 years or younger | 75% | 30% (cap $30,000) |
| Over 5 to 6 years | 70% | 25% (cap $30,000) |
| Over 6 to 7 years | 65% | 20% (cap $30,000) |
| Over 7 to 8 years | 60% | 15% (cap $30,000) |
| Over 8 to 9 years | 55% | 10% (cap $30,000) |
| Over 9 to 10 years | 50% | 5% (cap $30,000) |
| Over 10 years | Nil | Nil |
Depreciation is the figure that actually leaves your bank account. It is roughly the total cost of owning the car minus everything you get back at the end, spread across the years you keep it. A smaller rebate at the end means a bigger annual loss.
Take a mass-market sedan with an ARF paid of around $26,000 (figures illustrative, based on a 2026 Toyota Altis-class example reported by industry analysts). Under the old schedule a 9-to-10-year scrap returned roughly $13,000 in PARF rebate. Under the new schedule that drops to around $1,300. On a 10-year hold, annual depreciation rises from about $17,600 to roughly $18,800, an extra $1,200 a year purely from the rebate change.
The effect scales with ARF. A car with $50,000 of ARF loses far more in absolute terms, because both the old 50% rebate and the new $30,000 cap bite harder. Run your own model and total cost through the car cost calculator before you commit to either a PARF or a COE car.
There is no single winner. A PARF car costs more upfront but hands you a rebate at the end, so your downside is partly protected. A COE car is cheaper to buy and you skip a fresh, six-figure COE, but you own a car with no ARF rebate and rising maintenance bills as it ages.
The honest comparison is total cost over the years you plan to keep it, divided by those years. For short holds on an expensive car, the PARF rebate cushions you. For someone who wants a runabout for three or four years and does not mind an older car, a COE car can be the cheaper monthly answer, especially now that the PARF rebate on new cars is so much smaller.
| Factor | PARF car | COE car |
|---|---|---|
| Age | 10 years or younger, COE never renewed | COE renewed or past 10 years |
| Upfront price | Higher | Lower |
| PARF (ARF) rebate at scrap | Yes, per LTA schedule | None |
| COE rebate | On unused original COE | On unused renewed COE only |
| Best for | Longer holds, value protection | Short holds, lowest monthly cost |
| Maintenance risk | Lower (newer) | Higher (older) |
At the 10-year mark you choose: scrap the car and claim the PARF rebate, or renew the COE and keep driving. Renewing means paying the Prevailing Quota Premium, a moving three-month average of COE prices. Once you renew, the PARF rebate is forfeited permanently and the car becomes a COE car.
With Category A COE at $123,847 and Category B at $123,502 in the second June 2026 bidding exercise, renewing a 10-year COE is a serious outlay. A five-year renewal costs half the PQP but leaves no COE rebate at the end, while a 10-year renewal costs the full PQP and does earn a pro-rated COE rebate if you scrap early.
If the rebate maths is what drew you in, our breakdown of the scrap car COE and PARF rebate shows exactly what you get back and how to time deregistration around the age bands.
A car is rarely a standalone decision. The deposit, loan, road tax, insurance and depreciation all compete with your savings goals. Before stretching for a pricier PARF car, sanity-check the monthly hit against the rest of your plan using the personal budget calculator.
The principle that makes PARF cars attractive is the same one behind any decision to part with cash today for a payout later: money has a time cost. The rebate you collect in year 10 is worth less at today's value than the same sum now, which is the opportunity cost you weigh whenever you tie up capital in a depreciating asset.
PARF stands for Preferential Additional Registration Fee. A PARF car is a Singapore-registered vehicle that is 10 years old or younger and whose original COE has never been renewed, so it still qualifies for a PARF rebate calculated as a percentage of the ARF paid when you deregister it.
Usually yes on resale, because a PARF car still carries an ARF rebate that a COE car has forfeited. The buyer is effectively paying for that future rebate. After the Budget 2026 cut, though, the rebate on newer cars is smaller, so the value gap between PARF cars and COE cars has narrowed compared with earlier years.
It depends on when the car was registered. Cars registered before 13 February 2026 use the old schedule, from 75% of ARF at five years down to 50% near 10 years with no cap. Cars registered from 13 February 2026 use the new schedule, from 30% down to 5%, capped at $30,000 per vehicle.
Compare total depreciation over how long you intend to keep the car, not the sticker price. A PARF car protects more of your money on longer holds and pricier models, while a COE car can be cheaper month to month for a short hold on an older vehicle, particularly now that the PARF rebate on new cars is much lower.
This is general financial information for Singapore, not personal financial advice. Figures change — verify current rates against the official sources above before acting. See our full disclaimer.