Wondering how to calculate the total scrap value of your vehicle?

Our Scrap Car Experts explain.

 

With the precedence of rising Certificate of Entitlement (COE), with Category A being at $68,501 and Category B and Category E COE both closing near the $100,000 mark. You might be considering renewing your vehicle’s COE or deregistering it, and instead purchase a new vehicle. Today, our experts at Scrap Car will teach you how to calculate the value of your car when you deregister and provide insights on whether you should or should not scrap your vehicle!

 

What is PARF rebate and COE rebate?

To understand scrap value, we will first discuss on COE rebate. When you deregister your vehicle, it is the remaining duration of COE available that is eligible for the rebate. Counted in full calendar months with the remaining days calculated counting 30 days as one full month. For simplification, if you are deregistering your vehicle at the 5-year mark, you are eligible for 60 months of unused COE. Which is exactly half of the 120 months. You will be rebated half of the COE you originally paid.

Secondly, we have the Preferential Additional Registration Fee (PARF) rebate, which when eligible, will be rebated when deregistering your vehicle. It is based on the Additional Registration Fee (ARF) incurred when your vehicle is first registered in Singapore. In layman’s terms, ARF is a percentage based on the car’s Open Market Value (OMV). OMV is simply the total price paid when a vehicle is imported into Singapore.

(Do note that PARF rebate is after any ARF subsidy when registering a car that has a lower carbon emission or an electric vehicle.)

 

ARF Banding and Rates
First $20,000 of OMV	100% of OMV
Next $30,000 of OMV (ie $20,001 to $50,000)	140% of OMV
Next $30,000 of OMV (ie $50,001 to $80,000)	180% of OMV
Remaining above $80,000 of OMV	220% of OMV

 

Vehicle Age at Deregistration	PARF Rebate
Not more than 5 years	75% of ARF Paid
Above 5 but not more than 6 years	70% of ARF Paid
Above 6 but not more than 7 years	65% of ARF Paid
Above 7 but not more than 8 years	60% of ARF Paid
Above 8 but not more than 9 years	55% of ARF Paid
Above 9 but not more than 10 years	50% of ARF Paid
More than 10 years	0% (NIL)

 

Should you scrap your car?

(Based on vehicles registered 10 years or less only)

As discussed, the COE rebate only rebates you the unused portion of the COE based on the price that you have paid. If you are unsure how much PARF and COE rebate you can get you can from your vehicle, you can use the official LTA OneMotoring website to calculate your available PARF and COE rebate. In addition to that, do remember that when scraping your vehicle, you would get a sum for the vehicle’s body value. For your vehicle’s body value, you can contact Scrap Car and we will provide a quotation as soon as possible.

Screencapture of LTA OneMotoring enquiry webpage

Based on the current COE trend where COE prices are sky-high, chances are, if your vehicle is not anywhere close to the 10-year old mark, we suggest that you sell your vehicle instead if are deciding whether to sell or to scrap so as to make full use of the appreciation of COE. And yes, you heard it from us, a car scrapping company suggesting to you to not scrap your vehicle. You can also consider waiting until your vehicle reaches the 10-year mark before scrapping it; the reasons why you should scrap will be explored further below.

 

When it makes financial sense to scrap your car

If your car is however reaching its 10-year mark old, you might want to consider scraping it with us as you may find that buying a new car might be a better choice than renewing your COE.

How so? Since you are already paying so much for renewing COE (in March 2022, this would be $60,000 or $83,500 depending on COE Category), you might consider paying a marginal amount more for a new car after accounting for the PARF rebate and car body value if you do scrap your vehicle. You can use this sum of money to offset your next car purchase, which would have otherwise been forfeited if you were to renew your vehicle’s COE. Do take note: there is no COE rebate as we assumed the vehicle is to be scrapped on the last day with no remaining COE rebate available.

In addition to that, if you choose to keep your car, as it ages past 10 years old, you will eventually have to pay up 50% more road tax. And as the car ages, the car maintenance cost will increase as time passes.

Now, assuming you purchase the exact same car model (but as a new car), you are now getting a brand-new car with significant technology advancement since your previous car. Most modern vehicles are equipped with the latest safety features that can help in a pinch. We definitely feel that is significant enough to warrant the purchase of a new vehicle as we have always mentioned, you will never know the benefit of safety features until you have used it.

Not to mention, new vehicles often look better than their predecessors and come with upgrades to the overall build and quality. The newer infotainment systems in modern vehicles can provide more information about your car and entertainment for the family. As mentioned above, you are also paying less road tax and maintenance thanks to having a new car with no worn parts. The new car even comes with a warranty! If you are already paying so much for the COE, it might just be a better option to pay more for a better car.

Of course, you may argue that this is not the most budget-friendly option based on the amount to be paid upfront when purchasing a new car. However, you may find it beneficial to have a vehicle with significantly fewer problems and one that provides a better quality of life a more meaningful purchase than renewing your current vehicle.

(To readers from the future if you are reading this and the COE prices have fallen significantly, you may realise that it might be worthwhile to scrap your vehicle and use the PARF and COE rebate to purchase a new car.)

 

Our final notes about leveraging on PARF rebates and COE rebates

With the seemingly ever-rising COE and fuel prices in Singapore, driving in this Little Red Dot has become even more costly. For those that are considering whether to scrap, sell or continue driving your vehicle, we hope that this article gave you a better understanding of how the scrap value of your vehicle is determined. Through the understanding of COE rebate and PARF rebate as well as the car’s body value, you can weigh the pros and cons of whether it is worthwhile to scrap your vehicle. If you are looking to scrap your car, contact us now to receive a quotation!