Budget 2026: Rebates for scrapping cars early to be reduced, cap lowered
The Preferential Additional Registration Fee (PARF) rebates for cars will be reduced by 45 percentage points.
A view of traffic in Singapore. (File photo: CNA/Lan Yu)
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SINGAPORE: Rebates for scrapping cars before 10 years will be reduced and the cap lowered, given the growing prevalence of electric vehicles (EVs), Prime Minister Lawrence Wong announced on Thursday (Feb 12).
The government provides a Preferential Additional Registration Fee (PARF) rebate for cars that are deregistered before their 10th year. This will be reduced by 45 percentage points.
The current cap of S$60,000 (US$47,590) will also be cut to S$30,000.
This will apply to all cars registered in the next Certificate of Entitlement (COE) exercise, which begins on Feb 16.
Mr Wong made the announcement in the Budget statement on Thursday.
He said: “Electric vehicles are less pollutive than conventional petrol cars. As EVs become more common, the need to encourage early deregistration through the PARF rebate is reduced.”
EVs made up 45 per cent of new car registrations and 7.4 per cent of the overall car population in Singapore in 2025, up from 34 per cent and 4 per cent respectively in 2024.
HOW ARE THE NUMBERS CRUNCHED?
When a car is registered in Singapore, drivers have to pay an Additional Registration Fee (ARF), which is a percentage of the vehicle’s open market value.
The PARF rebate is calculated as a percentage of the ARF paid and tiered based on the age of the vehicle at deregistration.
For instance, a car that is currently deregistered before it is five years old will get 75 per cent of the ARF paid.
Under the revised rebate amount, that will be 30 per cent.
Cars of more than 10 years have no PARF value.
The Land Transport Authority (LTA) on Thursday gave the example of a car with an open market value of S$100,000.
Under the existing structure, the ARF paid is S$200,000. If the car is deregistered between five and six years old, the PARF is currently 70 per cent of the ARF, or S$140,000 - but the cap means the owner gets S$60,000.
Under the revised structure, the PARF is 25 per cent, or S$50,000 - but the new cap means the owner gets S$30,000.
For cars that do not need a COE for registration, such as taxis, the revised PARF rebate schedule and cap of S$30,000 will apply to those that are registered on or after Feb 13.
The revised PARF rebate schedule and cap do not apply to vehicles that are not eligible for PARF rebates, such as classic and vintage cars, as well as vehicles that have been laid-up.
