All cars in Singapore require a Certificate of Entitlement (COE) in order to be driven on the road. A failure to comply with such is a breach of the law. Depending on when you bought your current car and the number of years left on its certificate of entitlement, it may be approaching its expiration date. All COEs are worth for a duration of 10 years, in essence it gives a car the right to be on the road for a decade. Hence, if your car has been operational for close to 10 years, you will have to decide whether or not to renew its certificate of entitlement.
Renewing Your Car’s COE
To renew a car’s COE, you will have to pay the Prevailing Quota Premiums (PQP) which is the cost of renewal. The PQP is an amount that is the average of the previous three months’ COE prices. If you have already made up your mind to extend the COE, then we strongly encourage you to pay the PQP before the current COE’s expiration date. Doing so will allow you avoid late payment penalties.
Another point that you should take note of is that if you do renew the COE then you will not be eligible to get the PARF rebate even you deregister your car in the future. As such you should factor in the costs of losing out on the Preferential Additional Registration Fee (PARF) rebate, scrap value and PQP against the cost of getting a new car and COE.
If you decide to forgo extending the COE, then you should consider scrapping or exporting your car.
Scrapping Your Car
If you choose to scrap your car, and it is done within the first COE duration then you would be eligible for the PARF rebate. This rebate is a percentage of your vehicle’s original production cost, thus it varies from vehicle to vehicle. The good news is that this is not the only amount of compensation that you will receive for scrapping your car.
How much do you get for scrapping a car? Well this varies based on two more factors – the demand for your car model as well as its existing condition at the time of scrapping.
Firstly, the market’s supply and demand for your car model in particular year will have a big impact on its value. If you are fortunate to be in a year where your car’s model is in demand, then you will likely receive a more favourable evaluation.
Secondly, the amount of wear and tear on your car as well as the number of years in which it has been on the road will also be factored in. The more worn out the car is, the lesser value it will receive from car agents.