Saying Goodbye to Your Car? Here's How Much You Can Get From Scrapping Your Car
 
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Saying Goodbye to Your Car? Here's How Much You Can Get From Scrapping Your Car

Rachel Yeo
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A few weeks ago, during a particular home visit during Chinese New Year, my dad’s close friend proudly proclaimed that he has scrapped his car.

At that time, I was confused by his decision.

Why did he decide to scrap his car when he still has 2 years left on his COE?

How much does he get for scrapping his car in Singapore?

With all these questions in mind, I set out to find what it means to scrap your car in Singapore.

If you’re looking to scrap your car in Singapore, here’s a quick overview of the process, and how much money you can get back from it!

TL;DR: How To Scrap Your Car In Singapore

Steps Description Details
1. Apply for De-Registration - Clear any outstanding car loans and road taxes
- Deregister your car.

2. Apply for Encash for PARF and COE Rebate - Once you deregister your car, you can apply for the PARF and COE rebate.

- You will receive your PARF/COE rebate from LTA in 2-4 weeks.
3. Valuation of the Car - You will receive compensation for your scrap car at an LTA approved junkyard.

Once you receive compensation for your scrap car, the junkyard owns the car and can decide what they will do with it.
4. Disposal of Car/ Scrapping of Car You can scrap your car by engaging a motor dealer, or by doing it yourself.

To do it yourself, you can go to a LTA appointed Scrapyard.

If your vehicle is being exported, you can go to the LTA-appointed export processing zones (EPZs) or a LTA counter.

How much will you get back from scrapping your car?

  • COE Rebate
  • PARF Rebate
  • Compensation on car after valuation at LTA approved scrapyard

How Is Scrap Car Pricing Determined?

Spongebob shredding

What Is A Scrap Value? – The COE/PARF Rebate

The scrap value is made up of two parts: COE Rebate and the PARF Rebate.

COE Rebate

You will receive a rebate based on the portion of unused COE. This is pro-rated to the number of months and days remaining on the COE, and is based on the last Quota Premium (QP), or Prevailing Quota Premium (PQP) that you paid!

The COE amount is determined based on what you paid when you first bought or registered your car. There are, however, some exceptions to this:

  1. In the unlikely event that you decide to scrap your vehicle after 2 years for export, your vehicle will be subjected to other rules.
  2. If your vehicle is registered under the Open category COE, rebates will be based on the lower Quota Premium of the Open Category.

In general, COE Rebate can be calculated using the following formula:

COE rebate = (Quota Premium paid x number of months left on your COE) / Total number of months bought by COE

For example, you paid a quota premium of $35,000 for your COE. If you decide to deregister your car after 8 years and 10 months, here’s a breakdown on the COE rebate you will receive:

  1. Number of months left on COE = 10 years – 8 years 10 months = 14 months left
  2. COE Rebate = ($35,000 x 14)/129 months

You will get $3,798.45 in COE rebate back for your car!

If your COE expires before you deregister your car, you will not receive a COE rebate. At the same time, if you were to register a ‘brand new’ car within 2 years of its registration, your COE rebate will be capped at 80% of the quota premium paid.

PARF Rebate 

CARS
Source: Giphy

The PARF rebate is a percentage of the additional registration fee (ARF), a tiered tax rebate based on the open market value of the vehicle. The additional registered fee is considered part of the purchase price of the car.

Age of Deregistration PARF Rebate (as % of ARF paid)
Under 5 years75%
Over 5 but under 6 years70%
Over 6 but under 7 years65%
Over 7 but under 8 years60%
Over 8 but under 9 years55%
Over 9 but under 10 years50%
Over 10 yearsNothing

In general, the more you pay for your car, the higher the PARF rebate will be. If your car is over 10 years old, you will not receive a PARF rebate as a PARF rebate is only for cars below 10 years old.


So… Do I get the COE or PARF Rebate?

Kermit Drive Car In Disbelief

If your vehicle is below 10 years old, you are entitled to BOTH the COE and PARF Rebate

PARF/COE rebates are valid for 12 months from the vehicle deregistration date. You have 12 months to redeem all PARF/COE rebates from the date of deregistration before it expires.

How Do I Redeem My Rebates?

There are 3 different ways you can redeem your PARF and COE rebates. You can…

  1. Take them out in cash
  2. Use rebates to offset taxes and fees when you register a new vehicle
  3. Transfer the rebate to someone else

The LTA Website provides a detailed step by step guide on how to do this. You can visit them to find out more!

How Do I Scrap My Car In Singapore?

Source: Giphy

It’s time to say goodbye to your car. If you’re looking to scrap your car, here’s a step-by-step process on how to do it.

Steps Description Details
1. Apply for De-Registration - Clear any outstanding car loans and road taxes
- Deregister your car.

2. Apply for Encash for PARF and COE Rebate - Once you deregister your car, you can apply for the PARF and COE rebate.

- You will receive your PARF/COE rebate from LTA in 2-4 weeks.
3. Valuation of the Car - You will receive compensation for your scrap car at an LTA approved junkyard.

Once you receive compensation for your scrap car, the junkyard owns the car and can decide what they will do with it.
4. Disposal of Car/ Scrapping of Car You can scrap your car by engaging a motor dealer, or by doing it yourself.

To do it yourself, you can go to a LTA appointed Scrapyard.

If your vehicle is being exported, you can go to the LTA-appointed export processing zones (EPZs) or a LTA counter.

Scraping Your Car In Singapore

For those looking to scrap your car in Singapore, we hope we’ve given you a good overview on how much money you will get back, as well as a guide on how to do it!

There are, of course, other alternatives such as renewing your COE, selling your car, or exporting it as well!

So do remember to do your due diligence before making a decision.

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About Rachel Yeo
Breaking down complicated financial pieces into idiot-proof articles.
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