COE vs PARF Cars in 2025: Which Is Better for Your Budget in Singapore?

COE vs PARF Cars in 2025: Which Is Better for Your Budget in Singapore?

With Certificate of Entitlement (COE) prices crossing $100,000 and new cars like a Toyota Corolla Altis going for nearly $180,000, owning a car in Singapore now feels as costly as the price of a resale 2-room flexi flat. More Singaporeans are eyeing the used car market to stay mobile without breaking the bank.

That’s why it’s crucial to understand one key decision before diving in: COE or PARF car? It’s not just LTA lingo. This affects how much you pay upfront, what you get back at the end, and how much you’ll spend on maintenance and road tax along the way.

Here’s what every savvy buyer should know in 2025—especially if you’re trying to stretch every dollar.

What is the Preferential Additional Registration Fee (PARF) rebate?

The PARF rebate is a payout you can claim when you deregister a car that’s less than 10 years old. It’s essentially a refund on the hefty upfront taxes you paid when registering the car—more specifically:

1. The Additional Registration Fee (ARF)
2. The COE Quota Premium
3. The Registration Fee (RF)
4. And the $10,000 used car surcharge (if applicable)

However, the actual rebate is tied to the ARF value and decreases according to the car’s age at the point of de-registration.

In other words:

The newer the car when you deregister it, the higher the PARF rebate you’ll get back.

For example, a car deregistered within 5 years might get 75% of its ARF refunded, while one deregistered at 9.5 years will only return 50% of ARF. After 10 years, the PARF rebate disappears completely.

In 2025, this rebate must be claimed within 12 months of deregistering your car—and is capped at $60,000 regardless of the ARF amount.

You can use the rebate to:

• Offset the ARF or COE when buying your next car
• Transfer it to a family member
• Or simply cash it out

For full details and the latest breakdown of percentages, visit the official PARF rebate table on ONE.MOTORING.

What is the difference between a PARF car and a COE car?

A few years ago, it wasn’t hard to find a decent used car for under $60,000—even with COE. Fast forward to today, and prices have climbed, while the used car pool has become more complicated. Not every second-hand deal offers the same long-term value.

• If you want something dirt cheap to tide you over for a few years before upgrading, go for a COE car. 
• If you’re after something newer with resale potential and eligibility for rebates when you de-register, then look for a PARF car.

At first glance, the difference sounds simple: one comes with rebates, the other doesn’t. But the gap goes deeper—especially when it comes to long-term value.

Category	PARF Car	COE Car
Age of Vehicle	Less than 10 years old	More than 10 years old (COE renewed)
COE Status	Original 10-year COE still valid	COE has been renewed for 5 or 10 years
PARF Rebate Eligibility	Yes—50%–75% of ARF, depending on deregistration age	No—PARF rebate is forfeited permanently
COE Rebate Eligibility	Yes—based on remaining unused COE	Yes—based on remaining unused renewed COE
Total Rebate Upon Scrap	PARF + COE rebate	COE rebate only
Upfront Cost	Higher (due to newer age and rebate value)	Lower (due to age and no PARF rebate value)
Resale Value	Higher resale due to PARF value and newer condition	Lower resale due to age and no PARF rebate
Road Tax	Standard rate	Higher (with 10%–50% age-based surcharge)
Best For	Buyers looking for long-term use, better resale, and lower maintenance	Budget-conscious buyers needing a short-term or stop-gap vehicle

There are many other differences between PARF and COE cars that contribute to both their upfront and long-term cost, such as:

1. Downpayment for a COE car is cheaper than that of a PARF car

With 2025 prices climbing for PARF cars and COE premiums, buyers now face significantly higher downpayments. Here’s how it works:

• If the Open Market Value (OMV) is $20,000 or less,
  → You can borrow up to 60%,
  → Means you’ll need to make a 40% downpayment.
• If the OMV is more than $20,000,
  → You can borrow up to 50%,
  → Means your downpayment is 50% of its value.

Why COE cars still mean lower upfront cost

Go for a COE car if you want to reduce your upfront cost. Even though both COE and PARF cars typically require the same loan-to-value ratio, COE cars are significantly cheaper overall—making the downpayment much more manageable.

Example:

• A COE car priced at $45,000 needs a $22,500 downpayment (50%).
• A similar PARF car priced at $85,000 needs $42,500 (50%).

That’s a $20,000 difference upfront—a key reason many cost-conscious buyers lean toward COE cars.

Keep in mind PARF cars often require a 50% downpayment because their OMV is higher—and rebates boost their assessed value in the eyes of banks. If the remaining OMV is valued over $20,000, you can expect to put the full 50%.

2. COE rebate vs PARF rebate 

Much of a used car’s price tag comes from the rebates buyers receive from de-registering them.

• COE cars only retain value from their remaining COE rebate—whatever’s left when they’re de-registered. 
• PARF cars, on the other hand, qualify for both COE and PARF rebates, making them worth more when scrapped or sold.

As of 2025, PARF rebates are capped at $60,000, regardless of how high the ARF is.

You also have up to 12 months after de-registration to use or encash your PARF and COE rebates, or they will expire.

Here are some examples:

COE rebate for a COE car 

If you de-register your car before the remaining COE expires, you’re entitled to a rebate for the remainder of COE remaining. Since this rebate is passed onto the buyer, it’ll get factored into the resale value.

For example:

A used car registered in January 2015 has a PQP of $95,000 that is set to expire in January 2035.

If this car is sold in January 2030, you’d calculate the COE rebate by multiplying the PQP ($95,000) * the number of months remaining on the COE (60 months) and divide it by 10 years (120 months).

So the COE rebate would be: ($95,000 × 60) / 120 = $47,500

PARF rebate for a PARF car 

If you de-register your car before the 10-year depreciation period ends, you’re entitled to rebate based on a percentage of the vehicle’s ARF, which is also factored into the resale value.

The percentage you’ll receive is based on the following:

Number of Years Registered	PARF Rebate
5 Years or Less	75% of ARF
5 Years to 6 Years	70% of ARF
6 Years to 7 Years	65% of ARF
7 Years to 8 Years	60% of ARF
8 Years to 9 Years	55% of ARF
9 Years to 10 Years	50% of ARF
10 Years or More	Nothing

(Note: Maximum rebate amount is capped at $60,000 and must be used within 12 months of deregistration.)

3. Condition of COE cars makes it easier to negotiate for a lower price 

When it comes to resale value, the remaining OMV plays a big part and that’s directly tied to the condition of  PARF cars, which depreciates annually.

Whereas, for COE cars, there’s no fixed rebate or residual OMV, so resale value is more subjective. You have more room to negotiate—though part of the value may come from any unused COE, which will be refunded if the car is deregistered early.

Key factors that affect resale value & negotiation leverage

Check Category	What to Look Out For	Why It Matters
Odometer Reading	Anything above 20,000 km/year is considered high mileage	Higher mileage means more wear on the engine, gearbox, and suspension—which affects reliability
Service Records	Look for regular servicing every 6 months or 10,000 km, logged by an authorised workshop	Proves the car was well-maintained; missing records may hide past neglect
Battery Health (for hybrids/EVs)	Request battery test reports (from BCA or authorised dealers)	Battery replacement can cost $5,000–$10,000+—important for COE hybrids/EVs
Gearbox Performance	CVT, dual-clutch, or 6- to 9-speed autos should shift smoothly with no jerks or delays	Modern transmissions are complex and costly to repair
Suspension Wear	Listen for clunks over humps; test ride quality over uneven roads	A tired suspension affects comfort and safety
Brake Wear	Ensure there’s no squealing, vibration, or long stopping distance	Brake discs and pads are wear-and-tear items, but costly if neglected
Interior Electronics	Check infotainment screen, reverse camera, sensors, aircon, and digital displays	These are essential in newer cars and expensive to replace post-warranty
Exterior Condition	Look for panel alignment, paint quality, tyre tread depth (min. 1.6mm), and headlight clarity	Dents or uneven panels may indicate past accidents; poor tyres mean added replacement cost
Rust or Water Damage	Check boot, door sills, undercarriage, and floor carpets for rust or moisture	May suggest flood damage—a major red flag
COE Renewal History	Ask if the COE was renewed for 5 or 10 years; check date and cost	5-year renewals cannot be extended again—resale value is more limited

COE cars may be much cheaper upfront, but be prepared to pay higher (and more frequent) maintenance costs than newer PARF cars. If you want to save money on future maintenance costs, read up on How to Lower Your Car Maintenance Costs.

4. Road tax differs for a PARF and COE car

Depending on your choice, you may need to pay an additional surcharge on top of the road tax. It is based on engine size—the bigger the engine, the higher the tax (applicable to both PARF and COE cars). However, COE cars are subject to an additional surcharge of up to 50%, as they’re at least 10 years old.

Here’s the breakdown of the surcharge you’ll need to pay if you buy a COE car:

Age of Car	Additional Road Tax Surcharge
10 Years Old	Additional 10%
11 Years Old	Additional 20%
12 Years Old	Additional 30%
13 Years Old	Additional 40%
14+ Years Old	Additional 50%

You can use LTA’s Road Tax Calculator to check the exact amount payable based on engine capacity and vehicle age.

Note for EV buyers:

Road tax for Electric Vehicles (EVs) is not based on engine capacity, but on the electric motor power rating (kW). This generally makes EVs more cost-efficient in terms of road tax, especially for mid-sized cars. However, the age surcharge still applies for COE EVs, so you’ll need to factor that in if you’re considering a used EV with renewed COE.

Tip: If you’re considering a COE car to save on upfront costs, factor this surcharge into your long-term ownership costs. A 2.0L engine at 14 years old could mean paying 50% more in annual road tax—and that adds up.

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ALSO READ: Should You Buy a Used Car in Singapore? Pros, Pitfalls & Price Comparisons

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How do PARF and COE cars compare to each other? 

Based on these factors, we can clearly see that the upfront cost for a COE car is cheaper than that of a PARF car.

Though, the cost of a COE car can easily spike if you buy one with mechanical defects. Plus, you’re expected to pay higher road tax as well. On the other hand, PARF cars are newer, in better mechanical shape, and retain much of their resale value.

Choosing one is not only about budget, but knowing the risks that come with buying cheap. If you’re uncertain, here’s a simple overview to note the differences:

Factor	PARF Car	COE Car
Upfront Cost	More expensive than COE cars	Cheaper than PARF cars
Rebates	Can collect PARF and COE rebates if de-registered within 10 years	Can collect COE rebate only
Monthly Repayment	Higher monthly repayments	Lower monthly repayments
downpayment	Higher downpayments	Lower downpayments
Insurance Premium	Possibly high premiums depending on make and model	Higher premiums due to age of car
Loan Interest Rates	Lower car loan interest rates	Higher car loan interest rates
Maintenance	Lower chance of major repairs	Higher risk of incurring maintenance or parts replacement costs
Road Tax	Lower road tax	Higher road tax due to surcharge for cars aged 10 years or more
Road Tax Surcharge	Not applicable if <10 years old	Up to +50% surcharge for cars aged ≥10 years
Resale Value	Higher resale value after 2–3 years	Lower resale value and market demand
Mileage	Lower mileage, better condition	Higher mileage, varies based on usage
Warranty	Warranty may still be active	Expired warranty or not transferable
Transfer Fee	Must pay transfer fee	Must pay transfer fee
Suitability for First-Time Buyers	Better suited due to newer condition and peace of mind	Requires more diligence in inspection, may be risky for inexperienced buyers
EV Options	More likely to find newer EVs with CAT A/B COE and incentives	Older EVs are rare, battery degradation may be a concern
LTA Rebates for EVs	Eligible for EEAI and lower ARF	Not eligible for EEAI, limited lifespan for older batteries
OMV + ARF Structure	Higher OMV → Higher ARF → Higher PARF rebate upon deregistration	Usually lower OMV → No PARF rebate
COE Expiry Risk	Still retains significant value before 10 years	Must renew COE or deregister at expiry, risk of additional

PARF EVs vs COE EVs

EVs used to be rare sights on the road. Now, they’re everywhere – from mall carparks to resale listings. With 1 in 2 new vehicles being electric, they’re becoming mainstays even in the used car market.

But when it comes to buying a used EV, do the same rules and rebates apply?

• PARF EVs tend to be newer, often under CAT A or CAT B COE with lower usage. These are eligible for government incentives like:
  • EV Early Adoption Incentive (EEAI): Up to $15,000 rebate
  • Revised ARF structure: Lower upfront tax
• COE EVs are often over 10 years old. Risks include:
  • Battery degradation, which can cost $10,000–$20,000+ to replace
  • Loss of manufacturer warranty
  • Ineligibility for newer Green Tax rebates

Ready to shop for used cars? Check out online car marts such as Motorist.sg, Carro, DBS Car Marketplace, Oneshift and sgCarMart.

Final words

At the end of the day, rebates like PARF and COE are just part of the equation. A car’s true value lies in its condition, history, and how well it fits your lifestyle. Whether it’s for daily commutes or weekend drives, don’t let paperwork blind you to the basics.

Check the transfer count. Inspect the service records. Go for a test drive. Because while rebates can be refunded, regrets can’t.

Not forgetting, car insurance prices will affect your overall costs! Get the best car insurance quotes via our MoneySmart wizard here.