LTA has revised the Preferential Additional Registration Fee (PARF) rebate schedule and cap for cars and taxis in Singapore, with the changes taking effect from the second COE bidding exercise in February 2026.
What changed
The revision was announced by Prime Minister and Minister for Finance Lawrence Wong as part of the Budget 2026 Statement. The cut is steep and uniform: every deregistration age band loses 45 percentage points of rebate, and the cap halves. Here is the schedule, old against revised:
| Age at deregistration | Old schedule | Revised schedule |
|---|---|---|
| Not more than 5 years | 75% of ARF paid | 30% of ARF paid |
| Above 5, not more than 6 years | 70% of ARF paid | 25% of ARF paid |
| Above 6, not more than 7 years | 65% of ARF paid | 20% of ARF paid |
| Above 7, not more than 8 years | 60% of ARF paid | 15% of ARF paid |
| Above 8, not more than 9 years | 55% of ARF paid | 10% of ARF paid |
| Above 9, not more than 10 years | 50% of ARF paid | 5% of ARF paid |
| More than 10 years | Nil | Nil |
| Rebate cap | $60,000, and no cap at all on COEs obtained before the 2nd February 2023 exercise | $30,000 |
LTA’s Annex A example: a car that paid $200,000 in ARF and is deregistered between five and six years old returned the capped $60,000 under the old schedule. The same car under the revised schedule: $30,000.
The revised rates apply to cars registered using COEs obtained from the second February 2026 bidding exercise onwards. Note that the $60,000 cap in the old column is itself relatively recent: it only covers COEs obtained from the second February 2023 exercise to the first February 2026 exercise. Cars on older COEs than that have no PARF cap at all. For vehicles that do not require a COE at registration, such as taxis and COE-exempt cars, the revised schedule applies to those registered on or after 13 February 2026.
The reasoning LTA put forward
LTA's stated position is that PARF exists to encourage timely renewal of the vehicle population, keeping it safer and less pollutive. The logic behind the reduction is that EVs, which are less pollutive than conventional petrol cars, are becoming more common.
One read of this is that as the fleet shifts toward EVs, the policy rationale for a generous early-deregistration incentive weakens, so the rebate is being trimmed to reflect that shift.
It could also be read as a broader recalibration of the cost structure around vehicle ownership in Singapore, where COE premiums, PARF, and ARF interact to set the effective price of buying and scrapping a car. A lower PARF cap of $30,000 means the residual value built into a new car purchase is smaller than before, which might affect how buyers think about total cost of ownership over a ten-year COE period.
What this could mean for buyers and current owners
For anyone who registered a car before the cutoff, the old PARF schedule still applies when that vehicle is eventually deregistered. The revised schedule only bites on cars tied to COEs from the second February 2026 exercise onward, so existing owners are not immediately affected.
For buyers entering the market now or in the coming months, the lower PARF cap is worth factoring into the purchase decision.
Whether that difference is material depends on the purchase price, the COE premium paid, and how long the owner intends to keep the vehicle.
Dealers and private sellers may also adjust asking prices over time as the market prices in the lower residual value. That adjustment could be gradual rather than immediate, so it may be worth watching COE results over the next few rounds to see whether bidding behaviour shifts in response.
Owners considering early deregistration of a car still on the old schedule might want to model the numbers before the window closes. A workshop inspection to assess the vehicle's condition could help inform that decision; the team at The Right Workshop can advise on mechanical condition as part of that process.
What to watch
The next few COE bidding rounds will be the first real test of how the market absorbs the change. If premiums soften as buyers factor in lower PARF returns, that would be a signal the revision is already working its way through pricing. If premiums hold steady, it may suggest demand is absorbing the cost difference without much friction.
Source: LTA / OneMotoring.
Source
This piece summarises and contextualises the official LTA release. Read the original at LTA Newsroom.
