Singaporean car owners will receive significantly reduced rebates when deregistering vehicles, effective with the next Certificate of Entitlement (COE) bidding exercise closing on February 20th, 2026, and for taxis registered on or after February 13th, 2026. The changes, announced by Prime Minister and Minister for Finance Lawrence Wong as part of the Budget 2026 statement, lower the Preferential Additional Registration Fee (PARF) rebate by 45 percentage points.
Under the current system, a car with an open market value of S$100,000 incurs an Additional Registration Fee (ARF) of S$200,000. If deregistered between five and six years old, the owner currently receives a PARF rebate of 70 percent of the ARF, amounting to S$140,000, though this is capped at S$60,000. The revised structure reduces this to 25 percent of the ARF, or S$50,000, but the new cap of S$30,000 will be the maximum payout.
The PARF rebate is designed to incentivize the timely renewal of Singapore’s vehicle population, promoting safer and less polluting vehicles. However, officials noted the increasing prevalence of Electric Vehicles (EVs) – which accounted for 45 percent of new car sales in 2025 – reduces the necessity for such incentives. EVs are inherently less pollutive than conventional petrol cars.
The revised PARF rebate schedule is as follows: vehicles deregistered within five years will receive 30 percent of the ARF paid, down from 75 percent. Vehicles between five and six years old will receive 25 percent, reduced from 70 percent. Vehicles between six and seven years old will receive 20 percent, down from 65 percent. Vehicles between seven and eight years old will receive 15 percent, reduced from 60 percent. Vehicles between eight and nine years old will receive 10 percent, down from 55 percent, and those between nine and ten years old will receive 5 percent, reduced from 50 percent. Vehicles older than ten years will continue to receive no PARF rebate.
The Land Transport Authority (LTA) clarified that the revised PARF rebate schedule and cap do not apply to vehicles ineligible for PARF rebates, including classic and vintage cars, as well as vehicles that have been laid-up. For cars that do not require a COE for registration, such as taxis and COE-exempt vehicles, the revised schedule and cap apply to those registered on or after February 13th, 2026.
Observers have suggested the reduction will likely increase vehicle depreciation, particularly for cars with higher ARF values, and may dampen demand for those models. The LTA has not yet commented on potential impacts to the COE market.
