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Can I Scrap My Car with Outstanding Finance?

Fund the settlement on a car with outstanding finance from a hire purchase agreement. Sell your car or settle the outstanding finance before attempting to scrap your car.
OneShift Editorial Team
OneShift Editorial Team
18 Apr 2022
Today, instead of actually undertaking the process of deregistering your vehicle on your own, you can simply “sell your car” to a car dealer, who will then pay the upfront cost for your vehicle while simultaneously settling the outstanding finance on your vehicle.

Can I scrap my car with outstanding finance? - The short answer is no. If you have purchased your car on finance or through what is commonly known as a hire purchase agreement, as the legal owner of the vehicle, you will have to settle the outstanding finance (pay the settlement figure on your finance agreement) before even initiating the process to scrap your car.

Without this critical step, you would not be able to kickstart the deregistration process with LTA, and you won’t be able to redeem your PARF rebates. Traditionally, this entire process used to be done by the vehicle owner, or through a scrap yard agent, but this is a thing of the past, and there are now easier ways for vehicle owners to deregister their car without having to worry about the hassle of carrying out each and every time consuming step correctly. Here’s how you can do it.

How Things Used to Be:

Can I scrap my car with outstanding finance? - On paper, the vehicle deregistration process described by LTA is a rather complicated and long one. First, you’ll have to settle any outstanding loans with the finance company who loaned you the money to purchase the car in the first place. Next, you have to decide how you are going to deregister the vehicle - will you be sending the car to a scrap yard, an exporter or will you just be deregistering the vehicle while keeping the car body? To make this decision, one would often have to source for the best price available, before deciding on the right course of action. There is then a registration process which you will need to kickstart with LTA, and subsequently the redemption of the PARF rebates, if applicable to your vehicle. If you had purchased your vehicle using the Monetary Authority of Singapore’s (MAS) loan guidelines, you should have either fully paid for your vehicle by the time it is due for scrap. If for some reason however, you have purchased your vehicle outside of MAS guidelines, then you’ll need to ensure that you have enough money to pay for the settlement figure in your finance agreement upfront, as you’ll only receive any PARF rebates at the end of the deregistration process.

What’s the Issue With This Process?

Aside from the obvious hassle and amount of time you’d spend navigating these steps as a layman, there is also the primary consideration of how much you are going to get back from sending your car to the scrap yard versus exporting the vehicle. As you’ll have to solicit a quotation from each individual scrap yard or car exporter separately, it compounds your effort and time spent on the process, and the process does not often yield the best price possible for your vehicle. Then there is also the tedious nature of paperwork which you will have to fill in yourself, coupled with the fear that you’ll file a piece of documentation wrongly, leading to even more time spent trying to remedy the issue.

How You Can Avoid All These Issues:

Today, instead of actually undertaking the process of deregistering your vehicle on your own, you can simply “sell your car” to a car dealer, who will then pay the upfront cost for your vehicle while simultaneously settling the outstanding finance on your vehicle. The car dealer will then make their own decisions on what to do with the car - whether to scrap the car or export it. In some cases, they may even renew the COE on the car for resale - but you don’t even need to worry about that, as you’ve already gotten paid for your car, without having to go through any of that tedious paperwork. The best part about all this, is that if you go through a car bidding platform like OneShift, the platform will pair you with the car dealer that has submitted the highest bid for your car within 24 hours. This means that you’ll not only get the best price possible for your car, you’ll also be able to complete the process much faster, without any headaches or hiccups.

Scrap your car with Oneshift today.


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William Teng
2 weeks ago
The quote for my car was fast, responsive and the highest. The transaction was fast and explanation was clear. The person who inspected my car was friendly and professional. It was a good experience with OneShift.
William Chan
3 weeks ago
The transaction was very smooth from the minute I get on to their website trying to sell my car till the car ownership transferred and have the money paid by Pay Now into my account. It only takes less than 3 days. The person attending to me are very professional, Jon at the phone in their office and Sean Tan who came down to view and test the car. I am very happy to have decided to sell my car through "One Shift By Carousell"