Singapore Budget 2026: PARF Rebates Reduced For New Car Registrations

Singapore has announced cuts to Preferential Additional Registration Fee (PARF) rebates under its Budget 2026 measures.

Rebate rates for cars deregistered before the end of their 10-year COE lifespan will be reduced by 45% across all tiers. The rebate cap will also be halved, from S$60,000 to S$30,000.

Under the revised framework, cars scrapped within five years will receive 30% of their Additional Registration Fee (ARF), down from 75%. Vehicles deregistered between five and six years will receive 25% (previously 70%), while those scrapped between nine and 10 years will receive 5%, compared to 50% before.

The changes apply to vehicles registered using COEs secured from the February 2026 bidding exercise onward. Existing vehicles will continue under the current PARF structure.

Authorities said the revisions reflect evolving industry conditions, including growing EV adoption and lower emissions from newer models, which lessen the need to encourage early scrappage.

The adjustment is expected to affect vehicle depreciation patterns and replacement cycles, particularly within higher-ARF segments.

New EVs will still be affected by the new PARF rules, but the impact may feel smaller compared to ICE cars. Many EVs already get upfront incentives from schemes like EV Early Adoption Incentive (EEAI) and VES rebates.

Alright, give me an example!

Take a petrol car with an ARF of S$25,000. If the owner deregisters the car in its 4th year:

Under the old PARF scheme: Rebate = 75% of ARF = S$18,750

Under the new PARF scheme: Rebate = 30% of ARF = S$7,500

The owner would receive S$11,250 less in PARF rebates compared to before.

Okay, so what will likely happen?

For a start, used ICE cars could see stronger demand, because existing cars keep their higher PARF under the old scheme. Carousell’s used cars classifieds to the rescue!

Luxury ICE cars will be hit hardest. Their high ARF leads to the biggest rebate cuts.

Then what type of cars might "benefit"? Entry-level, Cat A-friendly EVs have the lowest exposure to PARF cuts, so they seem like the better “deal”. Not because they gained benefits, but because ICE cars lost a key financial advantage.

What about COE? We suspect PARF rebate cuts could cause a small, short-term dip in COE prices as some buyers delay new-car purchases. However, with fewer owners scrapping vehicles early, COE supply won’t increase - it might even tighten. The change alone is unlikely to drive any meaningful or lasting drop in COE premiums.

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