Buy a car in Singapore and the number on the price list is the smallest part of the story. Underneath it sit three short acronyms that quietly decide what you hand over on day one and what comes back to you at the end.
Most owners meet them properly only twice. Once when they sign for the car, and once when a ten-year Certificate of Entitlement (COE) expiry forces a decision about keeping it or letting it go. By that second meeting the question has usually turned into a money question, and a COE renewal loan in Singapore is one of the answers sitting on the table. We would rather you met the terminology earlier, so here is the plain version, with the financing kept out of the way until the words make sense.
Open Market Value sets the baseline
Open Market Value (OMV) is the figure Singapore Customs assesses for a vehicle before a single local tax is added. It covers what the car itself cost, plus the insurance and freight needed to bring it here.
A mainstream Category A saloon of the sort most families drive typically lands somewhere in the low twenty-thousands. That figure is not what you pay, and it is not what the car fetches on the road. Treat it as the base the taxman measures from.
Every fee below is calculated off it, which is why two cars with similar showroom prices can carry very different rebates a decade later. Their OMVs were never the same to begin with.
The Additional Registration Fee does the heavy lifting
The Additional Registration Fee (ARF) is the tax that turns a modest OMV into a Singapore price tag, and it is charged in bands that bite harder the higher you climb. For cars registered with a COE obtained from the second bidding exercise of February 2023 onwards, the Land Transport Authority (LTA) publishes a vehicle tax structure that sets the ARF at 100% of the first $20,000 of OMV, 140% of the next $20,000, 190% of the slice from $40,001 to $60,000, 250% from $60,001 to $80,000, and 320% on anything above that.
Put a $30,000 OMV through that and you get $20,000 taxed at 100% and $10,000 taxed at 140%, for an ARF of $34,000 before the COE premium has even joined the queue. The tax frequently exceeds the value of the metal it is levied on, which is exactly why the rebate attached to it carries so much weight ten years later.
PARF is the money that comes back
The Preferential Additional Registration Fee (PARF) rebate is the slice of ARF that LTA returns when you deregister a car before it turns ten. It shrinks with every year the car ages, and it disappears completely on the tenth birthday. For cars registered before the second COE bidding exercise of February 2026, the schedule published on LTA’s PARF and COE rebate page runs as follows. Cars registered from the second February 2023 exercise up to February 2026 keep those same percentages, capped at $60,000.
| Age at deregistration | PARF rebate |
|---|---|
| Not more than 5 years | 75% of ARF paid |
| Above 5 and up to 6 years | 70% of ARF paid |
| Above 6 and up to 7 years | 65% of ARF paid |
| Above 7 and up to 8 years | 60% of ARF paid |
| Above 8 and up to 9 years | 55% of ARF paid |
| Above 9 and up to 10 years | 50% of ARF paid |
| More than 10 years | Nil |
What the February 2026 revision changed
LTA announced a revision on 12 February 2026 that cuts the schedule sharply for newer cars. Vehicles registered with a COE from the second bidding exercise of February 2026 onwards receive 30% of ARF at up to five years, tapering to 5% between the ninth and tenth year, with the rebate capped at $30,000 instead of $60,000. The full schedule sits in LTA’s news release on the revised PARF rebate.
Owners of older cars are untouched by this, which is the detail that tends to get lost in the headlines. If your car went on the road in 2016, the earlier schedule still applies, and the rebate sitting inside it is real money you have already paid for.
Where the jargon meets the renewal decision
Once a car passes ten years the PARF rebate is gone for good. Renewing the COE buys another five or ten years on the road by paying the Prevailing Quota Premium (PQP), and it permanently forfeits the rebate you would have collected by deregistering before the ten-year mark.
That trade-off genuinely cuts both ways. An owner with a well-kept car, modest annual mileage, and no appetite for a six-figure replacement may find renewal comfortably the cheaper route. An owner sitting on a large PARF rebate, facing a road tax surcharge that climbs every year past ten, and already eyeing a newer model may do better taking the rebate and moving on. Anyone telling you there is one correct answer for every car is selling something.
The arithmetic changes again if the replacement is pre-owned, since used car loan interest rates sit in a band of their own and behave nothing like the pricing attached to a renewal. Whichever way the sums fall, the financing question comes after the decision. At Accord Motor Enterprise we arrange the loan and submit the LTA paperwork on your behalf, and the financing company assesses and approves the application. The agreement itself states a contractual rate of 2.78% p.a., and the 2.45% p.a. promotional figure on our site is what you end up paying once a rebate we fund ourselves is applied.
Getting your own figures on paper
Fees like these stay abstract until somebody sets your own car’s numbers beside them. Come and see us, and we will work through what your vehicle is carrying and what a monthly instalment would look like if you decide to keep it. You will leave with the arithmetic, and the decision stays yours.
