Singapore is a small country with a limited land resource. In light of this, COE (certificate of entitlement) was introduced to regulate the number of drivers on the road to avoid congestion. It is a right to vehicle ownership for 10 years. For someone who wants to purchase a car, he will need to go through a bidding process.
Before the end of the 10-year COE entitlement, you can decide on whether you want to export your car or to scrap it. There are different pros and cons concerning each of the options.
Scrapping Your Car
When you choose to scrap your car, you will need to find out what is the value of your scrap car. This is determined by a few factors which include the depend and supply of your car and the model. If the supply of your car falls below the demand for it, you will be able to fetch a much higher rate when you scrap it.
The value of your scrap car is made up of the total COE rebate and the car PARF value. When your vehicle is de-registered within 10 years from its first registration date, you will be entitled to a Preferential Additional Registration Fee (PARF) rebate.
Scrap Value = Total COE rebate + Total PARF rebate
If you decide to drive your car until the last day of your COE, the scrap value of your car will be equivalent to the total PARF rebate. Before you decide on whether to scrap your car or export it, it is important to consider the pros and cons or each option.
Pro: You will be able to get the full paper value including the road tax rebate
Con: It involves a lot of hassle and long waiting time
After you have sent your car to an LTA-appointed scrapyard, your rebate will be held by LTA for 3-4 weeks before you receive the payment.
Exporting Your Car
Some people prefer the option of exporting their cars before the expiry of their COE. This option usually will give you a higher monetary return. It means you will export your car to dealers in other countries. However, the value that is placed on your car is dependent on a few factors such as popularity, demand, and driving conditions.
Pro: Compensated for body value and the process is hassle-free and efficient. The exporter will be the one handling the paperwork and you will receive the money immediately after handing over your car. Unlike scrapping it, you don’t have to wait and monitor when the money will be released by LTA.
Con: There will be a 1-2% deduction from the paper value that acts as an interest
After considering the different pros and cons of scrapping your car and exporting it, bear in mind to compare which option gives you a higher monetary return. Eventually, the option which helps you to get a higher return will be more beneficial to you.