Car Depreciation in Singapore: How to Calculate Scrap Value and True Cost

Singapore has some of the highest car depreciation rates in the world — not because cars physically deteriorate faster here, but because of how the COE and PARF system structures the financial lifespan of every vehicle. Understanding depreciation is not optional for Singapore car owners. It is the difference between making a financially sound purchase and inadvertently losing tens of thousands of dollars.

What Car Depreciation Actually Means in Singapore

Car depreciation is the difference between what you paid for a car and what you recover when you get rid of it, spread across the years you owned it.

In most countries, depreciation is primarily about the car's market resale value declining as it ages. In Singapore, depreciation has a second layer: paper value erosion. Your car has government-backed rebate value (PARF + COE) that erodes on a fixed schedule, independent of the car's physical condition.

The standard depreciation formula:

(Purchase Price – Scrap/Residual Value) ÷ Number of Years Owned = Annual Depreciation

For Singapore, "scrap value" means the total you'd receive if you deregistered the car: PARF rebate + COE rebate + body/metal value.

How to Calculate Your Car's Scrap Value

Step 1: Find your ARF paid

The Additional Registration Fee (ARF) is calculated from the car's Open Market Value (OMV) at the time of registration. It appears on your vehicle registration card. If you don't have the original document, you can check it on LTA's OneMotoring portal.

ARF tiers (2026): - First S$20,000 of OMV → 100% - Next S$30,000 of OMV → 140% - Above S$50,000 OMV → 180%

A car with OMV of S$22,000 would have ARF of: (S$20,000 × 100%) + (S$2,000 × 140%) = S$22,800.

Step 2: Check your PARF rebate percentage

For cars registered before 13 February 2026 (old scheme): - Age 0–5 years: 75% of ARF - Age 5–6: 70% | Age 6–7: 65% | Age 7–8: 60% | Age 8–9: 55% | Age 9–10: 50%

For cars registered from 13 February 2026 (Budget 2026 new scheme): - Age 0–5 years: 30% of ARF (down from 75%) - Age 9–10 years: 5% of ARF (down from 50%) - Maximum cap: S$30,000 (down from S$60,000)

Step 3: Add your COE rebate

Pro-rated COE value = (Remaining COE years ÷ Total COE period) × COE premium paid at registration or last renewal.

Step 4: Add body value

Body value (also called scrap value or export value) is what the physical car is worth to a scrapyard or overseas buyer. For common models in decent condition: - Toyota Corolla / Honda Jazz: S$800–S$2,500 (scrap) or S$3,000–S$8,000 (export) - Toyota Alphard / Lexus: S$5,000–S$15,000 (export demand is high) - Obscure brands with no export market: S$500–S$1,000

How the Budget 2026 Change Altered Depreciation for Everyone

Before Budget 2026, a mass-market car (OMV ~S$22,000) registered in 2022 might expect roughly S$13,700 in PARF at year 9 (50% of ~S$22,800 ARF). That figure provided a meaningful cushion — some owners would sell at year 7 or 8 specifically to preserve a higher PARF band.

Under the new scheme, that same car registered in March 2026 would receive only S$1,140 in PARF at year 9 (5% of S$22,800). The cushion has essentially disappeared.

The impact on annual depreciation:

Assume a car purchased for S$140,000 in 2022 (pre-PARF cut): - Scrap value at year 10: ~S$15,000 (PARF + COE residual + body) - Depreciation: (S$140,000 – S$15,000) ÷ 10 = S$12,500/year

Same car purchased for S$140,000 in March 2026 (post-PARF cut): - Scrap value at year 10: ~S$3,000 (very low PARF + body) - Depreciation: (S$140,000 – S$3,000) ÷ 10 = S$13,700/year

That's S$1,200 more in annual depreciation purely from the policy change, on a car with the same sticker price. Singapore car ownership statistics underscore the stakes: there were approximately 990,000 motor vehicles registered as of 2025, with car ownership rates among the highest per-capita in Southeast Asia despite the world's most expensive vehicle market. These depreciation changes affect nearly every household with a vehicle.

Car Trade-In Value in Singapore

Trade-in value is what a dealer offers you for your current car when you buy a new one. It is almost always lower than what you'd get selling privately or through a direct export/scrap arrangement. Dealers factor in:

1. The same PARF + COE rebates you'd get yourself
2. Their margin (typically S$3,000–S$8,000 on a mass-market car)
3. Reconditioning costs if they plan to resell

To assess whether a trade-in offer is fair, calculate your car's deregistration value yourself (PARF + COE rebates via OneMotoring), add a realistic body/export value, then compare against what the dealer offers. If the gap exceeds S$5,000, negotiate or consider selling through an independent channel.

How to Check Your Car's Scrap Value

The most accurate source is LTA's OneMotoring portal: 1. Log in with Singpass 2. Under "Vehicle Information" or "Vehicle Ownership," look for your vehicle's PARF and COE rebate breakdown 3. These figures are updated monthly as your COE age changes

For export value estimates, contact 3–5 exporters directly. Most will provide a non-binding quote based on your car's registration number, mileage, and condition. Prices fluctuate with overseas demand (Japan, Cambodia, and Brunei are common destinations for right-hand-drive Singapore cars).

The One Number to Track

If you own a car, the single most important financial figure to monitor is your annual depreciation rate. Calculate it now using your current purchase price and projected scrap value. If you bought a pre-2026 car, your scrap value is higher than you might realise — that old PARF scheme is genuinely valuable and affects your sell-or-hold decision.

The Singapore COE Navigator includes a complete depreciation calculator that factors in your car's registration date, OMV, ARF, and remaining COE — plus a side-by-side comparison of 5-year renewal vs. new car vs. keeping your current vehicle. Most people who run the numbers are surprised by the result.