Car depreciation in Singapore: what it means and how to calculate it
Depreciation per year is the number to compare used cars on in Singapore. What it means, how to work it out, how PARF and COE cars differ, and what changed with the 2026 PARF cut.
Kaze Motors · Updated 22 October 2026
Short answer: depreciation per year is what a car costs you for every year you can drive it: its price, minus what you get back when its COE ends, divided by the years of COE left. Every car in Singapore has a fixed life set by its COE, so this, not the price, is the fair way to compare two used cars.
The formula
Depreciation per year = (price − value at the end of the COE) ÷ years of COE left
- Price is what you pay for the car.
- Value at the end of the COE is what you get back from the government when the COE runs out: for a car still on its first COE, its PARF rebate at 10 years old; for a car whose COE has been renewed, nothing.
- Years of COE left is the time until the COE expires, which is printed on every listing.
This is how depreciation is quoted on Singapore car listings, including every car on our site.
Two worked examples
A car on its first COE (a "PARF car"). An illustrative car priced at $90,000, with 5.5 years of COE left. It paid $40,000 in Additional Registration Fee (ARF) when new, and gets 50% of that back at 10 years old, so $20,000 at the end:
($90,000 − $20,000) ÷ 5.5 ≈ $12,730 a year
A COE car. An illustrative car whose COE has been renewed, priced at $30,000, with 4 years left. Nothing comes back at the end:
$30,000 ÷ 4 = $7,500 a year
Why COE cars often cost less per year
A renewed car has used up its PARF rebate, so its price no longer includes one. You pay only for the years of COE that are left. That is how an older luxury or performance car can cost the same per year as a much younger everyday car, or less. It is older, so check its history and condition carefully; see should you buy a COE car.
The PARF rebate, and the 2026 cut
When a car on its first COE is deregistered before it is 10 years old, the owner gets back part of the ARF paid when it was registered. That is the PARF rebate. How much depends on the car's age, and on when its COE was bought:
| Age when deregistered | COE bought before the change | COE bought after the change |
|---|---|---|
| 5 years or less | 75% of ARF | 30% of ARF |
| Over 5 to 6 years | 70% | 25% |
| Over 6 to 7 years | 65% | 20% |
| Over 7 to 8 years | 60% | 15% |
| Over 8 to 9 years | 55% | 10% |
| Over 9 to 10 years | 50% | 5% |
| Over 10 years | nothing | nothing |
| Cap | $60,000 for COEs from the second February 2023 exercise; none before | $30,000 |
Budget 2026 cut every rate by 45 percentage points and halved the cap, for cars registered with COEs from the second COE bidding exercise in February 2026 onwards. For depreciation, the row that matters is the last year: a car registered under the new rules gets back only 5% of its ARF at 10 years old instead of 50%, so more of its price is lost over its life.
An illustrative near-new car priced at $150,000, with 9.5 years of COE left and $60,000 of ARF:
| Value at 10 years | Depreciation per year | |
|---|---|---|
| COE bought before the change (50%) | $30,000 | about $12,630 |
| COE bought after the change (5%) | $3,000 | about $15,470 |
Cars registered with COEs from before the change keep the old rates for life, which works in their favour as used cars.
What depreciation does not tell you
- Running costs. Fuel, insurance, road tax, parking and servicing come on top.
- Loan interest. If you borrow, add the interest; see how car loan interest works.
- What you will get if you sell early. The formula assumes you keep the car until its COE ends. If you sell sooner, the price you get depends on the market, and COE prices move used-car values up and down.
- Condition. A low yearly figure on a neglected car is not a bargain.
Deregistering early: the scrap value
If a car is deregistered before its COE ends, the owner gets back its PARF rebate at its current age (if under 10 years old) plus a COE rebate for the unused part of the COE: the premium paid, pro-rated to the months left. Together these are the car's paper value, and a used car's price rarely falls below it. LTA's OneMotoring shows the rebates for any car. If you are selling, see how to sell your car.
How to use depreciation when you buy
- Set a yearly budget, not just a price.
- Compare cars on depreciation per year, then check age, mileage, history and running costs.
- Check the COE left against your plans. A car with 3 years left suits a 3-year plan; a longer plan needs more COE or a renewal.
- Check the loan. Lenders will not lend past the COE, so a car with little COE left needs a short loan and a higher monthly payment; see how much downpayment you need.
See every car we have ranked by depreciation per year. Ask us about any of them and we will show you how the figure is worked out.
Sources
Checked on 22 October 2026. Rules change, so check them again for any decision that depends on them. The figures above are illustrations.
- LTA OneMotoring: PARF and COE rebates
- LTA OneMotoring: Deregister a vehicle
- LTA: Example of the PARF rebate cap (2023)
More buying guides
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