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COE and PARF - Help?

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kiwileon
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Joined: Mon, 04 Sep 2006
Location: Singapore

COE and PARF - Help?

Postby kiwileon » Mon, 13 Aug 2007 10:58 am

Can anyone explain the linkage between PARF and COE? Also, can anyone confirm or deny the truth of - "the LTA will refund you the PARF value at the end of the COE expiry".

I am looking at a 2001 car with a $101 COE, and have been told the PARF is >80% and therefore if it is scrapped at the end of its 10 years the LTA will refund the PARF by cheque.

All input welcome. :???:


christay
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PARF and COE rebates

Postby christay » Mon, 20 Aug 2007 5:39 pm

Hi there,

just my $0.02 worth and to summarise :)

When you buy a NEW car in Singapore, you pay taxes / duties / COE upfront.

The COE lasts for 10 years.

Up to the 10th year, if one were to deregister one's car, one will be entitled to certain "rebates" from LTA.

There are 2 rebates:

COE and
PARF

COE rebates are calculated on a straightline. Therefore after 5 years, if your COE cost $30000 orginally, the COE rebate will be $15000.

So for a $101 coe, the rebates are almost nothing.

PARF rebates are slightly more complicated.

A good summary can be found here http://www.fussfreeauto.com/advice-article9.html

If a car is deregistered before the 10th year, higher PARF rebates apply.

IMPT: All the rebates above are NOT paid in CASH. LTA issues a piece of paper stating your rebates. This paper can be used mostly to offset the taxes for a NEW car in your name. The rebates are transferable. Many dealers will buy paper rebates a slight discount from Par value, usually a couple of % off.

Buying a $101 COE car is only a good idea if you intend to own it till the end of the COE. This is because the underlying value of the car (Paper + Body) is low. However, over 3/4 years, you would be able to amortise this premium and thus, enjoy a "reasonable" annual loss.

Hope this helps :)

Chris


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