The Singapore car market explained: COE, PARF, loans and insurance
Last updated: October 2026
Buying a car in Singapore works differently from almost anywhere else. The price of a car is mostly made up of government charges, every car has a fixed lifespan on the road, and part of what you pay can come back to you when the car is scrapped or exported. This guide explains how it fits together, so you can compare cars, and loans, with confidence.
We don't quote COE prices here because they change twice a month. For the latest results, see COE open bidding on OneMotoring.
How the COE works
Every car on Singapore's roads needs a Certificate of Entitlement (COE). It's the right to register and use a vehicle for 10 years. The number of COEs available is limited, and LTA sets the quota for each period.
COEs are sold by open bidding. LTA holds two bidding exercises a month. They usually open at 12pm on the first and third Monday and close at 4pm on the Wednesday. During the exercise the price rises until the number of bidders at or above it matches the quota. The final price is the Quota Premium (QP), and every successful bidder in that category pays the same QP.
When you buy a new car, the dealer normally bids for the COE for you and the COE is part of the price. When you buy a used car, the car already has a COE, and what matters is how much of it is left.
COE categories A to E
| Category | For |
|---|---|
| A | Cars up to 1,600cc and up to 97kW (130bhp). Fully electric cars up to 110kW (147bhp). |
| B | Cars above 1,600cc or above 97kW. Fully electric cars above 110kW. |
| C | Goods vehicles and buses. |
| D | Motorcycles. |
| E | Open category: can be used for any vehicle except motorcycles. |
The power limits for Category A have applied since May 2022. LTA has consulted on changes to how cars are put into categories, so check the COE page on OneMotoring for the current definitions.
Renewing a COE: 5 or 10 years
When the 10 years are up you can deregister the car, or renew its COE by paying the Prevailing Quota Premium (PQP). The PQP is the moving average of COE prices for the category over the last three months in which bidding was held, and it is updated monthly.
- 10-year renewal: you pay the full PQP.
- 5-year renewal: you pay 50% of the PQP. For cars, a 5-year renewal can only be done once. When it ends, the car must be deregistered.
- Once a car's COE has been renewed, it no longer gets a PARF rebate when it is deregistered (see below).
Our COE renewal guide covers timing, costs and whether renewing makes sense.
OMV, ARF and the PARF rebate
OMV
The Open Market Value (OMV) is the car's import value, assessed by Singapore Customs. It is based on the purchase price plus freight, insurance and other charges to bring the car to Singapore. Most of the other charges are worked out from it.
ARF
The Additional Registration Fee (ARF) is a tax paid when a car is first registered. It is a percentage of the OMV, and the percentage is higher in the upper OMV tiers, so expensive cars pay proportionally more. It is paid on top of the COE, excise duty, GST and the registration fee. See ARF on OneMotoring for the current rates.
PARF rebate
If a car is deregistered (scrapped or exported) before it is 10 years old, and its COE has not been renewed, the owner gets back part of the ARF paid. This is the Preferential Additional Registration Fee (PARF) rebate. The older the car, the smaller the rebate. After 10 years there is none.
The schedule depends on when the car was registered. LTA cut it for cars registered with COEs from the second COE bidding exercise of February 2026 onwards:
| Age when deregistered | Registered before the change | Registered with a COE from the 2nd Feb 2026 bidding |
|---|---|---|
| Up to 5 years | 75% of ARF paid | 30% of ARF paid |
| 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 | Nil | Nil |
The rebate is also capped: at $30,000 for cars under the revised schedule, and at $60,000 for cars registered with COEs from February 2023 until the change. Source: LTA, revision of the PARF rebate schedule and cap. You can check the exact figure for any car on OneMotoring's rebates page.
COE rebate
A car deregistered before its COE runs out also gets a COE rebate: the unused part of the COE that was paid for, counted pro rata. PARF rebate plus COE rebate is what people call the car's paper value, the least the car is worth on the day it comes off the road.
Depreciation: how to compare used cars
Two cars at the same price can be very different deals if one has eight years of COE left and the other has three. That's why Singapore listings quote depreciation per year:
Depreciation per year = (price − value left when the COE ends) ÷ years of COE left
The "value left" is normally the PARF rebate the car would still earn at the end of its COE. For a car whose COE has been renewed it is zero. Because of the 2026 PARF change, two otherwise similar cars registered either side of February 2026 can have quite different depreciation, so compare carefully.
- Use depreciation to compare cars across ages and prices. It shows the cost of owning the car per year, before running costs.
- Check COE left, mileage, the number of previous owners and the service history, not just the figure.
- On our listings, depreciation is only shown when we have the figures to work it out properly. We'd rather show a blank than a guess.
New or used?
- New: full warranty, the latest models, a full 10-year COE and the highest PARF rebate for that car. You pay the current COE price and absorb the steepest depreciation in the first years.
- Used: a lower price, with part of the depreciation already taken by the first owner, and plenty of choice. The COE left is shorter, so the yearly cost can still be similar. Condition and history matter more.
- COE-renewed cars: often the cheapest to buy, but there is no PARF rebate at the end and only the COE that's left. A car on a 5-year renewal must be deregistered when it ends. Cars over 10 years old also pay a road tax surcharge and need an inspection every year.
Car loans: the MAS rules
The Monetary Authority of Singapore (MAS) limits how much banks and finance companies can lend for a car:
| Car's OMV | Maximum loan | Maximum tenure |
|---|---|---|
| $20,000 or less | 70% of the purchase price | 7 years |
| Above $20,000 | 60% of the purchase price | 7 years |
So you need a downpayment of at least 30% or 40% of the price. For a used car, lenders also look at the COE left, so the tenure offered can be shorter than 7 years. See MAS: motor vehicle loans. More detail in our car loan guide.
Insurance and NCD basics
Motor insurance is compulsory: every car on the road must be insured at least against third-party injury and death, and road tax can't be renewed without valid insurance. Most owners choose one of three levels of cover:
- Third party only: damage and injury you cause to others.
- Third party, fire and theft: adds cover if your car is stolen or catches fire.
- Comprehensive: also covers damage to your own car.
The No-Claim Discount (NCD) rewards claim-free years. With most insurers it rises in steps to a maximum of 50% after five or more claim-free years, and a claim usually reduces it. Read more in our car insurance guide.
Tips for buying a used car
- Compare depreciation, not just price, and check how much COE is left.
- Check the car's history: service records, mileage, number of owners, and whether it has been used commercially.
- Get an independent inspection at an inspection centre before you commit, especially for older cars.
- Check what's due: road tax expiry, the next inspection date and the COE expiry.
- Read the sales agreement: what's included, the warranty if any, and when the deposit is refundable.
- Sort the loan and insurance early, because the insurance must be in your name before the transfer.
Tips for selling your car
- Know your paper value (PARF plus COE rebate) from OneMotoring. It's the floor for any offer.
- Settle or plan the loan. A car under financing can't be transferred until the loan is dealt with.
- Gather the paperwork: service records, spare key and the manual all help the price.
- Compare offers (dealer, direct sale, consignment) and be clear about who pays which fees.
How ownership is transferred
Transfers are done online through OneMotoring's transfer of ownership service, with Singpass:
- The seller starts the transfer with the car's registration number and the buyer's ID and name.
- The buyer must already have motor insurance in their own name covering the road tax period, and then confirms the transfer with their own Singpass and pays the transfer fee.
- The car must not be under financing or have outstanding matters such as road tax arrears.
- Any road tax already paid, and the car's rebates, go to the new owner.
When you buy from us, we take care of the transfer paperwork with you.
Frequently asked questions
How long is a COE valid for?
A Certificate of Entitlement lets you register and use a vehicle for 10 years. At the end you either deregister the car or renew the COE for 5 or 10 years by paying the Prevailing Quota Premium (PQP).
How often is COE bidding held?
LTA holds two open bidding exercises a month. They usually open on the first and third Monday and close on the Wednesday. Results are published on LTA's website and OneMotoring.
What is the difference between Category A and Category B?
Category A is for cars up to 1,600cc and 97kW (130bhp), and fully electric cars up to 110kW. Category B is for cars above either limit. Category E is open to any vehicle except motorcycles.
How much can I borrow for a car in Singapore?
Under MAS rules, up to 70% of the purchase price if the car's OMV is $20,000 or less, and up to 60% if the OMV is higher. The longest tenure is 7 years.
What is the PARF rebate?
If a car is deregistered before it is 10 years old, the owner gets back part of the ARF paid. The percentage depends on the car's age and on when it was registered: cars registered with COEs from the second February 2026 bidding exercise get a lower rate and a lower cap.
How is depreciation worked out for a used car?
Listing sites usually take the price, subtract what you would get back when the COE ends (the PARF rebate, if any), and divide by the years of COE left. A lower yearly figure means less money lost per year of use.
Official sources
- OneMotoring: Certificate of Entitlement (COE)
- OneMotoring: COE open bidding and results
- OneMotoring: COE renewal
- OneMotoring: PARF and COE rebates
- LTA: revision of PARF rebate schedule and cap (2026)
- MAS: motor vehicle loans
- OneMotoring: transfer of ownership
More guides
- Renewing your COE — What renewing costs, 5 vs 10 years, timing, and what you give up.
- Used car loans — How much you can borrow, for how long, and how to compare loans.
- Car insurance and NCD — Third party vs comprehensive, how NCD works, and what affects the price.
This guide is general information, not financial or legal advice. Rules change: always check the official sources above before you decide.