Scrapping a used car in Singapore most commonly occurs when the 10 year lease from the Certificate Of Entitlement (COE) is nearly up. Owners who choose not to pay the Preferential Additional Registration Fee (PARF) to extend the COE will have forfeited their right to using the car on the road. As such, before the expiry date of the COE is up, car owners often resort to scrapping their cars and claiming compensation for doing so.
An interesting question is then often raised, which is what the value is that car owners get in return for scrapping their car. Several factors are involved here, which we intend to cover in this article.
COE Rebate & PARF Value
The COE rebate can be attained when a car is deregistered before the expiration date of the Certificate of Entitlement. On the other hand, the PARF rebate is given when the vehicle is registered before its 10th year of age. If this sounds confusing, it really isn’t. Simply put, if you are deregistering your car during its first COE cycle, then you are entitled to both the COE rebate and the PARF rebate. However, if the car that you owned is on its 2nd COE cycle, then you will only be entitled to the COE rebate if you deregister it before the expiration date of the current COE. Regardless of when you scrap your car in this second cycle of the COE, you will not receive the PARF rebate.
Your Car’s Current Condition Matters
The amount of wear and tear or the car’s current condition will be assessed by dealers when determining its fair value. A car that has been worn down more or being on the road for a greater number of years will naturally receive a lower evaluation as compared to newer cars. Moreover, any defects or damages may severely limit the evaluation that agents make.
The Market Also Affects Your Car’s Value
The supply and demand of your car model in a particular year will affect its base value. Where your car is in high demand, you will likely receive a better price from car dealers. However, the opposite is also true where you will receive low offers if your car model has a surplus. Knowing the supply and demand for your car’s model moving forward will help you to find an opportune time to scrap your car.
Getting the Car Scrapping Process Started
To start, you should get in touch with your chosen scrap car dealer. They will then advise you on the administrative process as well as make an offer for your car based on some basic information that they can ask over either phone or email. Once you have agreed, a date will be set aside for the transfer of ownership. This will require you to go down in person to the car agent’s office to sign the paperwork and to receive payment.