COE — Certificate of Entitlement
A COE is a 10-year right to own and use a vehicle in Singapore, awarded by the Land Transport Authority through a monthly open bidding exercise. Every car on the road has a COE attached to it. When the COE expires, the car must either be deregistered, have its COE renewed for another 5 or 10 years, or be scrapped / exported.
Categories: Category A (cars up to 1600cc and ≤130bhp), Category B (cars above 1600cc or >130bhp), Category C (goods vehicles and buses), Category D (motorcycles), Category E (open category, all of the above).
How it affects price: the COE component is typically the single largest contributor to a new-car's price. A used car's price is heavily driven by how many years of COE remain — the shorter the COE, the lower the price, but the closer you are to expiry.
Read COE articles →
PARF — Preferential Additional Registration Fee rebate
PARF is the rebate you receive when you deregister a car that is 10 years old or younger (measured from the date of original COE registration). It is calculated as a percentage of the car's OMV (Open Market Value), and it is intended to offset part of the ARF you paid when the car was first registered.
PARF rebate schedule: for cars registered from the second half of 2023 onwards, the rebate is fixed at 50% of ARF paid (subject to prevailing policy). Older cars follow a graduated schedule by age.
How it affects you: if your car is PARF-eligible, the rebate goes to whoever deregisters the car — typically the last registered owner at the time of deregistration.
COE rebate
If your car is deregistered before its 10-year COE expires, you receive a pro-rated COE rebate based on the remaining COE period and the prevailing quota premium for the relevant category at the time of deregistration.
How it differs from PARF: PARF is a rebate on the ARF paid; COE rebate is the unused portion of the COE premium. They are independent and add up at deregistration.
OMV — Open Market Value
The OMV is the assessed price of a vehicle, including the cost of the vehicle itself, options, accessories and freight to Singapore. It is set by LTA based on market data and is used to compute the ARF.
Rule of thumb: OMV is essentially the price the car would have fetched in a competitive market, before Singapore-specific taxes are added.
ARF — Additional Registration Fee
ARF is a tax payable on top of the OMV when a vehicle is first registered in Singapore. The current ARF tiered structure (as of the latest LTA schedule) is:
- First $20,000 of OMV: 100%
- Next $30,000 (i.e. $20,001 to $50,000): 140%
- Next $50,000 (i.e. $50,001 to $100,000): 180%
- Above $100,000: 220%
How it affects you: the higher the OMV, the steeper the ARF. This is one of the reasons premium cars carry a significant tax component over their factory price.
Paper Value
In Singapore used-car context, "paper value" is the total rebate you would receive if you deregistered the car today: PARF rebate (if eligible) + pro-rated COE rebate. It is called "paper value" because it is the value the car holds on paper at deregistration, versus its trade or sale value while still roadworthy.
How it affects you: a car with high paper value and low market value is often worth more deregistered than sold — but only if the maths works at the COE category level.
Scrap vs sell decision →
Depreciation
Depreciation is the rate at which a car loses value over time. In Singapore, depreciation is driven less by mileage and more by COE time remaining, because COE expiry is the single largest determinant of residual value.
Simple rule: a car that loses one year of COE has typically lost $5,000 to $15,000 of value, depending on the category and the prevailing COE premium at the time.
Depreciation calculator →
Short COE car (2–3 years remaining)
A "short COE car" usually refers to a car with 2–3 years left on its 10-year COE. Short COE cars are the cheapest entry point into a Singapore car, but the clock is ticking — at COE expiry, the owner must renew, deregister, scrap or export.
Pros: low purchase price, low monthly financing, lower PARF/COE risk if you exit before expiry.
Cons: limited remaining road life, more uncertainty at COE expiry, harder to finance with most banks (loans usually must clear before COE expiry).
COE Renewal
A COE can be renewed for 5 or 10 years once the original 10-year COE expires. The renewal price is the prevailing COE premium (Category A or B, depending on the car) at the time of renewal.
Renew vs deregister: the decision depends on (a) prevailing COE premium, (b) the car's market value as a renewed-COE car vs its PARF/COE rebate, and (c) the car's mechanical condition at expiry.
Buy vs renew COE calculator →
Road Tax
Annual road tax in Singapore is calculated from the engine capacity (cc) and the COE category of the vehicle. The current rates are published by LTA and updated periodically.
Indicative range: road tax for a typical 1.5L sedan (Cat A) is roughly $700–$900/year. For larger Cat B engines, $1,200–$2,500+/year. Use the LTA road-tax calculator for an exact figure.
EIR — Effective Interest Rate
EIR is the true annualised cost of a loan, accounting for compounding and the timing of repayments. It is always higher than the headline interest rate.
Example: a "2.68% p.a." car loan with monthly rest may carry an EIR of around 4–5%, depending on tenure. Always compare EIRs, not headline rates.
Car loan calculator →
PPI — Pre-Purchase Inspection
A Pre-Purchase Inspection is an independent third-party inspection of a used car by a workshop of the buyer's choice, before the buyer commits to purchase. The buyer pays for the PPI; it is a small price for independent verification.
At Wheeley, you are welcome to PPI any car on our floor — and if the PPI finds something we missed in our 160-point report, we either fix it or unwind the deal.
More on the inspection →
