Singapore's Certificate of Entitlement (COE) prices saw little movement following sweeping cuts to car scrapping rebates, with the exception of luxury car buyers. Industry insiders report some high-end vehicle orders, including for models like the BMW 7 Series and Toyota Vellfires, have been cancelled. Many buyers had already committed to purchases and paid deposits before the Budget 2026 announcement on February 12th, making it financially unfeasible to withdraw.
The revised Preferential Additional Registration Fee (PARF) scheme now caps rebates for scrapping cars before their 10-year COE expires at S$30,000, a reduction from previous levels that offered up to 75 percent of the Additional Registration Fee (ARF) capped at S$60,000.
This change disproportionately affects luxury vehicles, as the PARF rebate is calculated based on the ARF, which is pegged to the car's open market value. Consequently, higher-priced cars previously qualified for larger absolute rebates, making the new cap a more significant financial hit. Premiums for more powerful cars in Category B saw a notable drop, falling below those for smaller cars in Category A for the first time in years.
Analysts anticipate the full impact of the PARF changes will become evident in subsequent COE auctions as buyers and dealers adjust. While short-term fluctuations are expected, the policy changes signal a structural increase in car ownership costs. The market's long-term trajectory will also be influenced by an anticipated increase in COE supply over the next few years, a consequence of high volumes issued in the late 2010s.