Okay lah. Let’s not pretend.
Owning a car in Singapore was already a “flex only if you’re financially brave” situation. Now? It’s entering elite-level difficulty mode.
With the 2026 Budget, the Government just sliced the PARF rebate by 45 percentage points and capped it at $30,000 instead of $60,000. If you’re thinking, “Huh? Means what for me?” — relax. I break it down nice and simple.
But first, big headline:
If you’re buying a new car after the latest COE bidding round in February, you’re playing a different game already.
| Car Age | PARF Rebate (Before 2026 Budget) | PARF Rebate (After 2026 Budget) |
|---|---|---|
| 3 years | ~55% of ARF paid | ~10–15% of ARF paid |
| 5 years | ~37.5% of ARF paid | ~0–5% of ARF paid |
| 10 years | ~25% of ARF paid | ~0% (capped at $30,000 max) |
Wait — What Is ARF Actually?
Okay pause. Before we go further, let’s clear this up.
ARF means Additional Registration Fee.
In simple English?
It’s a tax you pay when you register a car in Singapore.
The Government looks at your car’s OMV (Open Market Value). Basically, what your car costs before all the Singapore-level boss taxes.
Then they say, “Based on this value, you pay extra.”
That extra tax is ARF.
The more expensive your car, the higher the percentage you pay. It’s tiered. So cheap car, less painful. Luxury car? Wallet confirm sweating.
And why does ARF matter so much?
Because your PARF rebate later is calculated from the ARF you paid.
So:
Higher ARF =
Higher upfront cost
Previously higher potential rebate
Now… much smaller rebate after the new rules
In short, ARF is the main reason cars in Singapore are not just transport — they’re financial commitments with attitude.
Wait — What Is OMV And Why Does It Matter?
Before we even talk about ARF, we need to understand OMV.
OMV stands for Open Market Value.
In very simple terms?
It’s the car’s “base price” before Singapore loads it up with taxes.
Think of OMV as the car’s raw cost:
- What the dealer paid to import it
- Including shipping and insurance
- Before COE, ARF, dealer margins and all the other Singapore magic happens
Now here’s why OMV is important.
ARF is calculated directly from OMV.
Higher OMV = higher ARF.
Higher ARF = higher upfront cost.
Higher ARF used to mean higher PARF rebate later (well… last time lah).
So OMV is basically the starting point of all your financial pain.
If your OMV is low, your ARF is manageable.
If your OMV is high, the tiered ARF system starts stacking percentages like it’s building a luxury tax tower.
And because the ARF tiers climb from 100% to 220%, every extra dollar of OMV above certain levels gets punished more aggressively.
That’s why two cars that look similar in showroom price can have very different tax structures underneath.
OMV is the quiet number that determines how expensive your car life is going to be.
Now that you understand OMV, the ARF calculations we showed earlier will make a lot more sense.
So How Much ARF Are We Talking About?
Okay, theory is cute. Let’s put real cars on the table.
Let’s compare a regular family sedan versus full-on tai-tai banker energy.
We’ll use estimated OMV figures (because ARF is calculated from OMV, not retail price).
Example 1: Toyota Corolla
Retail price: ~$144,000
Estimated OMV: ~$22,000
ARF breakdown:
- First $20,000 × 100% = $20,000
- Remaining $2,000 × 140% = $2,800
Estimated ARF: ~$22,800
Not small. But still survivable.
Example 2: BMW 7 Series
Estimated OMV: ~$90,000
ARF breakdown:
- First $20,000 × 100% = $20,000
- Next $30,000 × 140% = $42,000
- Next $30,000 × 180% = $54,000
- Remaining $10,000 × 220% = $22,000
Estimated ARF: ~$138,000
Yes. You read that right.
The ARF alone can cost almost as much as an entire mass-market car.
Side-By-Side Comparison
| Car Model | Estimated OMV | Estimated ARF |
|---|---|---|
| Toyota Corolla | ~$22,000 | ~$22,800 |
| BMW 7 Series | ~$90,000 | ~$138,000 |
What This Means
The system is designed to scale aggressively.
The more expensive your car, the harder the tax hits. It’s not linear. It jumps.
So when PARF rebates get cut, who bleeds more?
The person who paid $22k ARF…
or the one who paid $138k ARF?
Exactly.
This is why luxury buyers are feeling the Budget changes much more sharply. The higher your ARF, the more rebate you just lost under the new rules.
That’s not accidental. That’s policy design.
What Actually Changed?
| Car Model | Est. OMV | Est. ARF | PARF Rebate (Old Rule) | PARF Rebate (New Rule) |
|---|---|---|---|---|
| Toyota Corolla | $22,000 | ~$22,800 | ~$11,400 (≈50%) | ~$2,280 (≈10%) |
| Honda Civic | $24,000 | ~$24,800 | ~$12,400 | ~$2,480 |
| Mazda 3 | $23,000 | ~$23,800 | ~$11,900 | ~$2,380 |
| Tesla Model 3 | $40,000 | ~$40,000* | ~$20,000 | ~$4,000 |
| Audi A6 | $60,000 | ~$98,000 | ~$49,000 | ~$9,800 |
| BMW 7 Series | $90,000 | ~$138,000 | ~$69,000 | ~$13,800 |
Previously, when you scrapped your car before its 10-year COE ended, you could get back 50% to 75% of the ARF you paid. And it was capped at $60k.
Now?
Rebates slashed.
Cap reduced to $30k.
New registrations only.
If you already own a car in its first COE cycle, you’re safe. Don’t panic sell.
But if you were shopping for a new ride? Wah. The depreciation math just changed.
Why They Did This (According to Them)
The official reason?
EV adoption is rising. Electric cars don’t have tailpipe emissions. So the Government says there’s less need to encourage early scrapping.
Fair enough on paper.
But here’s the thing — this move hits almost everyone buying a new car. Not just the atas luxury crowd.
ICE vs EV: Who Crying Harder?
Let’s talk straight.
Internal combustion engine (ICE) cars are getting hit harder than electric vehicles (EVs). That’s because many EVs already enjoy rebates like the EV Early Adoption Incentive (EEAI) and the Vehicular Emissions Scheme (VES).
Some electric models even pay $0 ARF right now. Which means their PARF rebate was already zero — so this new cut doesn’t affect them much.
For example:
- MG4 EV
- Aion ES
- Dongfeng Box
These mass-market EVs? For now, still looking quite steady.
But don’t celebrate too early.
The EEAI incentive expires end of 2026. And VES confirmed only until 2027. After that? Nobody confirm-plus-guarantee anything.
So EV cheaper forever? Eh… don’t bet your angbao money on it.
So… Does This Mean “Quick, Buy EV Now”?
Not so fast.
Yes, on paper, EVs look smarter right now.
They enjoy incentives like the EV Early Adoption Incentive (EEAI) and better VES banding. Some even pay very low or zero ARF. And since PARF rebates are now slashed across the board, EVs don’t feel the hit as painfully as ICE cars.
But here’s the catch.
The EEAI expires at the end of 2026. That $7,500 carrot? Gone soon. VES rebates are only confirmed until 2027. After that, nobody promising anything.
So if you’re buying an EV thinking, “Confirm long-term cheapest option,” you might be overconfident.
Also, EV resale values are still evolving. Battery tech improves fast. Newer models keep coming. That means today’s EV could feel outdated faster than you expect.
And electricity prices? They aren’t exactly static either.
So is buying an EV now clever?
It depends.
If:
- You were already planning to buy new
- You can charge conveniently (home or workplace)
- You plan to keep the car longer
Then yes, buying before incentives disappear could make sense.
But if you’re rushing just because rebates are shrinking? That’s emotional buying, not strategic buying.
EV is not a cheat code. It’s just a different equation.
The smarter question isn’t “EV or not?”
It’s:
“Am I buying because it fits my life — or because I’m scared prices will go up?”
Because in Singapore, prices almost always go up. That alone cannot be your strategy.
Luxury Cars? Wah, Painful.
Because ARF in Singapore is tiered, the more expensive your car, the more you lose.
That means luxury sedans and premium SUVs are going to feel it the most.
We’re talking models like:
- BMW 520i
- Audi A6
- Mercedes-Benz E-Class
Even entry-level cars like the Suzuki Swift will see higher depreciation. But the jump is way sharper for high-OMV models.
Translation: The fancier your badge, the more your wallet sweats.
Even luxury EVs aren’t safe. Something like the Audi Q6 e-tron still carries a hefty ARF. Under the new rules, its future rebate shrinks dramatically.
So yes, EV helps. But premium EV? Still painful, leh.
Used Car Market: Next Hot Spot?
Now this is interesting.
If new cars depreciate faster, guess where buyers run?
Used cars.
Already, many Singaporeans buy based on monthly instalment comfort level. Not dreams. Not vibes. Just: “Can I survive this payment or not?”
If more people shift to used cars:
- Prices in the resale market could rise.
- More owners may renew COE instead of scrapping.
And that second point is quite ironic.
If older ICE cars stay on the road longer because people renew COE, doesn’t that slow down the green push? A bit awkward, right?
Data already shows Singapore’s car population is ageing. More cars above 10 years old than before. This change might accelerate that trend.
Car Loans: Also Affected?
Now this one more subtle.
Because PARF rebates shrink, the “paper value” of a car at the end of 10 years becomes lower.
Banks might view loans as slightly riskier.
Even if the Monetary Authority of Singapore doesn’t change loan rules, approved loan amounts could shift because the car’s projected value drops.
Result?
Higher downpayment.
Tighter loan approvals.
More barriers.
Car ownership was already exclusive. Now it’s even more premium.
Is This About Wealth Inequality?
Let’s zoom out.
For years, the Government has made it clear: Public transport first. Private car ownership is not the priority.
In recent Budgets, including under Prime Minister Lawrence Wong, there’s been stronger messaging that cars are luxury goods.
COE revenue hit billions. And at the same time, public transport spending has increased. Rail expansion. Road maintenance. Reliability upgrades.
The message is clear:
Cars are not a basic need in Singapore. They are a lifestyle choice.
And lifestyle choices? You pay luxury tax.
Whether you agree or not, that’s the direction.
What Happened To COE Prices After The Announcement?
Funny enough, COE prices didn’t swing wildly after the news.
Except luxury buyers.
Some dealers reported cancellations for high-end models like:
- BMW 7 Series
- Toyota Vellfire
But for most buyers, it was too late. Contracts signed. Deposits paid. Dealers already bidding.
Timing also clashed with Chinese New Year. Some showrooms closed. COE bidding moved fast.
So a lot of people just had to swallow it.
Between You & Me
I’ll say this plainly.
If you need a car because of family, caregiving, or weird work hours — that’s valid. Singapore transport is good, but it’s not magic.
But if it’s just for convenience or status? Think carefully.
Right now, buying a new car is less about “Can I afford monthly instalment?” and more about “Am I okay locking myself into a system designed to get more expensive over time?”
Personally, I think the era of flipping cars every 5 years for decent rebates is slowly dying.
The smarter plays now?
- Buy used wisely.
- Choose models with lower OMV.
- Or hold longer and renew COE strategically.
The old formula changed. If you don’t adapt, your bank account confirm cry first.
So… Are The Golden Days Gone?
Honestly?
They were already fading when COE crossed six figures.
This PARF cut just cements it.
Singapore is doubling down on one truth:
A car is a luxury. Full stop.
You can still buy. Of course can.
But you must enter with eyes open.
No more dreaming. Now it’s just math.
