COE VS PARF

COE V.S. PARF – Which One Best Suits You and Your Needs

PARF and COE Cars are growing in popularity in Singapore, and it’s not hard to see why. These days, the upfront cost of a new car can rival that of purchasing a BTO flat, meaning more and more Singaporeans are turning toward used cars instead to save some cash. And if you’re buying a used car, you only really have two options – a COE car or a PARF car.

Buying a used car in Singapore makes perfect practical sense at a time when new cars are so expensive, and PARF and COE cars offer much more than just an upfront cost saving – they offer you the opportunity to save money through PARF and COE rebates, too.

COE Vs PARF: What Are They and How Do They Differ?

Buying a used car allows you to access cars with a cheaper Open Market Value OMV and lower upfront costs. To take the best advantage, you’re going to want to buy a PARF or COE car. Both PARF cars and COE cars are eligible for either (or both) a PARF COE rebate according to the status of your used car, but PARF and COE rebates function in different ways.

In short, a PARF car allows car buyers to claim a PARF rebate based on a percentage of their car’s Open Market Value, on top of a COE rebate. Conversely, a COE car is eligible for a COE rebate only on older cars that car owners wish to continue using after they are 10 years old or more.

The key surface level difference between PARF Cars and COE is that:

  • COE cars are often the cheapest used cars on the market, whereas newer PARF cars typically cost more upfront.
  • Only the COE rebate can be claimed with a COE Car, whereas both the PARF and COE rebates can be claimed with a PARF car.
  • PARF cars generally attract a lower cost in the long term, with car loan interest rates and road tax typically cheaper, while COE cars come with a lower upfront cost but higher risks of incurring maintenance and other costs instead.

In the next section, we’ll delve deeper into the differences that PARF and COE car owners need to be aware of in greater detail.

 

COE vs PARF – Are COE Cars or PARF Cars Better?

Evidently, there are a lot of differences between PARF and COE cars – which means there’s an awful lot for you to think about when determining which is best for you. The table below explores the key differences between PARF and COE alongside each other, to help you make an informed decision on whether PARF COE is the best second-hand car choice for you:

COE Car

PARF Car

Access the cheapest used cars on the market (up front)

Cost up front is generally higher

Lower monthly repayments

Higher monthly repayments

Only the rebate for COE can be accessed at de registration

Both PARF and COE rebates are available when you de register within 10 years

Lower down payment costs

Larger down payment required

Higher interest payments on car loan

Lower interest payments on loan

Higher possibility of maintenance costs due to age of cars

Lower possibility of incurring maintenance costs with newer PARF cars, that are generally more reliable

You may need to pay higher road tax and car insurance

Better chance of lower road tax and car insurance

Higher mileage

Lower mileage

Lower resale value on older vehicles with more previous owners

Higher resale value on newer PARF cars (i.e. after 2 to 3 years’ ownership)

Car warranty likely to have expired

Car warranty may still be active on newer PARF cars

No transfer fee needs to be paid

Transfer fee usually involved

 

Ultimately, it all boils down to whether you want to buy the cheapest used cars from the outset and risk incurring maintenance costs later down the line or invest more money up front into a more reliable vehicle with a lower long term cost and potentially higher resale value when you come to sell it on. Let’s look at a couple of typical use cases.

COE CARS – Best for Car Buyers Who Want the Cheapest Used Cars

COE car prices differ considerably from what you might pay for a PARF Car. Generally, almost all COE cars will cost less up front, making the decision to buy a COE car a no-brainer for anybody who wants to pay a lower average price at the outset.

If you wish to continue using an old car after Singapore’s 10-year COE renewal period, opting to buy a COE car is also the best choice for you – and the same goes if you would like to pay a lower down payment or monthly repayments on your car than you might do with PARF. 

Just keep in mind that you can’t claim both the COE and PARF rebate on your car. Instead, if you de-register your car before its remaining COE expires, you can claim a COE rebate for the remaining COE only.

COE Car Perks Vs Limitations

  • Low COE prices up front, but potentially higher maintenance costs in the long run
  • Cheaper down payment and monthly repayments, but you might need to pay costlier car insurance/road tax
  • More affordable COE car prices up front, but likely to retain less resale value than PARF

Go for COE Cars if…

  • You want a cheaper down payment
  • You aren’t too worried about wear and tear
  • You want to continue using a car after COE renewal

white floor car parking

PARF CARS – Best for Car Owners Who Want a Lower Long Term Cost

If you started out looking at new cars, you’ll most likely find PARF cars more appealing than COE cars, as most PARF cars tend to be newer and more reliable. As such, you’ll benefit from lower overall costs in the longer term regarding maintenance, road tax and car insurance.

A PARF car also comes with the added benefit that you’ll be able to claim both the COE and PARF rebates available to you. To get your PARF rebate, you’ll need to deregister your PARF car within 10 years of its first registration date. At the point of deregistration, you’ll be able to claim a Preferential Additional Registration Fee PARF rebate worth a percentage of the Open Market Value OMV of your vehicle.

This Preferential Additional Registration Fee PARF rebate enables you to effectively offset upfront vehicle taxes such as the Prevailing Quota Premium PQP, registration fee and Additional Registration Fee ARF that you’d ordinarily need to pay.

PARF Car Perks Vs Limitations

  • Claim both PARF rebates and COE rebates, but with higher down payment costs
  • Enjoy a lower long-term cost overall, but pay higher monthly repayments
  • Take advantage of a better resale value, but you’ll need to pay a transfer fee

Go for PARF Cars if…

  • You want to save on maintenance fees, car surcharge and overall costs
  • You want something less vintage that’ll attract more rebates and don’t mind having to pay higher road tax or car insurance
  • You want to enjoy both PARF COE discounts and PARF rebates

Choosing Between a PARF and a COE Car – Which is Right for You?

Making the choice between a PARF car and a COE car isn’t always easy, but your circumstances and preferences should help you to come to the right decision.

If you want a new car that might require a higher maximum loan amount to purchase up front but will cost less in the long run, a PARF car is probably the way to go. Conversely, if you aren’t too concerned about wear and tear and you’d rather save cash by purchasing an older vehicle registered longer ago with more previous owners, a COE car may be a better fit. Just be sure to keep the following in mind:

  • A COE car registered earlier may be subject to more wear and tear, resulting in higher maintenance costs – and you may need to pay higher road tax and insurance, too.
  • Only a PARF car will entitle you to both COE rebates and a PARF rebate – i.e., both a PARF car and a COE car rebate.
  • You might need to get a car loan with a higher maximum loan to value to purchase a more expensive PARF car if you don’t have enough savings stashed away already.

Here at Instant Loan, we like to keep our readers up to date with the latest news and information regarding vehicle financing. We also offer a loan comparison service where you can retrieve up to three car loan quotes from licensed moneylenders absolutely free.

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