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PARF and COE cars The definitive guide
Acronyms. COE, PARF, OMV.
In Singapore, we use acronyms in an effort to make things less complicated. Because, let’s face it, buying a new or used car in Singapore is not for the faint hearted.
Our favourite acronym has nothing to do with cars, it’s this:
TODAY - Turn On Dreams Abandoned Yesterday
So if you dream of owning a car but are a bit baffled by all the acronyms, this post is for you! Make your favourite drink, put your feet up and let the trusty team at Budget Direct Insurance break it down for you.
- What is this acronym PARF? It stands for Preferential Additional Registration Fee (well you did ask…)
- Definition - A car that is still using its original COE
- Age - Less than 10 years old
- Quick facts - Normally, a new car in Singapore comes with an Open Market Value (OMV). This takes into account the cost of production of the car, including purchase price, shipping, insurance and other incidental charges.
- Link to check the OMV for your car
- What about the money? If the vehicle is de-registered within 10 years of its first registration date, the registered owner can claim a (PARF) Rebate. Normally a percentage of the OMV. Hence, the term PARF car
- Link to check your car’s PARF rebate
- What is this acronym COE? It stands Certificate of Entitlement (you probably knew that)
- Definition – A car whose COE has been renewed
- Age – Over 10 years old
- Quick facts - If you want to continue using a car after 10 years, you must renew the car’s COE. The cost will depend on the Prevailing Quota Premium (PQP).
- Link to check your car’s PQP
- What about the money? If you choose to renew a car’s COE, you will not be able to claim a PARF Rebate when the vehicle is de-registered. However, a COE rebate will be available to you.
- Link to check your car’s COE rebate
We also recommend checking out this handy guide on how to renew your COE. You may also want to know what are the best cars for COE renewals.
Should I buy a COE or PARF car?
Here’s a handy table to help you decide:
|Significantly cheaper to buy|
|A newer car means less wear and tear|
|May still be under warranty|
|Potentially higher resale value|
|Better, more current technology|
|Higher rate of depreciation|
How to make your decision
The car you buy will depend largely on your essential requirements, your lifestyle, the amount you drive, fuel efficiency and perhaps environmental concerns.
Scott Vance, founder of Trisuli Financial Advising says that when he was young, his dad would sit him down and have him split a piece of paper into two columns. "The left would be positives, the right would be negatives. Then [he would] have me list as many as I could think of. He made me do this for financial decisions such as car-buying, enlisting in the Army and college choices," Vance says. "It is something I still do today. Recognizing the negatives of a choice and the potential positives has always forced me to weigh the good and bad and make a decision fully knowing the negatives that may happen."
Source: US News, Money, July 2016
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