Car Depreciation Calculator (2026)

Car depreciation in Singapore is calculated as: (Purchase Price - PARF Rebate) / Number of COE Years. The PARF (Preferential Additional Registration Fee) rebate is the portion of your ARF that you get back when you deregister the vehicle within 10 years. This formula gives you the annual depreciation, which is the key metric savvy car buyers use to compare vehicles.

The PARF rebate is a refund of a portion of the Additional Registration Fee (ARF) you paid when registering the vehicle, for deregistrations within 10 years. Note: Budget 2026 revised the PARF schedule downward. For cars registered with COEs from the 2nd February 2026 bidding exercise onward, rebates are 30% (≤5 years) / 25% (6yr) / 20% (7yr) / 15% (8yr) / 10% (9yr) / 5% (10yr), with a cap of $30,000. Cars registered under the previous regime keep the older schedule of 75% (≤5yr) decreasing to 50% (10yr) with a $60,000 cap. After 10 years no PARF rebate applies regardless of regime.

In Singapore, the general wisdom is to sell before the 10-year COE expiry mark because you lose the PARF rebate entirely after that. Many owners sell at the 5-7 year mark for the best balance of depreciation and usage. Cars with lower annual depreciation are generally better value. The first 3 years tend to have the steepest depreciation.

Depreciation is the amount your car loses in value each year — it's a cost. Residual value is what your car is still worth at a given point in time. In Singapore, a car's residual value is largely determined by the remaining COE period and PARF rebate eligibility. A car with 5 years of COE left will have a higher residual value than one with 2 years left.

The PARF (Preferential Additional Registration Fee) rebate is a refund you receive when you deregister a car within its first 10 years. The rebate is a percentage of the ARF (Additional Registration Fee) you paid when registering the car — 75% if deregistered before 5 years, 50% if between 5 and 7 years, 25% if between 7 and 10 years. After 10 years, no PARF rebate applies. This rebate is a key part of the residual value calculation and directly reduces your effective depreciation cost. Cars with higher ARF (generally higher-priced cars) have larger PARF rebates.

The COE premium paid at purchase is included in the cost of ownership and is fully depreciated over the car's ownership period. A higher COE premium directly increases annual depreciation. Additionally, when you renew a COE at the 10-year mark, the renewal premium paid is depreciated over the renewal period (5 or 10 years). A $100,000 COE renewal over 5 years adds roughly $20,000 per year to depreciation before factoring in any residual value from the extended COE. This is why high COE periods substantially increase the true cost of car ownership in Singapore.

For private individuals, car depreciation is not tax-deductible in Singapore. However, for businesses and self-employed persons using a car for business purposes, capital allowances (a form of depreciation) can be claimed on the car's cost. The allowances are claimed over 3 years under Section 19(1) or over the asset's working life under Section 19(2) of the Income Tax Act. Private-use portions must be excluded. Luxury cars face additional restrictions — capital allowances are subject to a cost cap for expensive vehicles.

EV depreciation follows the same structural formula as ICE vehicles — purchase price minus residual value divided by years held. However, EVs in Singapore currently benefit from the EV Early Adoption Incentive (EEAI) which reduces ARF by up to $45,000, directly lowering the upfront cost and thus annual depreciation. The PARF rebate still applies to EVs the same as ICE vehicles. One key variable for EV depreciation is battery degradation — if battery capacity significantly reduces by the end of ownership, the residual value may be lower than comparable ICE vehicles of the same age.