The PARF Cut Is Permanent. The EV Rebates Aren't. Do the Math.
16 March 2026 · 9 min read · PaperValue.sg
Here's a fun exercise. Go read the coverage of Budget 2026's PARF changes and count how many articles end with some version of "but EV buyers are barely affected."
They're not wrong. In 2026, that's technically true.
They're also not telling you the whole story. And the part they're leaving out is the part that actually matters.
The government just cut your PARF rebate by 45 percentage points and halved the cap from $60,000 to $30,000. (For the full schedule and dollar impact by car segment, see our PARF changes breakdown.) That's permanent. No sunset clause. No review date. No "we'll see how it goes." It's done. The new normal. Forever.
The EV rebates that supposedly make this painless? The EEAI dies on 31 December 2026. The VES runs until 31 December 2027. Maybe.
So we've got a permanent cut paired with temporary relief, and everybody's focused on the temporary part. That's like celebrating your pain medication while ignoring the fact that your leg is broken.
The Numbers That Make Everyone Feel Better
Let's look at two cars bought today in 2026. Same OMV of $27,000. One ICE, one EV.
The ICE car (Toyota Corolla Altis 1.6): ARF on a $27,000 OMV is roughly $30,000. Under the new PARF structure, scrap it at year 10, you get back 5% of your ARF. That's $1,500. Under the old structure, you'd have gotten 50% — $15,000. So the government just kept an extra $13,500 of your money. Cool.
The EV (BYD Atto 2): Same OMV, same base ARF of ~$30,000. But right now, the VES Band A rebate ($22,500) and EEAI ($7,500) wipe the ARF down to zero. PARF at year 10 is 5% of the net ARF paid. Five percent of zero is zero. The PARF cut doesn't hurt because there's nothing to cut.
And this is where every commentator stops. "See? EVs are protected. The government is nudging you toward electric. It all makes sense."
Sure. For the next 12 months.
2028: When Nobody's Protected
Here's the same comparison for a car bought in 2028, after the EEAI has ended and VES is either expired or gutted.
The ICE car: Same deal. ~$30,000 ARF. 5% PARF rebate at year 10. $1,500 back. Nothing changed — the hit was already baked in.
The EV: And here's where the story gets uncomfortable. No EEAI. VES either gone or neutered. The EV buyer now pays full ARF. Same ~$30,000 as the Corolla driver. Same 5% PARF rebate at scrap. Same $1,500 back.
The EV buyer is now in the exact same position as the ICE buyer.
The whole "EVs are protected" thing? It had an expiry date. And nobody put it on the packaging.
Follow the Money
Let's stop pretending this is about the environment for a second and look at where the money actually goes.
Mass-market car (OMV ~$25,000, ARF ~$27,000): Old PARF at year 10: $13,500. New PARF at year 10: $1,350. The government keeps an extra $12,150. Per car.
Mid-range car (OMV ~$45,000, ARF ~$55,000): Old PARF at year 10: $27,500. New PARF at year 10: $2,750. Government keeps an extra $24,750. Per car.
Premium car (OMV ~$80,000, ARF ~$118,000): Old PARF at year 10: $60,000. New PARF at year 10: $5,900. Government keeps an extra $54,100. Per car.
Now multiply those numbers across roughly 50,000 new registrations a year.
One industry consultant put it bluntly: the government can pocket more of the ARF paid. It is a tax thing. And the EV rebates are the cover story that makes it palatable — for now.
I'm not saying the government is being cynical. I'm saying the incentives are perfectly aligned for them to never bring the old PARF rates back. And when the EV rebates expire, they don't need to. The new rates are already locked in. The public already accepted them. Moving on.
What This Actually Does to Your Car's Value
This is the part that should keep you up at night. Or at least make you open a spreadsheet.
Your car's floor price just fell through the floor. Paper value — the absolute minimum your car is worth at deregistration — is COE rebate plus PARF rebate. The PARF portion just shrank from "meaningful chunk of money" to "nice dinner for two." For a mass-market car at year 10, your paper value is now almost entirely your COE rebate. The ARF you paid? Gone. Write it off. It belongs to the government now.
The "scrap early" incentive got killed. Under the old rules, there was real money in deregistering before year 10. Scrap at year 5, get 75% of your ARF back. That created a natural turnover cycle — people upgraded, used cars flowed into the market, dealers had inventory. Now? Scrapping at year 5 gets you 30% instead of 75%. The gap between a 5-year-old car and a 10-year-old car's PARF value has been crushed. There's less reason to upgrade early. Fewer used cars hitting the market. Less predictable resale dynamics. The knock-on effects are going to be messy.
Pre-2026 cars just became more valuable. Quietly. Cars registered before February 2026 still sit under the old PARF schedule. A 2025 car deregistered at year 10 gets 50% of ARF back. A 2026 car gets 5%. For two identical cars, that gap could be $10,000-$15,000 in scrap value. If you're trading in a pre-2026 car and the dealer doesn't factor this in, they're either hoping you won't notice or they haven't done the math. Either way, don't let it slide.
The Uncomfortable Question
The government's rationale for the PARF cut goes like this: EVs are cleaner, so we don't need to incentivise early scrapping anymore. Less pollution means less urgency to get old cars off the road.
That logic works when EVs cost nothing in ARF because the rebates wipe it out. Of course you don't need a PARF incentive when there's no PARF to give.
But LTA has confirmed the EEAI ceases entirely from 1 January 2027. The VES has no confirmed extension past December 2027. When those programs end, EV buyers start paying full ARF. And at that point, the rationale collapses. An EV buyer in 2028 has the same need for paper value certainty as an ICE buyer today.
Will the government bring back higher PARF rates? Introduce something new to replace EEAI? Or just shrug and accept that car ownership got permanently more expensive?
There's been zero indication of any post-2027 plan. And that silence isn't an accident. Silence is what it sounds like when nobody wants to commit to giving money back.
What To Do About It
Buying an EV in 2026? Do it. Seriously. You're in the sweet spot. Stack the EEAI and VES while they exist. Your net ARF will be near zero. The PARF cut genuinely doesn't touch you this year. Just understand that when you sell in 5-7 years, your buyer won't have the same safety net. Their replacement cost will be higher. That's their problem, but it becomes your problem when it drags your resale down.
Buying an EV in 2027? The window is closing. You still get VES rebates (up to $20,000) but no EEAI. Your net ARF will be real money — not zero. The PARF cut starts to bite. Factor a near-zero PARF rebate into your 10-year ownership math and see if it still makes sense.
Buying anything in 2028 and beyond? Doesn't matter if it runs on electricity, petrol, or good intentions. Plan for your PARF rebate to be a rounding error. Your paper value at year 10 is basically just your COE rebate. Build your depreciation numbers around that reality.
Holding a pre-2026 car? Your car has embedded value that newer cars don't. The old PARF schedule is a genuine financial asset. When you walk into a dealer, know this number. A 2024-registered car returns dramatically more PARF at scrap than an identical 2026 model. If the dealer's offer doesn't reflect that, walk out. They know the math. Make sure they know you know it too.
The Big Picture
Here's what's actually happening in Singapore. The PARF cut, the COE category review, the EEAI phase-out, rising VES surcharges on ICE cars — each one gets its own news cycle. Each one is discussed as if it exists in isolation.
It doesn't. The combined effect is a structural, permanent increase in the cost of owning a car. Not a blip. Not a cycle. A reset.
The EV rebates are the spoonful of sugar. They make 2026 feel manageable. They give everyone a reason to nod along and say "the government is helping."
But the sugar runs out. The medicine — a permanent reduction in how much the government returns to you at the end of your car's life — is here to stay.
And the sooner you stop planning around the sugar, the better off you'll be.
Frequently Asked Questions
Is the PARF cut really permanent?
Yes. No sunset clause. No review date. It applies to all cars registered from the second COE bidding exercise in February 2026 onwards. There's been no indication — none — that it will be adjusted upward in the future.
Does the PARF cut affect my existing car?
No. If your car was registered before February 2026, you're on the old schedule. The 50-75% rebate rates still apply to you. This is also why pre-2026 cars now carry a quiet premium that a lot of people haven't clocked yet.
Will EV buyers always be protected from the PARF cut?
Only for as long as EV rebates keep the net ARF near zero. The EEAI ends January 2027. The VES is confirmed until end 2027 with no announced extension. After that, EV buyers pay full ARF and the low PARF rebate hits them just as hard as everyone else.
How much more does car ownership cost under the new PARF?
For a mass-market car (OMV ~$25,000): roughly $12,000-$13,000 more over 10 years. That's the PARF rebate you'll never see again. For a mid-range car: $20,000-$25,000 more. And this is on top of everything else — COE, ARF, insurance, road tax. It all stacks.
Should I rush to buy before the EV rebates expire?
If you were already planning to buy an EV, 2026 is objectively the better year. The combined EEAI + VES savings are real. But don't buy a car you don't need just to chase a rebate. That's the financial equivalent of buying something because it's on sale. The discount is meaningful, but not "reorganise your life around it" meaningful.