For those who are uncertain about this – let me show you how you can quickly determine your LTA rebates (A.K.A how much money you can get back from LTA when you scrap your car)
First, go to this link on OneMotoring
Next, you’ll want to enter the car’s license plate and last 4 digits of the owner’s ID. Enter the intended de-registration date (if you are not sure, just put in the nearest available date).
Enter the captcha and hit submit.
If you entered the details correctly, what you see on the next page is your vehicle’s details, also known as the vehicle’s log card.
Scroll all the way to the bottom and look for Total Rebate Amount :
See it? Good. This is the amount you’ll get back when you scrap your car. This amount is made up of your PARF + COE rebate, and is also known informally as paper value.
BUT before you click out of this article, bear in mind that :
This PARF rebate only applies to PARF cars (hence the name – PARF rebate). A PARF car is a car that has not had it’s COE renewed (i.e a car that is under 10 years old).
A COE car on the other hand, is a car that has had it’s COE renewed (typically above 10 years old).
Rebate for PARF Car
As a simple example, today I buy a 2016 Mazda 3. As it’s only 2020 now, this car is about 4 years old. If i scrap the car now, I am entitled to a rebate, which consists of the PARF and COE. This is the amount circled in the image on top, called Total Rebate Amount.
Rebate for COE Car
On the other hand, let’s say today I bought a Mazda 3 that was registered in 2008. The COE for the car has been renewed (since it is now about 12 years old). If suppose I scrap the car tomorrow, I am not entitled to a PARF rebate.
I am still entitled to a rebate, however, known as the COE rebate.
This COE rebate is the unused portion of your COE that will be refunded to you by LTA. See the difference?
PARF cars are entitled to a PARF rebate AND COE Rebate.
COE cars are only entitled to a COE rebate. Once you renew your COE, you lose your PARF value.
All good so far? “Yes!”
So what do you do once you get your rebate by LTA?
You will have to pay off any outstanding loan you have on your car (if you took a loan). If the amount you owe on your car is greater than this scrap amount, then I suggest you try to sell your car instead of scrapping it.
For example, your rebate amount is $40k, but your outstanding loan is $45k. You are short of $5k.
Sell or Scrap?
By selling your car instead of scrapping it, you can fetch a higher price. Try to sell it to private buyers, not dealers if you want the highest price possible.
If the amount you get from selling/scrapping your car is greater than the loan outstanding amount – then you will get some cash in your pocket. YAY!
If not – then you’ll have to fork out money to GET RID of your car. Yes, you read that right. You pay to lose your car. In this instance, I would highly suggest you keep your car and pay the monthly installment if the amount you’ll have to fork out is huge.
Let’s take a simple example to illustrate :
I can scrap my Honda Civic for $30,000. My loan outstanding amount is $35k. I would then have to fork out $5k to get rid of my car.
What I would do then is try to sell my car instead of scrapping it because I wanna get more money for my car (who wouldn’t?)
So I go to a dealer, and he offers me $33k for my car. I’m still short of $2k (cause my outstanding loan is $35k)
I don’t wanna pay $2k to get rid of my car, so I try to sell it online on my own, or via consignment.
Consignment basically means that the dealer will help you list your car and handle the paperwork for you when you sell it to a buyer.
Meanwhile, you still own the car and can drive it around as if nothing has changed (of course, be more careful since prospective buyers can ask to view your car anytime, and why wouldn’t you take care of something you wanna sell?)
One day, a buyer approaches me and says he’ll pay me $35k for my Honda Civic. I am now a happy man because my car has broken even.
This means my car’s selling price is higher than or equal to my outstanding loan amount.
I sell my car to him for $35k, and I take that money and
go to the casino pay off my outstanding loan.
I now end up with no amount to fork out and no car. Ideally, I would want to sell my Civic for more than $35k, so that I get some $$ in my pocket to use as a downpayment for my next car… but we’ll keep this simple so you don’t get confused.
Outstanding Loan Amount vs Final Settlement Figure
Well, is that it, you ask?
NO! Because (and I learned this the hard way) – outstanding loan amount and loan final settlement figure are 2 different things. I can have an outstanding loan amount of $35k, and loan final settlement figure of $40k (or more). Why, you ask?
This is because banks or finance companies may have their final settlement fee, or whatever other gibberish fees that they charge innocent consumers like us to settle a loan early (this is actually to make up for the interest they lost).
So there you go – that is how much money you can get back when you scrap your car, and what you should take note of. Drive safe !