Car depreciation estimates how much of a vehicle’s value is consumed each year. Singapore calculations need special care because the price contains a time-limited COE and large registration taxes, while deregistration can produce statutory rebates.

The basic formula

Annual depreciation

(Purchase price − assumed value at the end) ÷ years of ownership.

The end value might be a forecast resale price, the sum of applicable rebates on an earlier deregistration date, or a conservative value near COE expiry. These are different scenarios and should not be mixed.

Scenario 1: selling before COE expiry

If a five-year-old car costs S$120,000 and is expected to sell three years later for S$78,000, the estimate is (S$120,000 − S$78,000) ÷ 3 = S$14,000 a year.

If the actual sale price is S$70,000, realised depreciation becomes about S$16,667 a year. Mileage, condition, accident history, model demand, finance conditions and future COE prices can all move the sale price.

Scenario 2: calculating to deregistration

A terminal value for deregistration may contain PARF, a rebate for unused COE and an assumed body, scrap or export amount. Only the first two are statutory LTA rebates. Keep any commercial body or export estimate visible as a separate assumption.

Use the vehicle-specific LTA enquiry for net ARF, rebate and date information. A resale-price forecast normally already incorporates the market’s view of those values, so do not add them again.

Scenario 3: keeping the car to first COE expiry

At the end of the original ten-year COE there is no unused original COE to refund. The estimated terminal amount may therefore consist of the applicable PARF rebate plus any assumed body or export value.

Assume a post-February 2026-cohort car costs S$180,000, has net ARF of S$55,000, and is kept until it is more than nine but no more than ten years old. With no body value in the model, its estimated PARF is 5% × S$55,000 = S$2,750. Straight-line depreciation is then (S$180,000 − S$2,750) ÷ 10 = S$17,725 a year.

That is a formula-based illustration, not a resale forecast. A car in the February 2023-to-first-February-2026 cohort would use its older PARF schedule. Otherwise similar cars across cohorts need not have the same market purchase or resale price.

Depreciation is not total ownership cost

Depreciation excludes loan interest, insurance, tax, fuel or charging, parking, ERP, servicing, tyres, repairs and the opportunity cost of cash. Keep these outside the depreciation formula.

Avoid double-counting finance

Adding the full loan instalment to depreciation counts principal repayment twice. For economic cost, add depreciation, loan interest and fees, then add running costs.

How to check advertised depreciation

  • Which exact purchase price and mandatory fees were used?
  • Does the calculation end at a planned resale date or COE expiry?
  • Which PARF cohort and actual net ARF apply?
  • Is unused COE included, and is a body or export value assumed?
  • Are remaining months used accurately or rounded into years?

A dealer’s annual figure is an estimate, not an LTA charge, official valuation or promise about the later sale price.

Car costs

COE renewal and PQP

Compare five- and ten-year renewals, timing rules and the costs beyond the PQP.

Primary sources

Last fact-checked: 3 September 2026. Rules, fees and official pages can change; check the linked source before acting.