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When it comes to scrapping your car, the top question that you will contemplate would naturally be how much do you get for scrapping a car? This answer varies depending on variables such as your car’s model, its age, the dealer you choose, the duration left on your COE and a few others.
While we won’t be able to give you an exact formula for determining how much you will be getting, this article lays out the factors that are considered in determining the compensation that you will receive.
The dealers set the price
Car scrap dealers offer you a sum of money in order to purchase your car’s body from you. As such, they will make an offer that you can choose to accept or reject. How is the value of this offer determined? Each dealer will likely have his or her own methodology for finding the offered value. Nonetheless, there are two factors that are commonly used amongst dealers.
Firstly, a dealer would look at the mileage and age of your car. The longer that it has been driven, the more likely that wear and tear has taken place. Like a typical asset, wear and tear causes a depreciation in your car’s value. In turn dealers will be less inclined to offer you a good price for your car.
Since the condition of your car is a factor, you could weigh the possibility of replacing parts of your car before selling it. However, this is a risky action as you may end up spending more than you receive in return.
Rebates are also available
In Singapore, when you scrap your car, other than getting an offer from the dealer, you will also receive rebates from the authorities. This comes in the form of the COE rebate and PARF rebate.
Remember how you first purchased a COE or Certificate of Entitlement prior to owning your car. The COE would have given you the legal right to driving your car on Singapore’s roads. Should you be pre-maturely scrapping your car and in the process terminating your COE, you do get to claim the value of the remaining time on it. As such, the earlier you scrap your car, the higher the COE rebate you will receive.
The PARF rebate is given to car owners who choose to scrap their cars within the first COE term. It is used as an incentive for Singapore car owners to scrap their car early instead of renewing the COE and holding on to their older cars. This keeps the average vehicle lifespan on the road down while also helping to stimulate the local economy.
Putting it all together
By combining the rebates together with the sum offered by the car dealer, you would find the overall financial compensation that you can expect to receive from scrapping your car.