Budget 2026 cut PARF rebates by 45 points. Cars already on the road kept the old deal.
The rebate on a new registration now returns 5% of ARF at the ten year mark instead of 50%. Anything registered before 13 February 2026 is untouched, which quietly changed the maths between buying new and buying used.
Most of the coverage after Budget 2026 focused on the PARF cap being halved from $60,000 to $30,000. That is the smaller half of the story. The rebate percentages themselves were cut by 45 percentage points at every single age tier, and for the majority of cars that is a far bigger number than the cap ever was.
Here is the schedule, straight from LTA.
| Age at deregistration | Old rebate | New rebate |
|---|---|---|
| Not more than 5 years | 75% of ARF | 30% of ARF |
| Above 5 to 6 years | 70% of ARF | 25% of ARF |
| Above 6 to 7 years | 65% of ARF | 20% of ARF |
| Above 7 to 8 years | 60% of ARF | 15% of ARF |
| Above 8 to 9 years | 55% of ARF | 10% of ARF |
| Above 9 to 10 years | 50% of ARF | 5% of ARF |
| Rebate cap | $60,000 | $30,000 |
The tier that matters most to ordinary owners is the last one. Run a car to the end of its ten year COE and you used to get half your ARF back. Now you get a twentieth.
Who this applies to
This is the part worth being precise about, because it decides whether the change affects you at all.
The revised schedule applies to cars registered with COEs obtained from the second bidding exercise of February 2026 onwards. For cars that do not need a COE to register, such as taxis and COE-exempt cars, it applies to those registered on or after 13 February 2026.
Everything already on the road keeps the old schedule for the rest of its life.
A car registered in 2021 will still return 50% of its ARF when it is deregistered in 2031. That entitlement travels with the car, not with the owner.
So if you buy a used car registered before the cutoff, you inherit the old rebate. Nothing about the transfer resets it.
What it costs on a real car
Take a car with an ARF of $50,000, which is roughly a mid-range continental or a well-specified Japanese model.
| Registered 2021 | Registered mid 2026 | |
|---|---|---|
| ARF paid | $50,000 | $50,000 |
| Rebate at 10 years | 50% | 5% |
| Cash back on deregistration | $25,000 | $2,500 |
Same car, same ARF, twenty two and a half thousand dollars of difference in what comes back at the end. Spread across a ten year COE that is roughly $2,250 a year of additional cost that simply did not exist for the older registration.
For a car with a smaller ARF the absolute gap narrows, but the proportion does not. Five percent instead of fifty is a nine tenths reduction whichever car you apply it to.
Why this makes used cars look different
The usual argument for buying new is that you get full warranty, no history, and a clean ten years ahead of you. The usual argument against is depreciation. That trade has been reasonably balanced for years.
The rebate cut moves it. A new registration now carries an end-of-life value that is a fraction of what the same car would have returned twelve months ago, and that shortfall lands entirely on whoever holds the car at deregistration.
A used car registered before February 2026 does not carry that shortfall. It is running on the old schedule and will keep running on it until the day it is deregistered.
That does not automatically make used the better buy. A new car still comes with a manufacturer warranty and no unknown history, and those are worth real money. But the gap between the two options narrowed, and anyone comparing them on total cost of ownership should be running the numbers again rather than relying on what was true last year.
The things people get wrong about PARF
PARF is not the same as your COE rebate. Deregister early and you get both, a PARF rebate based on ARF paid, and a separate pro-rated COE rebate for the unused portion of your certificate. They are calculated differently and people routinely confuse them.
PARF is a percentage of ARF, not of what you paid for the car. ARF is the tax charged at registration, calculated off OMV. Two cars with the same showroom price can have very different ARF figures and therefore very different rebates.
Past ten years there is no PARF at all. Renew the COE and the PARF entitlement is gone permanently. That is the actual decision point at the ten year mark, and it is why COE cars sell for so much less than PARF cars of a similar model.
EVs were already low. After the EV Early Adoption Incentive and VES rebates, most EVs carry a low ARF to begin with, so their PARF was never large. The cut affects them least in absolute terms.
What to check before you buy
If a car's rebate matters to your plan, and it should if you intend to run it to the end, confirm two things.
- The registration date, which tells you which schedule applies.
- The ARF paid at registration, which is what the percentage is applied to. This is on the vehicle log and any dealer should produce it without hesitation.
From there the arithmetic is simple. Age at deregistration gives you the percentage, the percentage applied to ARF gives you the rebate, and the cap only bites on high-ARF cars.
If someone quotes you a PARF figure without telling you the ARF it came from, they are quoting you a number they cannot show their working for.
The rules changed in February. The cars did not. Knowing which schedule a specific car sits on is now part of working out what it is actually worth.
Looking at something specific?
Send me the car and I will run these numbers on it before you commit to anything.