Why today’s unfashionable petrol car still makes sense

SINGAPORE – The concerted efforts to get consumers to give up their internal combustion engine (ICE) cars for electric ones are seriously bearing fruit.

Electric vehicles (EVs) accounted for almost 60 per cent of the 13,322 new cars registered in the first three months of 2026, outnumbering combustion engine and hybrid models for the first time in Singapore.

Rewind to 2022, and EVs accounted for a mere 11.7 per cent of new car registrations. That was the first year that the Land Transport Authority made EVs a distinct vehicle type in its published data, separating them from hybrids – a clear signal of Singapore’s electric ambitions.

We know what is driving this wave.

Generous tax rebates offset the upfront costs of EVs, while mounting surcharges hit ICE and hybrid models hard. Financially, going electric now feels like the default choice.

The products themselves are rather appealing too. Even the most basic of mass-market EVs offers a quieter and punchier drive than many higher-end ICE cars from just a few years ago. They are also packed with plenty of premium features, ranging from massage seats to panoramic glass roofs, all while dealers market them aggressively to excite buyers.

When it comes to chargers, EV drivers in Singapore are well-provided for, with one charger available for just under two EVs.

Broadly speaking, a charger can easily serve more than two EVs a day and the charging network is still growing. While Singapore is not at the stage of having a charging point at every corner, one is likely just a very short drive away.

Against this backdrop, making a case for a conventional, non-EV feels like a fool’s errand. But hear me out.

Those who resist going electric really just want peace of mind. With petrol and hybrid cars, there is no doubt about whether they will last or if there are workshops that can repair them, should things go wrong.

The cost for having non-EVs certainly is rising, most recently with the cut to the preferential additional registration fee (PARF) rebate announced at Budget 2026. This changed the calculation for car buyers working out their total cost of ownership.

When cars are taken off the road in their 10th year, those registered from Feb 20 claw back a smaller fraction of the taxes paid upfront than cars registered before the revision. This impacts all types of cars, but ICE and hybrids are hit harder because they are subjected to higher taxes paid than EVs during registration.

Take the Toyota Corolla Altis 1.6 as an example. Register one today and it qualifies for slightly over $950 in PARF rebate when its certificate of entitlement (COE) expires in 2036. If the same car had been registered before the February deadline, the payout would be more than $9,500.

Meanwhile, with the high tax rebates upfront, some popular mass-market EVs like the BYD Seal 6 and MG S5 would have not been subjected to any additional registration fee (ARF) at all – meaning they had no PARF rebate to lose.

But while policy has slashed values on paper, the market reality for non-EVs is another matter.

When a car hits its 10th year, owners do not have to drive straight to the scrapyard to cash out their PARF rebate. Instead, exporters and dealers come into play, offering a premium over the PARF rebate, what the trade calls “body value”.

Like resale Housing Board flats, the body value is determined by market dynamics.

Dealers not only eye the local resale market for buyers hunting for used cars with renewed COEs, but they also consider how much the cars can fetch in the global export market. It is an industry that has existed for decades, and Singapore’s used right-hand-drive cars end up in far-flung places, from Kenya to Sri Lanka.

Among mainstream cars, Japanese models are most in demand, especially the conventional petrol versions.

Trade contacts said over the past week that a 10-year-old Toyota Corolla Altis can fetch between $2,500 and $3,000 abroad. A Honda Civic commands a bit more than that. Have a Japanese sport utility vehicle? Oh, overseas buyers just cannot get enough of those.

While the values fluctuate, exporters believe that such cars, with their reputation for solid reliability and ease of maintenance, will always be worth something overseas. Bear in mind that these cars would be sold abroad without any manufacturer-backed warranty or service support.

So, even though the non-EV you buy today may not be worth very much in PARF rebate after 10 years, there is real resale value in the global market.

On the other hand, some less-common – typically European – models can be worth a lot less in the export market. Meanwhile, high-mileage, former private-hire cars are usually fit only for the crusher.

Now, today’s hyped EVs might well be worth exporting to Tanzania 10 years down the road, but quite a few things must fall into place for that to happen.

For one thing, these EVs have to convince the global second-hand trade that their technology and batteries are robust enough for a useful second life abroad after serving in Singapore.

These developing nations will also need to rapidly scale up their own EV ambitions to stoke demand.

As is happening around the world, Chinese manufacturers are only too ready to offer ultra-affordable models. Why would drivers want a used EV from Singapore, unless it is significantly cheaper to buy?

Short of these countries banning used ICE cars entirely, the reality is that for buyers in Singapore, the unfashionable petrol-powered car today may still be worth something when its COE expires.