Want to replace your existing commercial vehicle with a new one, and get incentives for it?

With the Adjusted Early Turnover Scheme (ETS) that was announced earlier this year, it seems that you really can have your cake and eat it.

This reworked initiative, which is currently ongoing till March 31, 2025, is designed to attract owners of existing Euro II, III, and IV Category C diesel vehicles. And if you happen to own any one of these vehicles, a discounted Prevailing Quota Premium (PQP) is applied on a more eco-friendly replacement, which means you no longer have to bid on a new COE when you're shopping for a new ride.

Consequently, any existing COE rebate from your older vehicle will be transferred to the new vehicle's COE value.

How do I benefit from this Adjusted Early Turnover Scheme?

Under this Adjusted ETS system, you get to enjoy the highest incentives when you change to a new Light Commercial Vehicle — otherwise know as LCV — without tailpipe emissions. This also means that if you choose one with tailpipe emissions, the incentives given are lower.

According to the Land Transport Authority (LTA), eligible existing vehicles should fit the following criteria:

1. a Category C vehicle,
2. not COE-exempted,
3. ropelled by diesel, diesel-Compressed Natural Gas (CNG) or diesel-electric engines,
4. under the permanent ownership of the registered owner,
5. registered between Jan 1, 2001 and Dec 31, 2013, and deregistered between April 1, 2023 and March 31, 2025,
6. roperly disposed of (i.e. scrapped or exported) before the replacement vehicle is registered, and COE rebate, if any, is successfully granted,
7. have at least one day of unused COE or at least one day of its 20-year lifespan remaining when it is deregistered;

Replacement vehicles share Points 1 and 2 as described above, plus the following:

1. a vehicle that meets Euro VI or equivalent emission standards,
2. classified as Band A or Band B, if it is covered by the CVES (if the replacement vehicle is classified as Band C, it is not eligible to be registered under the Adjusted ETS),
3. registered under the same owner as the existing vehicle,
4. registered within one month of the deregistration date of the existing vehicle;

Additionally, the LTA states that the last day to deregister is March 31, 2025. A replacement vehicle must be registered by April 30, 2025, in order for you to enjoy the benefits.

And how is the Prevailing Quota Premium (PQP) calculated?

By going through with the Adjusted ETS, you stand to benefit from a discounted PQP. But how exactly is that calculated? Get ready to put your thinking cap on, because it's about to get very mathematical up in here.

The formula is as follows:

PQP at registration/10 years x (10 years — Remaining unused COE of existing vehicle at deregistration if any — per cent of remaining 20-year lifespan of existing vehicle at deregistration if any)

To illustrate this, here is an example from OneMotoring:

Details of existing vehicle at deregistration:

Remaining unused COE period = Sept 1, 2023 to Aug 31, 2026  = 3 years 

Remaining 20-year lifespan = Sept 1, 2023 to Aug 31, 2026  = 3 years

Bonus COE period: 40 per cent

And if we follow the formula shown above the example,

Discounted PQP payable for replacement vehicle at registration: 

= $30,000/10 x [10 - 3 - (40 per cent x 3)] OR $30,000 x 10 per cent; whichever is higher

= $3,000 x [10 - 3 - 1.2] OR $30,000 x 10 per cent; whichever is higher

= $3,000 x 5.8 OR $30,000 x 10 per cent; whichever is higher

= $17,400 OR $30,000 x 10 per cent; whichever is higher

= $17,400

Value of the 10-year COE of the replacement vehicle after registration:

= Discounted PQP paid at registration of replacement vehicle + COE rebate of existing vehicle at deregistration

= $17,400 + (3/10) x $8,000

= $17,400 + $2,400

= $19,800

Under the CVES scheme for registering a Band A LCV, the vehicle owner would also qualify for a CVES incentive of $15,000.

That's a lot of math! Is there an easier way of crunching the numbers?

Unless you've been religiously hitting those Ten-Year-Series Math books well beyond your schooling years, you're not expected to memorise this needlessly complicated formula by heart. 

Which is why there's a useful calculator available on the OneMotoring site here, making the process a lot less troublesome. You are only required to key in the owner and vehicle details, and ensure that you meet all set criteria for both your existing commercial vehicle and its replacement.

Conclusion

And now, you are equipped with a better understanding of how the Adjusted ETS system works, and how you can stand to benefit from it not just from a financial sense, but also knowing that you're doing your part to create a cleaner, more eco-friendly motoring society here! 

ALSO READ: Lower COE premiums incoming? More quotas to be made available from August to October

This article was first published in Motorist.