Reversing a rule that dates back more than three decades, the Government will allow motorists to get their scrap and COE rebates in cash when they deregister their cars from Sept 1.

The move, announced by the Land Transport Authority (LTA) on Tuesday, is to make it easier for car owners to give up their cars and switch to public transport.

Currently, motorists who scrap or export their cars before they turn 10 years old get a paper rebate, which they can use to offset taxes on a new vehicle. If they do not want to buy a new car, they would have had to sell the paper rebate to dealers, who will take it off them at a discount.

In March, Transport Minister Raymond Lim announced that the Government was reviewing if it was possible to hand out the rebates in cash - as part of a holistic approach to encourage more drivers to give up their cars for public transport.

LTA, in a statement on Tuesday, said car owners can apply to get their rebates in cash if they wish to.

Those who are happy with the current situation - largely by leaving the arrangement in the hands of dealers or motor traders - can continue to do so.

To apply for a cash refund, motorists can do so online via the one.motoring portal, or download a form (Form FR02) from the site, fill it up and mail it to the LTA.

To enable more car owners to benefit from this rule change, the LTA will extend the deadline for scrap and COE rebates which are expiring between July 1 and Sept 29 to to Sept 30.

The news is welcome by motor traders and motorists, many of whom have been asking why the Government cannot simply give cash rebates.

Mr Raymond Tang, managing director of used car trader Yong Lee Seng, said: 'It's good for the public as well as dealers who trade in these rebates.

'In the past, they can only sell the paper to car companies, who use them when they register new vehicles. Now, they can go directly to the LTA and get cash.''

Since 2003, about 80,000 passenger cars are scrapped each year before turning 10 years old. It is estimated that about $2 billion worth of rebates are dispersed a year.

From Sept 1, if every motorist wants cash instead of a paper rebate, the Government would have to set aside the same amount in cash.

.