The Unique Situation of COE Singapore

Singapore is a small country and so if the popular of cars increase without measures, things can be serious. That is why cars in Singapore needs to be regulated in order to prevent overcrowding of cars and pollution. That is why Singapore decides to implement the Certificate of Entitlement, commonly known as “COE”. With a COE, a person is allow to own a car for up to 10 years.

COE Singapore

COE in Singapore has only one goal: To control the population of cars in Singapore. The government doesn’t want everybody to buy a car just to choke up the streets and expressways. As such COE has to be implemented and so far it seems like a good control being done.

As mentioned, when you have a COE, the certificate gives you the legal right to own and drive a car, up to a period of 10 years. After the 10 years period, you can have the option to renew the COE for another 10 years, or minimum 5 more years. The amount to renew is dependent on the prevailing COE prices when you want to renew.

COEs are categorised, and there are 5 different categories. All vehicles in Singapore, from motorcycles to taxis, from saloon cars to buses or lorries, will fall under these:

  • Category A – Cars with engine capacity of 1600 CC and below
  • Category B – Cars with engine capacity exceeding 1600 CC
  • Category C – Goods carrying vehicles and buses
  • Category D – Motorcycles
  • Category E – This is an “open category” COE, which can be used for all of the above.

COEs are also given in the limited amount. The number of COEs to be given is determined by the Vechicale Quota System (VQS). This number if given by the authority about twice a year.

COE is obtained based on bidding system: The highest bidding price gets the certificate. Due to this reason, the cars are allocated based on supply and demand: if the demand is higher than supply, COE bidding prices goes up.

Do you want to look at the latest COE price? Here it is at OneMotoring.

So how does the bidding process works? Here’s what I understand so far:

  1. The bidders will go to the official COE bidding system at the LTA website. You have to put in the reserve price for the COE that you want.
  2. The system will look the current current bidding and will increase the Current COE Price (CCP) upwards by $1.
  3. When the CCP is more than the bidder’s reserve price, the bidder will not be able to get his COE.
  4. CCP will keep on increasing. It will only stop when the total number of bidders is the same with the number of available COEs for that period.
  5. When the bidding ends, if the bidder is still in the bid, he gets the COE.

The latest CCP (whatever dollar amount it ends on) is called the quota premium (QP).

How high has the COE price been to? Well, the prices of COE has gone as high as $80,000! On the flip side, COE has also reach as low as $2. (Wait, I’ll explain…)

Yes, it is possible that you buy a small car priced at $25,000, and you pay a COE bidding price of $50,000! We have also heard of a unique situation where the demand is so low, there is a man who put in a $1 bid for COE…. and wins it. Of course, this is a rare situation and never to repeat again.

Whether COE Singapore system is a useful tool to allocate cars is yet to be seen. However, it is a tool that Singapore is using to ensure the population of cars. You can find out more about COE and the information at this website here.

Criticism of COE Singapore System

  • COE is not a fair system as it’s not distributed base on needs, but wants. The system favors the wealthy to own more cars and it will neglect the needs of the middle class. For example, a BMW may cost $120,000 and the COE price is at $50,000, the owner pays about 40% extra. However, a Honda City may cost about $40,000 and if the COE price is at $50,000, the owner have to pay 110% extra.
  • As COE is an across board system, businesses that rely on vehicles will get affected a lot. It’s not cheap for a business to pay $80,000+ just to get a van or a lorry, not to mention a fleet of them.

Yes, the system is not perfect, but that’s the way it is so far for the past 20 years. However, there are news that the government may move to “pay as you use” system, which may help distribute the cars evenly. Let’s see what will happen in the next few years.

COE Singapore Quota

COE Prices Singapore

COE Singapore Bidding Process

COE Renewal in Singapore