Singapore, renowned for its economic prowess and urban development, has one notorious feature that continues to astonish the world – the soaring costs of car ownership. At the heart of this issue lies the Certificate of Entitlement (COE) system, a mechanism that regulates the number of vehicles on Singapore’s roads. Recent reports indicate that the COE premium for Category B has crossed the SGD 150,000 mark, reaching new highs for all car categories. These exorbitant costs are a testament to the many criticisms surrounding the COE system, which has made cars prohibitively expensive in the city-state.
The Never-Ending Climb
In the most recent COE bidding exercise, the premium for Category B, which typically includes larger and more powerful cars, breached the SGD 150,000 milestone. This marks a significant increase from the SGD 146,002 recorded in the previous tender. Open category COEs, often used for larger vehicles, also reached record highs at SGD 158,004, up from SGD 152,000, and just a month ago, the SGD 140,000 threshold was broken.
Category A cars, the smaller and less powerful vehicles with engine capacities below 1,600cc and horsepower not exceeding 130bhp, also saw premiums rise to a record high of SGD 106,000. The trend of increasing COE premiums has become a matter of great concern for potential car buyers in Singapore.
A Flawed System That Needs A Revamp
The COE system’s role in this continuous surge in car prices cannot be understated. In an attempt to address some of these concerns, the Land Transport Authority (LTA) recently announced an increase in the COE quota, with the largest increases allocated to categories A and C. While these measures aim to alleviate some of the economic pressure on car buyers, they may not be enough to address the root issues of the COE system.
As Singapore grapples with the escalating cost of car ownership, it is imperative to reassess the COE system and explore alternative solutions. Additionally, policymakers must address the rapid proliferation of private hire vehicles and their impact on road congestion and COE premiums.
Singapore should consider implementing reforms that encourage a more equitable and sustainable approach to personal transportation. This may include revising the COE system to make it more inclusive, promoting electric vehicle adoption, fostering a robust public transportation network, and implementing sensible regulations on private hire vehicles. By doing so, Singapore can ensure that everyone has the opportunity to enjoy the benefits of personal transportation without breaking the bank and address the underlying factors that contribute to the exorbitant cost of car ownerships.
