Singapore’s COE Circus: Why Owning a Car Feels Like Rolling the Dice
Ever hear about Singapore’s Certificate of Entitlement (COE)? It’s the world’s one‑of‑a‑kind solution to keep the city‑state’s parking spots from turning into a traffic nightmare.
The “No More Cars” Gambit
Because land is as scarce as a quiet beach in summer, the government rolled out two main tools: the Vehicle Quota System (VQS) and the COE. Together, they’re the ultimate traffic police, setting a yearly cap on how many new cars can hit the streets.
Zero Growth, Zero Stress? Not Quite.
In recent years, the car‑population growth rate has been pegged at 0 %. What this means for us S‑king nationals? The only way to get a new COE is to watch an old one hit the road (i.e., deregister). The supply stays rock‑solidly low.
Demand’s Party Parade
But here’s the kicker: demand for COEs keeps on climbing. Why? More people want cars, fuel prices rise, and the dream of a “petrol‑powered chariot” still feels pretty cool.
Meet the Main Culprits in the Demand Lineup:
- Urban sprawl and a desire for personal freedom.
- Increasing federal subsidies for electric vehicles, turning every deal into a must‑have.
- Technological hype—smart cars, self‑driving… you name it.
The Price Effect: It’s Flying High
When the supply stays fixed while the demand keeps marching, the COE price spikes. Think of it like buying concert tickets when only a handful of seats remain.
Your Takeaway
So if you’re scratching your head about why getting a new car feels like a lottery, remember: Singapore’s COE is a tightly controlled game; the fewer cars you let go, the higher the prize for the ones that remain.
What are the factors that contributed to the relentless increase of COE prices?
COE Prices Are Now the Biggest Bite of Your Car Budget
Picture this: Your next car purchase isn’t just about the engine, brakes, or that slick paint job – it’s mostly about the COE (Certificate of Entitlement). In fact, for most folks, over 50 % of a new economy car’s price tag comes from this pesky little paper.
Why the COE is on a price roller‑coaster
- Vehicles for ride‑hailing and private‑hire businesses suddenly flooded the market, bumping supply down and prices up.
- High‑net‑worth individuals treated those COE bills like a rare ice‑cream scoop—irreducible anyway.
- September 2023 saw the Cat B COE hit a record $113,000—so you get what you did!
Middle‑Class Families: Feels Like a Coin‑candy Problem
For the average family, buying a car feels a bit like auditioning for a reality show where the prize is a car that’s almost as expensive as your rent.
What’s Been Hinted At to Tame the COE Beast?
Two ideas keep popping up like you’re stuck in a forever‑loop comments section:
- “One Car, One Household” – No more driving the same vehicle for multiple people. Every home gets its one license.
- Separate COE Category for Business‑Use Cars – A special ticket just for business vehicles, so the market is less crowded.
Let’s Buckle Up, Explorer Homeowners!
We’re going to pull back the curtain on each suggestion, see how realistic they are, and roost the feasibility flag on it.
‘One car, one household’ policy
Will a One‑Car‑Per‑Household Rule Really Quiet the COE Storm?
On the surface, it sounds like a ticket to calm, cheap, and fair parking. The basic idea: you can only own one car per home, freeing up the precious COE slots for families and folks who truly need a vehicle.
Why It Might Not Be a “Set‑It‑and‑Forget‑It” Fix
- “Household” is a Moving Target – In Singapore, the term means any group of two or more people sharing a roof and snacks. That could be a team of three office workers, a couple with kids, or even a multi‑family loft.
- Multiple Movers Right on the Same Profile – Two adult drivers inside a single household can still need separate rides for work, shopping, or escaping traffic jams.
- Big House Huge Even Bigger Dilemma – Multi‑family homes (think cluster apartments where two families share the same block) might squeeze in more drivers than the policy can handle.
Numbers on the Table
Here’s the kicker:
- Singaporeers live in about 1.4 million households.
- There are just under 1 million vehicles on the road.
- That means roughly 50 % more households than cars—even with a one‑car rule, many households would still rush to grab a slot.
What Happens If Everyone Bounces to Buy?
Picture a buying frenzy: families line up, friends gang up with spare cash, and suddenly the COE auction’s a circus. In reality, having a limit on the number of cars per household may not actually shrink the perceived demand—it could simply push the hunt to an even crazier party.
Bottom Line
While the one‑car‑per‑household idea sounds neat on paper, the mixed realities of household definitions and the sheer number of people mean it’s unlikely to solve the COE bottleneck—at least not without a game‑changing side‑kick.
Grouping business vehicles in a separate category
Why Business Cars Are Sneaking Into the COE Market
Ever noticed the COE (Certificate of Entitlement) prices shooting up? The culprit isn’t the coffee‑drinking commuters—it’s the private‑hire fleets that are quietly amping up the bid game.
What’s the Deal?
- For a regular driver, a car is a personal asset—just the right sedan or bike to fit their lifestyle.
- For a rental company, a car is a profit engine. They’re ready to drop big cash upfront if it means more paid mileage later.
Let’s Give Businesses Their Own Lane
Picture a special COE section just for fleet‑themed vehicles. That way, rental firms won’t have to face off against everyday folks with tighter budgets.
But Here’s the Catch
- The total number of COE slots stays the same. Splitting them for business cars means fewer slots for regular buyers.
- It could shift the balance. More slots for fleets equals fewer for the general public.
Would This Tactic Work?
If the steep rising COE prices are mainly driven by the “hot‑paced” rental bids, giving them a separate lane might level the playing field—at least when it comes to the costs for everyday car owners.
In short, carving out a for‑business COE category could help keep prices fair if the fleet’s demand is the real fuel behind the price surge.
Split the categorisation even further
How the Ferrari‑MPV COE Mix Is Messing With the Market
Ever notice how a shiny Ferrari can end up jostling for a COE with a humble family MPV? That’s how the current system works—every vehicle, no matter how outrageous or modest, ends up vying in the same pool.
The Problem With the One‑Size‑Fits‑All Pool
Picture this: you’ve got a million‑dollar super‑car, and right next to it, a budget Cat B MPV. If a bunch of people with deep pockets show up, the COE prices for Cat B can skyrocket. Suddenly, what was supposed to be an affordable family car turns into a pricey luxury.
Why Separate Categories Might Be the Answer
- Business Vehicles: These already get their own COE category, but the idea gains traction when applied to luxury cars as well.
- Ultra‑Luxury Cars: Imagine a special COE slot for cars that either cost over $100,000 in OMV or boast more than 500 bhp.
- What This Means: By creating distinct pools, normal non‑luxury cars can keep their COE prices in check, preventing the price surge that comes from high‑spending buyers in the same pool.
Taking the Cue from Business Vehicle COEs
Just like business cars have their dedicated space, so can high‑end supercars. This prep prevents an “economic cat” from being priced out by a “lifestyle superstar”.
More Details Ahead
Stay tuned on how the COE quotas might shift in the coming months—especially if you’ve read the recent COE quota to drop 14% for November 2022 to January 2023 update.
Cars. COE. Vehicles. The next step? Pinning down those categories before the market goes wild.
