Advertisement
Singapore
This Week in AsiaEconomics

Is Singapore’s COE system due for ‘significant reforms’ as car prices reignite debate?

  • The COE car ownership system in Singapore remains a contentious issue despite recent easing from record-high premiums
  • Many proposals to revamp the system have been mooted but none of them appears to be acceptable to the authorities, transport analysts say

Reading Time:6 minutes
Why you can trust SCMP
5
Motorists enter the financial district area in Singapore. The existing COE system has added fuel to “the sense of inequity in some quarters” of society and narratives of costs of living outpacing wage increases, says one political observer. Photo: AFP
Kimberly Lim
Car prices have yet again become a hot-button issue in Singapore over the past year, as already costly car-ownership premiums surged to record six-figure highs, sparking fresh calls for the government to revisit its three-decade-old quota system to manage vehicle usage.
Advertisement

The latest decline in premiums across most categories under the certificate of entitlement (COE) system earlier this month may have eased the concerns of car owners for now but analysts are not hopeful that the issue will become less contentious.

There is no consensus on the way ahead for the COE system. Most suggestions and policy alternatives floated by industry players to manage the cost of premiums – with a permit to own a small car hitting a record high of S$106,000 (US$80,000) in October last year – do not seem palatable to the government, according to analysts, prompting one commentator to suggest the debate was becoming circular.

“The debate risks going around in circles with the same points being raised repeatedly about making the system fairer, for example, by giving preference to those who really need a car or restricting it to one per household. None of these will work because the people suggesting it want prices to come down, which they will not,” Han Fook Kwang, a veteran newspaper editor, wrote in a commentary for broadcaster CNA in September.

“If you don’t like this outcome, there is only one solution: scrap the certificate of entitlement system.”

In Singapore, every motorist or dealer who wants to own a vehicle must bid for a COE, a permit introduced in 1990 to limit the number of vehicles on the road. Each certificate is classified based on the vehicle type and is valid for 10 years. The transport authority controls the number of COEs available, announcing the quota every quarter.

Advertisement
loading
Advertisement