The Certificate of Entitlement (COE), instituted by the government of Singapore since May 1990, is a program designed to limit car ownership and hence the number of vehicles on the country’s roads. This system in effect requires residents to bid for the right to buy a motor vehicle, with the number of certificates deliberately restricted.
The COE allows holders to own a car for a period of 10 years, after which they must scrap or export their car with financial incentives or bid for another COE at the prevailing rate if they wish to continue using their car for a further 5 or 10 years.
Five categories of COE
Category A: Cars (1600cc & below) & Taxi
Category B: Cars (above 1600cc)
Category D: Motorcycles
Category C: Goods Vehicles and Buses
Category E: Open Category
1990 – COE introduced.
2002 – COE bidding system revised.
2010 – Government announced new formula will be used to determine the vehicle quota.
2011 – Government announced reducing car growth from the current 1.5% to 1.0% in 2012, and then to 0.5% in 2013 and 2014.
COE Trend from 2001 to 2011 (Excel)
The above showed that the price of COE may have flatten (due to Government intervention) at $60,000 for Category A cars. Looking at the $$$ collected by the Government for the PR excercise done (constant public reminder of the impending COE cuts), their objective has been met. From here forward, the price fluctuation will probably be caused by the economic outlook and moves in tandem with the Singapore stocks market. This point was confirmed by Transport Minister. In 2012, the Category A COE hovered around $60,000 to $70,000. So we should be seeing more new cars with a price tag of around $130,000 – Small diesel car from Europe or Hybrid cars from Japan?
In Jan 2013, Category A COE jumped to $92,100.
Singapore Car Ownership Lingo:
PARF Car – All new cars come with an OMV. If the vehicle is de-registered within 10 years from its first registration date, the registered owner will be entitled to a PARF Rebate. Hence the term PARF Car.
COE Car – Should an owner wish to continue using a car after 10 years, he will have to renew the COE for his car. The amount to pay will depend on the PQP. If COE is renewed, there will no longer be any PARF Rebate when you de-register the vehicle. As such, only the COE rebate will be available upon de-registering of the vehicle, thus giving raise to the name COE Car.
Singapore Car Ownership Abbreviations:
OMV – Open Market Value.
PARF – Preferential Additional Registration Fee.
PQP – Prevailing Quota Premium.
Update: From 1 January 2013, the special tax for diesel cars that are compliant with the Euro V standard will be reduced from $1.25 to S$0.40 per cubic cm of engine capacity.