SINGAPORE: In Singapore, the dream of owning a family car has become increasingly costly, as the cost of a certificate of entitlement (COE) has surged to a new pinnacle of S$146,002 ($106,619; £87,684).
The city-state implemented the 10-year COE system back in 1990 as a proactive measure to combat traffic congestion, shaping the automobile landscape within the nation.
To become a car owner in Singapore, prospective buyers must secure a COE through a rigorous auction system, conducted every two weeks, where the government meticulously manages the number of certificates available for sale. This structured approach, coupled with taxes and import duties, has cemented Singapore’s position as the most expensive country in the world to purchase a car. For instance, a standard Toyota Camry Hybrid in Singapore costs approximately S$250,000, encompassing the COE cost and taxes, rendering it six times more expensive than in the United States.
The COE system accommodates various types tailored for smaller cars, motorcycles, and commercial vehicles. Recent months have witnessed COE prices hitting unprecedented highs, partly fueled by a post-pandemic economic rebound that stimulated a surge in demand. Anticipating this, the government plans to reduce rebates for these certificates next year, further intensifying the current market dynamics.
The lowest COE price for a car has escalated to S$104,000, nearly tripling since 2020, a testament to the growing demand for new cars. Concurrently, the “Open” category, unrestricted in terms of vehicle usage, has reached a record high of S$152,000. Alice Chang, a representative from Toyota Borneo Motors, noted the surge in COE costs is a consequence of robust demand, particularly for luxury cars, which sees eager buyers lining up outside showrooms.
Singapore, despite its relatively small size, boasts a significant number of millionaires. However, for the average Singaporean earning around S$70,000 annually, affording a car proves challenging. The government actively promotes the use of the city’s exceptional public transport system, consistently ranked among the best globally. In 2022, the government allocated over S$60 billion towards expanding and modernizing the country’s rail network over the coming decade.
As of the end of the previous year, Singapore, with its population of approximately 5.5 million, had just under 1 million private cars on its roads. The availability of new COEs hinges on the rate at which older cars are phased out, further shaping the trajectory of Singapore’s automotive landscape. The ever-rising costs of car ownership underscore the challenges faced by individuals in their pursuit of personal vehicle ownership in this prosperous yet compact city-state.
