Singapore's Car Ownership Dream Shattered as COE Prices Skyrocket to Unprecedented Records

The dream of owning a car in Singapore just got significantly more expensive, with the latest Certificate of Entitlement (COE) bidding exercise on October 4, 2023, delivering a staggering blow to prospective vehicle owners. Premiums have not just risen; they've shattered previous records across multiple key categories, painting a stark picture of an increasingly unaffordable automotive landscape in the Lion City.

Category A, designated for smaller, less powerful cars, surged past the six-figure mark, settling at an eye-watering S$106,001.

This marks a significant leap from the S$101,001 recorded in the previous tender. For those aspiring to own larger, more powerful vehicles, Category B saw an even more dramatic climb, with premiums soaring to an unprecedented S$146,002, a substantial increase from S$140,889. Even commercial vehicle owners weren't spared, as Category C for goods vehicles and buses hit a new high of S$85,999, up from S$80,100.

These exorbitant figures are a clear indicator of the intense competition for the limited number of COEs available.

Singapore operates under a stringent Vehicle Quota System (VQS) designed to control the growth of the vehicle population in a land-scarce nation. Under this system, the supply of COEs is determined by the number of vehicle deregistrations over a specified period. When fewer vehicles are deregistered, the COE quota shrinks, intensifying demand and driving prices skyward.

The latest results reflect a confluence of factors, including robust demand from individuals and businesses, coupled with a tight supply.

While some might point to an improving economic outlook fueling demand, the underlying structural issues of limited supply play a more dominant role in these relentless price hikes. For many Singaporeans, the cost of car ownership is now not just a significant investment, but a luxury increasingly out of reach, pushing them towards public transport or ride-hailing services.

This relentless upward trajectory in COE prices poses a serious challenge to the government’s efforts to ensure transport affordability.

It also raises questions about the long-term sustainability of car ownership for the average citizen. As premiums continue their climb, the dream of parking a personal vehicle in one’s driveway transforms from an aspiration into an increasingly elusive fantasy, reshaping urban mobility and personal finance in profound ways.