Singapore has seen the cost of obtaining a certificate for owning a large family car soar to a new record high of S$146,002 ($106,619; £87,684). This certificate, known as the Certificate of Entitlement (COE), is a prerequisite for purchasing a vehicle in the city-state. The COEs are sold through auctions held every two weeks, and the government tightly controls the number of certificates available. Singapore‘s unique system, coupled with taxes and import duties, has made it the world’s most expensive country to buy a car.
The COE system
Singapore introduced the 10-year COE system in 1990 as a measure to combat congestion on its roads. Under this system, prospective car owners must secure a COE before they can buy a vehicle. The system divides COEs into various categories for different types of vehicles, including smaller cars, motorcycles, and commercial vehicles.
COE prices have been breaking records for several consecutive months, driven by a post-pandemic recovery that has increased demand. Additionally, the government plans to reduce rebates for COEs next year, adding to the price surge. The lowest-priced COE for a car now stands at S$104,000, nearly tripling since 2020 when the pandemic resulted in reduced demand for new cars. The “Open” category, which allows flexibility in the type of cars it can be used for, also reached a record high of S$152,000.
To illustrate the high cost, a standard Toyota Camry Hybrid in Singapore costs approximately S$250,000, which includes the cost of a COE and taxes. This price tag is nearly six times higher than what the same car would cost in the United States. For the average Singaporean with an annual salary of about S$70,000, the COE system presents a significant barrier to car ownership.
Emphasis on public transport
The Singaporean government actively encourages residents to use the country’s highly regarded public transportation system, consistently ranked as one of the world’s best. In the previous year, the government allocated over S$60 billion to expand and modernize the country’s rail network over the next decade. With its population of around 5.5 million, Singapore had just under 1 million private cars on its roads at the end of the previous year. The availability of new COEs depends on the number of older cars that are taken off the road.
Singapore’s COE system has made the cost of owning a family car reach unprecedented levels, making it a challenging endeavor for ordinary citizens. The government’s emphasis on public transportation and investments in improving the infrastructure reflect its commitment to address congestion and promote alternative mobility solutions.