Cost of Driving in Singapore Hits Record High as COE Nears $100,000
By Jun Yuan Yong
Singapore's Vehicle Quota System and Soaring COE Prices
SINGAPORE, July 8(Reuters) - Car buyers in Singapore will now need to fork out almost $100,000 for a certificate to own a small car, as costs in the city-state's vehicle quota system hit an all-time high for small models on Wednesday.
How the Certificate of Entitlement (COE) System Works
Singapore regularly auctions a fixed number of "certificates of entitlement" allowing car ownership for 10 years, which helps limit the number of vehicles on the road to about 1 million.
Singapore has a population of 6.1 million people and the city-state can be traversed by car in less than an hour.
Impact on Car Ownership and Urban Mobility
The auctions have made Singapore the most expensive city in the world to buy a car.
Rising Costs and Market Dynamics
Certificates prices for small vehicles, or those with engine capacity below 1.6 litres, have quadrupled from pre-pandemic levels, with no signs of abating.
Government Response and Contributing Factors
Answering parliamentary questions in May about the rising prices, Transport Minister Jeffrey Siow said demand remained strong due to competitive electric car prices, while the availability of smaller vehicle certificates at auctions was declining.
Comparing Costs: Singapore vs. United States
The price of a certificate alone is now equivalent to the cost to buying four Toyota Corollas in the United States. The same vehicle in Singapore, with the certificate, registration fees and taxes, would cost S$179,888 ($139,000).
Affordability and Economic Impact
By comparison, the median annual household salary in the city-state is S$149,352, while a small, government-subsidised flat costs upwards of S$139,000.
Historical Trends in COE Prices
In October 2023, when certificates for larger cars crossed the $100,000 mark, those for smaller cars were about $77,500. Prices have steadily risen from $78,844 (S$102,009) at the first auction of this year.
Automaker Strategies in Response to COE System
Many carmakers detune engines of popular models for the Singapore market so their cars qualify for the cheaper certificate.
($1 = 1.2938 Singapore dollars)
(Reporting by Jun Yuan Yong; additional reporting by Xinghui Kok; Editing by Martin Petty)
