The Land Transport Authority (LTA) has announced on Friday, April 21st that the COE quota for the months of May to July will be 9,575. This represents a 1.5% increase from the previous quarter's 9,437 COEs.

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As a potential car buyer in Singapore, understanding the Certificate of Entitlement (COE) system is crucial in making an informed decision. In this blog, we will delve deeper into the COE system, and explore how it works, the costs involved, and other relevant information that can help you make a well-informed decision about buying a car in Singapore.

What is COE?

The Certificate of Entitlement (COE) is a permit that grants vehicle owners in Singapore the right to own and operate a vehicle on the road for a period of 10 years. The COE system was implemented in 1990 to regulate the number of vehicles on the road and control traffic congestion. COE prices are determined by the demand and supply for vehicles, and the bidding process takes place every month. The COE system is divided into five categories, and each successful bidder is awarded a COE for a period of 10 years. After the initial 10-year period, vehicle owners can renew their COE for another 5 or 10 years.

How does COE work?

The Certificate of Entitlement (COE) system in Singapore is a bidding process where potential vehicle buyers bid for the right to own and operate a vehicle on Singapore's roads for a period of 10 years. The bidding process takes place every month and is divided into five categories, namely Category A for cars up to 1600cc and 97kW, Category B for cars above 1600cc or 97kW, Category C for goods vehicles and buses, Category D for motorcycles, and Category E for vehicles that do not fit into any of the other categories.

Interested buyers can participate in the bidding process by placing a bid for their desired category. The bidding process is conducted online, and bidders can place multiple bids for each category during the bidding period. The highest bidder for each category will be awarded the COE for a period of 10 years, and the successful bidders are required to pay the bid price, which is the amount they bid for the COE.

The COE prices are determined by the demand and supply for vehicles in each category, and the prices can fluctuate quite significantly over time. If the demand for vehicles in a particular category is high, the COE prices for that category will increase, and vice versa. The COE prices for each category are updated on a monthly basis and can be checked on the Land Transport Authority (LTA) website.

After the COE is awarded, the successful bidder has up to six months to register and use the vehicle. The COE is valid for a period of 10 years from the date of registration. Vehicle owners who choose not to renew their COE after the initial 10-year period must deregister their vehicle and dispose of it. The COE system is a crucial part of vehicle ownership in Singapore, and understanding how it works is essential for anyone considering purchasing a vehicle. It is important to keep track of the latest COE prices and to consider all the associated costs before making a decision.

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COE Prices

The prices for COE in Singapore are determined by the demand and supply for vehicles. If the demand for vehicles is high, then the COE prices will go up, and vice versa. The prices for COE can fluctuate quite significantly, and it is not uncommon for prices to double or triple within a short period of time. As of April 2023, the COE prices for each category are as follows:

Category A: $41,106

Category B: $48,008

Category C: $34,306

Category D: $6,459

Category E: $47,001

In addition to the COE, there are other costs involved in purchasing a car in Singapore. These include the Additional Registration Fee (ARF), the Goods and Services Tax (GST), and the dealer's commission, among others.

COE Renewal

In Singapore, the Certificate of Entitlement (COE) allows vehicle owners to operate their vehicle on the road for a period of 10 years. At the end of this period, the COE must be renewed for the vehicle to continue to be used on the road.

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 Here is how COE renewal works in Singapore:​

Eligibility

Vehicle owners are eligible to renew their COE if the vehicle is less than 20 years old, and the current COE has expired or is due to expire soon.

Renewal period

Vehicle owners can renew their COE for a period of either 5 or 10 years, starting from the date of expiry of the existing COE.

Renewal process

To renew their COE, vehicle owners can either participate in the open bidding process or opt for the Prevailing Quota Premium (PQP) option. The PQP is the average of the COE prices from the past three months and is a fixed amount that is announced on a quarterly basis.

Bidding process

If vehicle owners choose to participate in the open bidding process, they must submit their bids for the COE in their respective categories during the designated bidding period. The highest bidder will be awarded the COE for their respective category.

PQP option

If vehicle owners choose the PQP option, they must pay the prevailing quota premium at the time of renewal. The PQP rate is fixed for three months and is based on the average COE prices in the previous three months.

Payment and registration

Once the COE is successfully renewed, vehicle owners must pay the renewal fee and additional fees, such as road tax and insurance. After payment is made, the vehicle owner can proceed to register the renewed COE with the Land Transport Authority (LTA).

Other considerations

In addition to the renewal fee, vehicle owners may also need to bear the cost of any necessary repairs or upgrades to the vehicle to ensure that it meets the current roadworthiness standards.

Factors to Consider

When considering buying a car in Singapore, it is important to take into account the COE prices and the other associated costs. It is also important to consider the intended usage of the vehicle and the frequency of use. If the vehicle is only required for occasional use, it may be more cost-effective to rent a car or use a ride-hailing service.

Conclusion

The COE system in Singapore is an integral part of the vehicle ownership process, and it is essential to understand how it works and the costs involved. As a potential car buyer in Singapore, it is important to keep track of the latest COE prices and to consider all the associated costs before making a decision. With this knowledge, you can make an informed decision about buying a car in Singapore that meets your needs and fits your budget.