Record high COE premiums sparks debate over system efficacy and affordability for masses

Following the revelation by the Land Transport Authority (LTA) of a reinforced COE pool for the November 2023 to January 2024 period, which marks a robust 13 per cent increase from the preceding quarter, translating to 12,774 new COEs, the sudden surge in premiums has sparked widespread concern.

This expansion, set to take effect from 6 November, encompasses all categories, with Categories A and C experiencing the most significant growth.

Category A, specifically, saw a remarkable 22 per cent surge, resulting in a total of 4,967 COEs, facilitated in part by the advanced deregistration of specific vehicles.

Similarly, Category C witnessed a substantial 35 per cent increase, with the new quota set at 924. Even the quotas for Category B and motorcycles (Category D) received a boost, rising to 2,937 and 3,105, respectively.

These developments, particularly the significant quota increases for Categories A and C, underscore the government’s proactive measures to balance supply with the escalating demand.

Debate ignited over effectiveness of measures as COE premiums persistently climb

Despite these interventions, the relentless increase in COE premiums has triggered intense debate among industry observers and the general public regarding the effectiveness and impact of these measures on overall vehicle affordability.

Notably, in Singapore mainstream media such as The Straits Times and CNA‘s Facebook posts, Facebook users have expressed their concerns about the surge.

Some believe that the current COE system has failed to cope with the imminent price surge, prompting calls for a revamp or the introduction of a new system.

For instance, one netizen emphasized the need for an alternative approach, highlighting that the current situation cannot be sustained.

Another netizen raised the question of why not restrict each family to one car and increase charges accordingly. The comment criticized the government for seemingly prioritizing profit over solutions to reduce the number of vehicles on the road.

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A comment raised concerns about the possibility of Private Hire Vehicle (PHV) companies continuously bidding for more cars to expand their businesses.

Netizens assert that blending commercial and private bidding aggravates price surges

Some netizens highlighted the issue of the current system merging commercial and private bidding, which inevitably leads to a surge in prices.

A comment specifically pointed out that car rental and Private Hire Vehicle (PHV) companies, such as Get Go, Grab, Gojek, and others, continue to bid for higher prices and transfer the cost burden to consumers.

He urged the government to take action, emphasizing the necessity of decoupling COE from commercial businesses and advocating for a fundamental change in the current model.

Echoing the same sentiment, another individual questioned the absence of a separate pool to accommodate the bidding of commercial companies for such vehicles and emphasized the need for a distinct framework tailored to their requirements.

Increase in COE quota won’t alleviate price surge, notes netizen critique

A netizen expressed the opinion that the increase in COE supply will inevitably lead to a surge in prices.

Criticizing the decision-makers at LTA, the comment emphasized the failure to account for the existing backlog of demands and the pressure on dealers to be aggressive in generating sales revenue, often at the cost of their own profitability.

Call for implementation of a 3-year minimum usage period before vehicles can enter PHV and rental businesses