What is COE (Certificate of Entitlement) in Singapore?
Certificate of Entitlement or COE is a system in Singapore, which allows people to own and use vehicles, for 10 years, through a system of “quota license”.
This system was implemented by the Singapore Government on May 1, 1990. The main purpose of implementation was to control the number of vehicles in a household and also, on the road. With limited land resources in Singapore, a vast volume of vehicles has the potential to cause grid-locks. For strict control on vehicle ownership and usage, a proper system needs to be implemented. This was the basic reason for implementing this system of COE.
Singapore is a naturally beautiful country with a lot of biodiversity spots and UNESCO World Heritage Spots. With the use of a large number of vehicles, environmental concerns such as pollution is a big threat to beautiful Singapore. There is awareness about environmental concerns on land transport. The vehicle ownership control was based on the research about fiscal and market-based measures.
COEs are categorized into several sections. The COEs are fixed by the Singapore government and the vehicle price is determined by the market (Vehicle Quota Service [VQS]).
These are the categories of COE:
✓ A – Small and medium cars.
✓ B – Big and luxury cars.
✓ C – Buses & goods vehicles.
✓ D – Motorcycles
✓ E – Open category, which could be used in any category.
After the 10 years, COE could be de-registered. The vehicle owners will get a COE rebate based on an unused length of time.
The Singapore government keeps control of the vehicle population through COE.
How much does COE cost in Singapore?
To own a vehicle in Singapore, the following formula on finances is looked upon:
Vehicle Cost = Open Market Value + Import Duty + Good & Service Tax + Registration fees + Additional Registration Fees + Certificate of Entitlement + Annual Road Tax.
Anyone who wishes to register for a new vehicle in Singapore must first obtain a Certificate of Entitlement (COE). A COE represents a right to vehicle ownership and use of the limited road space for 10 years. Eg. The COE cost of latest CEO bidding, is as follows:-
Open - All
Purpose of COE (Certificate of Entitlement)
The main purpose of COE, as mentioned, is to control road congestion in Singapore. Also, the Singapore government is able to monitor the number of vehicles on the road. Although vehicle ownership does not correspond with its usage, speculation can be done by the government about the same. The COE system helps in minimizing pollution by vehicles, reducing traffic jams and saving considerable travel time, resulting in fewer accidents on the road. Streamlining of vehicle usage and efficiency is achieved via the COE system.
Certificate of Entitlement is a bidding process, a vehicle owner has to take part in before acquiring a vehicle. This bidding process is done on the first and third Monday of every month. Once the COE is obtained, the vehicle is registered in the name of the bidder. The COEs other than Category C and Category E is not transferrable.
After the tenure of 10 years, there are two options, the owner of the vehicle can decide on.
De-register the car and send it to the scrapyard or export the car to countries that employ right-hand driving, such as Japan, and India to name a few.
The second option would be to extend the tenure by re-bidding for an extra 5 or 10 years, after which the vehicles will be sent to scrap-yards.
How does the COE bidding work?
COE employs an open bidding process. For the process, bidders submit a “reserve price”, an amount they are willing to pay for COE. As per January 2017, the premium for categories A and B is S$50,000. The bidding system automatically raises the number by S$1. The bidder is out of the running when the reserve price exceeds the bid. The final COE number will be the same as the winning bid.
To get started in a bidding, the bidder should have accounts in banks such as OCBC, Citibank, POSB/DBS, or UOB. For category D, a prerequisite amount of S$200 should be deposited.
Car dealers bidding for you
Car dealerships can do the bidding in COE for you. There are three ways to do this. The first way or option is to get a car that has COE bids with it. This would be a very costly affair. The second option would be to ask a car dealer to do the bidding for you. However, in this scenario, the car dealer might bid for any amount for getting the sale done. This might not be affordable for you, in the end. The third scenario will be to present your car dealer with a price-range and ask them to bid within this range. The dealer will comply with this. This could be a better and cost-effective option of bidding for COE.
COE Rebate and extension
If an owner decides to use his vehicle for only 5 years, the Singapore government will give the owner a rebate amount for the 5 years he will not be using his vehicle. Owners can apply for rebates if they decide to de-register as well.
As mentioned, COE can be extended for a maximum of 10 more years, after the first 10 years.
This is the process by which, a COE bidding and its nuances work.
Can tourists drive in Singapore?
Tourists can drive in Singapore using a valid foreign license. An International Driving Permit (IDP) issued from the home country can also be used as a license to drive in Singapore. Tourists from ASEAN states can drive without an international permit. However, it is mandatory to get a driving license after a year, in Singapore. The legitimacy of the stay should be mentioned for obtaining the license. People must enroll in driving institutes to obtain a license for heavy vehicles. The same is applicable for motorcycles as well. Be aware that, its right-hand drive in Singapore.
These are the basic details you should know if you want to drive in Singapore and also, the COE bidding and pricing when purchasing a vehicle in Singapore.