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Dear Editor,
Certificate of Entitlement or COE should not be used for trading like the stock market.
COEs are intended to regulate the number of new cars allowed on the roads so as not to cause gridlock on the roads.
However, this is not the case. Although it was reported that the motorcar showrooms at Leng Kee Rd were devoid of customers last week, the ‘open’ and ‘big’ car COE categories saw prices hitting the $100K mark!
So who is timing the market?
Since there are no car buyers, we can categorically say that there are NO individual bidders for the COEs.
By this simple analogy, it seems obvious that industry traders and players are commanding and distorting the market.
As the objective of the COE is to maintain a steady stream of new vehicles on the road, surely the Land Transport Authority (LTA) knows that allowing traders to bid COEs in bulk would eventually lead to trading and freewheeling.
With the release of 11,951 new COEs from May to July 2022, LTA should reign in this insanity of bulk bidding by traders. LTA should allow only individuals to bid for their COEs.
Industry players can help car buyers to bid for the COEs, but the bidders should be name-specific.
Transfer of COEs is to be disallowed to avoid market distortion and the validity of the certificates be reduced to 3 months in-line with the recently reduced validity for motorcycles.
LTA should carry out this review immediately to forestall further runaway COE prices.
Regards,
Gilbert Tan
The views expressed here are those of the author/contributor and do not necessarily represent the views of The Independent Singapore.