SINGAPORE: Singapore is the most expensive city in the world to own a car, and the price for the Certificate of Entitlement (COE), the permit that allows someone the right to own and operate a vehicle for 10 years, has gone up again. This led to a Reuters article pointing out that the bid for a COE in Singapore costs as much as four Toyota Camry Hybrids in the United States.
In the last tender before this week, the premium for larger cars (Category B) was S$140,889. In the bidding exercise on Wednesday (Oct 4), however, it had risen to S$146,002 (US$106,300). Also, for the first time, obtaining an open category COE that can be used for all vehicle types went over S$150,000, going from S$144,640 to S$152,000. Even motorcycle premiums have got more expensive, however slightly. From S$10,700 in the last exercise, they are now at S$10,856.
In fact, prices went up in all categories except for smaller cars, Category A. From a record high of S$105,000 at the last bidding, the price has gone down by SS$1000 and is now at S$104,000.
The reason for the surge in the price of a COE, which was implemented to control the number of cars in land-scarce Singapore, is a post-Covid-19 pandemic boom in car ownership, Reuters adds. A COE costs four times as much as it did in 2020, at the height of lockdowns that saw very little activity in the city-state. During that time, a COE could be obtained for as little as S$30,000.
“The skyrocketing price puts cars firmly out of reach of most middle-class Singaporeans, putting a dent in what sociologist Tan Ern Ser said was the ‘Singapore Dream’ of upward social mobility – having cash, a condominium and a car,” noted Reuters’ Xinghui Kok on Oct 4, noting that the median yearly household salary is S$121,188.
The piece also quoted Assoc Prof Tan as saying, “There is a need to lower one’s aspiration from achieving the ‘good life’ to settling with a ‘good enough life’.”
Nevertheless, with a rebound in economic activity in the country, the demand for new cars has stayed high in a country of many high-net-worth individuals despite rising COE prices.
The BBC, which also reported on the COE uptick, quoted MS Alice Chang from Toyota Borneo Motors as saying that she had expected the higher price because of the strong demand.
“Whenever we have luxury cars, buyers are queuing up outside our store,” she was quoted as saying.
/TISG