The Certificate of Entitlement, commonly referred to as COE, is a permit required for Singaporeans who want vehicle ownerships that last for 10 years. Introduced in the year 1990, the COE is an important component of the Vehicle Quota System or the VQS, which seeks to regulate the growth of Singapore’s vehicle population.
Since there is a limited amount of COE each year, it is distributed to Singaporeans through an open-bidding system. However, as a result of the bidding process, the cost of COE tends to be unpredictable as it drastically fluctuates depending on the government policies, demand, economy, and availability of COE. Additionally, although Singaporeans can renew their COE permit, they are required to pass the vehicle inspection before renewal.
This article aims to go into further detail of the unpredictability of COE and how important it is to find a car workshop in Singapore that provides reliable car servicing.
The Unpredictability of COE
Although the VQS’s open-bidding system has contributed to Singapore’s traffic management system, the price of the COE continues to fluctuate making it very difficult to predict. Nevertheless, the bidding process is influence with various factors such as:
- Government Policies
- Demands
- Economies
- Availability of COE
1. Government Policies
For Singapore’s roads to flow smoothly without much traffic, the government may introduce new policies. Such government policies will have a drastic effect on the price of the COE.
An example would be the zero-growth policy that was introduced during 2018. This policy’s main goal was to stop the number of cars from increasing. Basically, all current COE quotas will be based on the amount of COE that have expired after their 10 year period, deregistering the cars. Nevertheless, the amount of cars that are deregistered isn’t set in stone as depending on the scenario, the amount may increase or decrease overtime. As a result, the price of COE will fluctuate.
As such any policies that the government introduces, particularly those that are related to COE, will have a drastic effect on the bidding process of acquiring a COE.
2. Demands
In the past few years, the number of demands for COE have fluctuated according to certain factors each year. As such, the bidding price of the COE can change as the number of people who need it can drastically change the price.
One factor that contributes to the demand is Singapore’s population. At the end of 2023, Singapore’s population was 6,014,723, growing by 39,034.
| Year | Singapore’s population |
|---|---|
| 2023 | 6,014,723 |
| 2022 | 5,975,689 |
| 2021 | 5,941,060 |
| 2020 | 5,909,869 |
| 2019 | 5,866,40 |
Nonetheless, with the availability of alternative modes to travel like rental cars, public transport, and hiring-vehicles service like Taxi or Grab, younger generations have found that owning a vehicle isn’t needed compared to older generations.
Moreover, in Singapore there are different types of COE for different types of vehicles according to their carbon emissions. Depending on the type of vehicle that the consumer is interested in, they may have to purchase it at a higher or lower price.
Although it isn’t clear, immigrants at the working age may contribute to the demands for COE as some of them have already gained their driver’s licence. Yet, the price may deter them from gaining a COE compared to the price of getting a car in their home country.
3. Economics
Economics contributes to the number of demands. Going into further details, economics is the production, consumption, and distribution of goods and services. Not only does it affect the demand of COE, but it can also affect the consumer’s buying behaviour.
Economic factors such as inflation, employment rates, and a person’s income contribute to the consumer’s buying behaviour. As such, being uncertain of the economy can make the price of COE volatile. Plus, with the new cars being introduced with each new year, the prices of such cars increase which can deter people from buying, especially if they are from a low-income family.
4. Availability of COE
In a previous statement, it was noted that with a zero-growth policy, the number of COE that can be bidded is limited to the amount of cars deregistered after the 10 year permit expired. Therefore, depending on the economics and demands, the number of COE that can be bidded is affected. Consequently, the price of the COE becomes unstable as the number of COE that are available can either increase or decrease the price.
Importance of having a Solid Car Servicing Mechanic
As for the importance of having a solid car service provided by a car workshop in Singapore, it allows Singaporeans to maximise their car’s lifespan, manage its cost, apply for COE renewal, and gives them a peace of mind.
1. Maximising Lifespan of the Vehicle
With how the cost of the COE permit tends to be unpredictable, people tend to make full use of the permit during its 10 year period. For that reason, regularly maintaining the vehicle’s condition will not only allow it to last longer, but also maximise the value over the COE period. Thus, by having a reliable car service mechanic, it can ensure that the vehicle receives proper maintenance and immediately addresses problems. This will help to protect the car from any problems that may be too costly to repair and cause it to retire prematurely.
2. Managing Cost
The Certificate of Entitlement (COE) over the last 12 months, have been averaging at about SGD$100,000, additional cost when there is an unforeseen issue can be very expensive and may drain your wallet. So to prevent minor issues from escalating into major problems, finding trustworthy Singapore car servicing companies can help manage maintenance costs. It is better to get proper maintenance as the cost can be controlled than to get into a major accident where the price will always be expensive.
3. Renewal of COE
Bringing your vehicle to a workshop’s car garage can be a major factor that determines whether your COE permit is renewed or not. Knowing that a COE permit will expire in 10 years, those seeking to renew it will have to pay the Prevailing Quota Premium (PQP) according to their vehicle category.
However, in order for the COE renewal to be approved, they will need to conduct an inspection on the vehicle. Depending on the vehicle’s condition, the COE renewal can either be approved or disapproved. Performing the inspection, determines whether the owner is capable of taking responsibility for the vehicle and that they can contribute to a safe environment.
Consequently, having a trusted car mechanic who is capable of proper maintenance is essential to allowing the vehicle to meet the necessary standards of the inspections. As a result, the inspection will run more smoothly and may lower the chances of expenses or delays.
4. Peace of Mind
With the cost of COE being unpredictable and the expenses that come with owning a vehicle in Singapore, it can be expected that people will experience stress. For this reason, having a trustworthy workshop that provides a reliable car service will guarantee Singaporeans a peace of mind. Moreover, they can be assured that their vehicles are in good hands since the risk of the car breaking down drastically decreases.
Conclusion
In conclusion, having a solid car workshop in Singapore that provides reliable car servicing is essential to ensure the vehicle’s usability, safety and value. Especially in Singapore where the price to acquire the COE is unpredictable.
