Explaining the Fundamentals of COE

Due to its size of approximately 700,000 square meters, Singapore enacted the Certificate of Entitlement (COE) system in 1990 to limit the number of vehicles and prevent the possible irreversible effect of traffic congestion in the future.

In this article, we would be talking about the fundamentals of this infamous system and how it works.


What is a Certificate of Entitlement?

A Certificate of Entitlement gives you the right to register, own, operate, and use a vehicle in Singapore for a duration of ten years. Upon its expiry, you have two options: scrap your vehicle or renew your COE for another five or ten years. What other people do is opt for a car consignment in Singapore that lets them retrieve at least a partial amount of what they spent on their COEs.

For first-time car owners, the COE bidding system could be overwhelming. COE bidding and document are more expensive than the market value of the car. Singaporeans even joke about having to marry twice, one for convenience and one for love, whichever comes first. 

The number of COEs open for bidding is decided by the Singaporean government every six months, as there is an existing count limit for each vehicle category determined by the Land Transport Authority (LTA). Before you purchase a new vehicle, you are to submit your COE bid against other buyers in the same category.

There are five categories of vehicles and you will need a COE of the matching category to register your vehicle.

1. Category A – Cars with 1600 CC engine capacity and below

2. Category B – Cars with 1601 CC engine capacity and above

3. Category C – Trucks and buses

4. Category D – Motorcycles

5. Category E – “Open Category” COE that can be used for all of the above


Understanding The Bidding System

A COE bidding is like a battlefield. Bidders are expected to give everything they have got when submitting their reserved prices. The Reserved price is the amount that a bidder is willing to shell out for their COE.  

The system will be raising the current price by $1 and if the current price of COE exceeds a bid, the bidder is out. The current price will keep on going until the number of bidders is equal to the amount of available COEs. It would end with the final price being the amount that the winning bidders would have to pay.


2 Ways to Bid


1. On Your Own

Doing your own bidding will require you to have one of the following bank accounts: OCBC, POSB/DBS, Citibank, UOB (for companies). For DBS/POSB account holders, you can submit your bids using the bank’s ATM machines. For the others, you would have to contact the bank for further details.

For the motorcycle category, bidders are required to deposit an amount of $200 as a prerequisite, while it is $10,000 for all other categories.

2. Let the Car Dealers Deal With It

If the entire bidding process confuses you, you can let the car dealers do the hard work for you. The first option is buying a car with a COE already. In which case, your dealer will have to utilise a Category E for your vehicle’s certificate, since this category is open for all types of vehicles. Many dealers often have a handful of COEs ready for this category for urgent needs, should there be people who would just turn those who sell used cars in Singapore.

Another way would be to entrust your money with the car dealer and they would secure a COE for you. The downside to this is that you would not be able to get a say on the final bidding price because the dealer’s goal is to secure you a COE at all costs. However, as the last option, you can inform your car dealer the price you are willing to pay for your COE but this would just take a little longer than the prior option. Since it will take time for the dealer to find a bid within your price limit.


To Scrap or To Renew?

The COE rebate and extension could really be a dilemma. Car owners face two choices, surrender their vehicles to scrap car shops in Singapore or continue to pay for an extension that sometimes could cost more than the value of the car. 

However, after ten years, you are not mandated to bid again for your car’s COE. You can simply re-validate it by paying the three-month average of the Quota Premium for the selected category.

Despite many people arguing that this only makes Singapore a car-elitist country, the COE system was meant to solve. It is meant to reduce car numbers in Singapore, which it definitely served making Singapore one of the most first-class countries in the world.

Are you looking for ways to rebate your car? Visit our website to sell your car on consignment and retrieved some amount of many that you spent on your COE.

SGCarTrade is a free online platform to source for the highest quote for your used car. Sell your car or scrap your car can never be easier than this through our free service, with no fees and obligations. Our network of dealers will bid for your car within 1 working day! You have the option to watch your car bids LIVE on our website by selling your car through auction. Rest assured and be at ease while we do the job for you. 

More To Explore

How To Calculate Car Depreciation?

How To Calculate Car Depreciation?

At the point when you purchase another or used car, it is essential to think about the yearly depreciation of the vehicle. This depreciation will

Share This Post
Share on facebook
Share on linkedin
Share on twitter
Share on email

Do You Want To Find Out More About Cars Advices?

Like Our Facebook Page