COE Prices Hit New Highs – MOT May Step In With Cooling Measures

Singapore car COE prices have reached record-breaking levels once again, sparking concern among motorists and prompting speculation that the Ministry of Transport (MOT) could introduce new cooling measures to manage vehicle ownership. The upward bidding trend has raised questions about the sustainability of car ownership in Singapore’s tightly regulated market.

COE Prices Hit New Highs

Singapore car COE prices have hit new all-time highs across multiple categories. In the most recent bidding exercise, the COE price for Category B vehicles (cars above 1,600cc or 130bhp) breached the $150,000 mark, while Category E (open category) climbed even higher. These numbers have exceeded historical peaks, creating pressure on both private buyers and commercial vehicle operators.

What Is Driving the COE Bidding Trend?

The persistent upward bidding trend can be attributed to several factors:

• Limited COE supply due to lower deregistration rates

• Strong demand from private hire companies and luxury car dealers

• Resurgence in post-pandemic economic confidence

• Buyer FOMO (fear of missing out) driven by anticipated future hikes

Market analysts believe speculative buying is contributing to the overheating, especially within Category E, which can be used for any vehicle type. The open category often becomes a battleground for bidders trying to secure COEs amid tightening supply, pushing prices across the board.

MOT’s Role in Managing Vehicle Ownership

The Ministry of Transport (MOT) has consistently maintained a tight grip on MOT vehicle ownership, using COE quotas, road taxes, and vehicle-related policies to manage congestion and environmental impact. With current prices pushing car ownership out of reach for the middle class, there is growing public pressure for MOT to intervene.

Possible cooling measures may include:

• Temporary increase in COE quotas through early recycling

• Restriction or reclassification of Category E

• Adjustments to the Prevailing Quota Premium (PQP) system

• Incentives for alternative transport options like EVs or car-sharing

MOT has not yet confirmed any specific plans but acknowledged they are monitoring the market closely. Should prices remain persistently high, intervention is likely to prevent long-term inequity in access to vehicle ownership.

Impact on Vehicle Buyers and the Economy

For the average car buyer, current COE levels translate to a total vehicle cost that easily exceeds $200,000 for a mid-range car. This has made Singapore one of the most expensive places in the world to own a car. Many middle-income households are now priced out of the market, opting instead for public transport, car leasing, or ride-hailing services.

Businesses relying on commercial vehicles are also feeling the heat. Higher capital costs may be passed on to consumers in the form of higher service and delivery fees. This adds inflationary pressure in an already high-cost economy.

Banks are also adjusting car loan criteria, further tightening access for buyers with marginal credit profiles. These effects compound the urgency for regulatory review.

Long-Term Outlook for COE and Car Ownership

Looking ahead, Singapore’s car population will continue to be capped due to land scarcity and urban planning goals. MOT vehicle ownership policies are expected to evolve in ways that prioritize sustainability, space efficiency, and technology adoption.

Autonomous vehicles, electric vehicle subsidies, and tighter emission rules may be introduced or expanded as part of broader strategies. While COE prices may cool temporarily with intervention, long-term ownership costs are unlikely to decline substantially without a major policy shift.

FAQ

What is causing the spike in Singapore car COE prices?

The price surge is driven by tight COE supply, aggressive bidding by businesses, and speculative activity, especially in the open category.

Is the MOT planning to introduce cooling measures?

MOT has not officially confirmed action but stated it is monitoring the market. Measures could include quota adjustments or policy tweaks.

How does high COE affect average car buyers?

It significantly raises the total cost of car ownership, making cars unaffordable for many middle-income Singaporeans.

What is the bidding trend expected to look like in the next quarter?

Unless supply is increased or demand softens, COE prices are likely to remain high or increase further in the short term.

Can Category E COEs be regulated differently?

Yes, some experts suggest that stricter usage rules or quota separation could help control speculative bidding in Category E.

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