Firstly what is COE? The COE in Singapore gives you the right to drive and own a car or bike in Singapore, for a period of 10 years. After your COE expire, you can choose to renew the COE for another 5 – 10 years by paying the premium.
There are five different categories in COEs. For the various types of vehicle, you need the matching COE for the vehicle:
Cat A – Cars with engine capacity of 1600 CC and below
Cat B – Cars with engine capacity exceeding 1600 CC
Cat C – Goods carrying vehicles and buses
Cat D – Motorcycles
Cat E – This is an “open category” COE, which can be used for all of the above.
The government decides on the amount of available COEs in distributed every six months for each segment from the Vehicle Quota System (VQS).
By limiting the number of COE in the market, not everyone can get one. The Singapore government used the COE open bidding system for managing the quota. With the open bidding system, buyers can bid against each other for COEs.
Most people agree that the COE scheme is not perfect. The main issue would be you can't get COE cheap. As of June 2017, the COE premium for Open category is the price of S$50,526. After gathering feedback from the public, there were many creative suggestions as to how to rectify the COE scheme to give everyone an equal chance of getting a COE. Currently, the wealthy middle class and affluent families own most of the COEs.
One of the suggestions to make COEs great again is to segmenting COE by OMV. However, this will not separate those who “collect" multiple cars as a hobby from actual car users especially if the OMV quota sufficiently small. It is no surprise that the affluent will bid $200k for a COE to match their expensive million dollar sports car.
Another suggestion is to switch the current COE system to a charge-by-usage system. The proposal for a permit for a distance usage charge is a good idea, but it would not remove the COEs price entirely. Take for an example, If more people are driving aren’t the road going to be congested and so will be the distance usage fee? This suggestion is merely just breaking down COEs price to a small portion.
The bigger issue is that how will provide current system transit into the new regime. We can’t just change the current COE system overnight, We have to consider how shifting to a "COE for a block of distance" will affect current COE vehicle owners. This will open up lots of question, and it will be hugely debated.
Conclusion, we definitely cannot abolish the COEs bidding system as it has been doing an excellent job in controlling the number of cars on Singapore road. With all factors taken into consideration, the current COE system remains an effective tool to controlling the overall vehicle population in Singapore. Our COEs system does have its fair share of disadvantages, instead of solving ownership issues; the Singapore government is focusing on building a more efficient public transport network, and other mobility options make travelling around Singapore more convenience and accessibility to the public.