COE premiums rise in latest bidding exercise, Category B hits S$109,000

Certificate of Entitlement (COE) premiums closed mostly higher in the latest bidding exercise on 18 December, with notable increases in several categories.

Category A COEs, for smaller cars with engines of up to 1,600cc and horsepower not exceeding 130bhp, rose to S$96,000 (US$71,000), up from S$94,000 in the prior exercise.

Premiums for larger and more powerful cars in Category B climbed significantly, closing at S$109,000, compared to S$103,010 in the last round.

The Open Category, which can be used for any vehicle type but is predominantly applied to larger cars, saw premiums rise to S$108,992 from S$104,001.

In contrast, premiums for commercial vehicles, such as goods vehicles and buses, experienced a slight dip, closing at S$69,890 from S$70,289 previously.

Motorcycle premiums, however, increased to S$8,381 from S$7,878 in the last bidding exercise.

A total of 3,864 bids were submitted, with a quota of 2,667 COEs available. The results reflect the sustained demand for private and commercial vehicles amidst ongoing adjustments in vehicle ownership policies.

This is the fourth bidding exercise since the government announced in October its decision to progressively inject up to 20,000 additional COEs across all vehicle categories from February 2025 over the next few years.

The Land Transport Authority (LTA) explained the rationale behind the decision. The agency attributed the increased availability of COEs to the upcoming implementation of the ERP 2.0 system. According to the LTA, this system will enhance the management of traffic congestion, making it feasible to add more COEs without overwhelming road infrastructure.

Changing travel patterns in the post-pandemic era have also influenced the move. The LTA noted a reduction in total vehicle mileage for private vehicles over the past five years, driven by the rise in flexible work arrangements.

Further injections of COEs may be considered in the future, contingent on the implementation of distance-based charging, a concept currently under study.

On 12 November, Transport Minister Chee Hong Tat clarified in parliament that the upcoming injection of 20,000 COEs is independent of this potential policy.

“We have not made a decision on whether to implement distance-based charging, though ERP 2.0 gives us the option to do so,” said Mr Chee. He emphasised that more data from ERP 2.0 and detailed assessments of trade-offs are required before any decision can be made.

Members of the public expressed scepticism over analysts’ suggestion that Singapore’s traffic congestion will remain manageable despite the anticipated increase in vehicles. Many criticised ministers and experts for being out of touch with real-world traffic issues and prioritising financial measures over effective solutions.