Owning a Certificate of Entitlement (COE) goes hand-in-hand with owning a car. However, the COE bidding system may get complicated at times. Worry not, as UCARS is here to help you better understand COE, bidding, and car buying in Singapore.
What Is Certificate Of Entitlement (COE)?
Every vehicle in Singapore requires a Certificate of Entitlement (COE). The COE is a certificate that allows drivers to legally register, own, and use a vehicle of a certain category in Singapore for a period of 10 years. To obtain a COE, drivers need to participate and successfully win in an open bid uniform price auction, known as the COE Open Bidding Exercise.
The COE system was implemented as a way to rectify the rapid vehicle population growth rate in the 1990s. By creating a quota on the number of vehicles allowed on the road, traffic congestions have since been eased significantly. Today, this system remains as one of the key pillars in Singapore’s traffic management strategies that has contributed to our sustainable urban quality of life.
- The Fundamentals Of COE
- COE Bidding Exercise
- When to Buy A Car: Past COE Bidding Results Analyses & COE Predictions
- COE Renewal
The Fundamentals Of COE
Before we get into how to get a COE, let us take you through the ‘what‘s of COE.
COE prices are determined by the interaction of demand and supply for COEs. How are the demand and supply for COEs affected?
As Singapore’s economy grows, the car market thrives as people have increasing means to own one, driving demand upwards. On the other hand, a slowing economy would reduce consumer’s spending power, thus reducing demand for cars. Additionally, new vehicle models launches could create increased demand, as consumers want to get the latest vehicles.
On the other hand, the supply of COEs is regulated by the Vehicle Quota System (VQS). The VQS is calculated every 3 months based on the following conditions:
- Actual number of vehicles taken off the roads (i.e. Number of vehicles de-registered)
- Adjustments arising from temporary COEs that have expired or were cancelled
- Allowable growth in vehicle population
Should demand for COEs increase, it is likely that COE prices will increase (given that the supply does not change). Conversely, lowered demand is likely to decrease COE prices. Hence, it is important to monitor the demand and supply of COEs closely to get a better estimate of future COE prices.
Based on previous COE trends, we see that COE prices for cars are the highest across all categories. This can range from about $25,000 to $40,000, as compared to motorcycles, which usually range from $3,000 to $4,000. So, be prepared to spend an extra sum on top of the cost of your vehicle!
The COEs are divided into five categories. To own and operate a vehicle in Singapore, it is compulsory to bid for a COE from the matching category:
- Category A | Cars with engine capacity up to 1,600cc and maximum power output up to 97 kW (130bhp)
- Category B | Cars with engine capacity above 1,600cc or maximum power output above 97kW (130bhp)
- Category C | Goods carrying vehicles and buses
- Category D | Motorcycles
- Category E | This is an “open category” COE, which can be used for all of the above
There are various categories due to the different types of cars and vehicles that can be found on the roads. If you get a car that has a higher engine capacity (denoted by ‘cc’), you will have to pay more for the COE. This is to account for the additional vehicle emissions for higher engine capacity cars.
As for the open category (Cat E), it allows you to choose any type of car you want from the above categories. There are lesser bidders to compete with, and you have more freedom over your choice of vehicle. Of course, there is a price to pay – COE for Cat E always costs the most.
While looking for your next vehicle, you might be bombarded by acronyms and terms you may not be familiar with. Here are terms that you must know in your car buying journey.
Vehicle Quota System (VQS)
The VQS is a system that imposes a quota on the maximum number of vehicles that can be used at any given time in Singapore. This is done so by limiting the supply of COEs available. Since each COE can only be kept for maximally 10 years, you would either have to pay to renew your COE to continue using your vehicle, or deregister and scrap it.
Additional Registration Fee (ARF)
The ARF is a tax imposed when you register a vehicle. It is calculated based on a percentage of the Open Market Value (OMV) of your vehicle. You must pay the ARF in addition to all the other relevant fees and taxes.
Preferential Additional Registration Fee (PARF)
Any car below the age of 10 is known as a PARF car. PARF cars are eligible for a PARF rebate – the scrap value that you would receive if you deregister your vehicle. Your PARF is calculated based on the amount of time left until your COE expiration, and the ARF. As a rule of thumb, the newer your car is when you deregister, the more PARF rebate you will enjoy.
Quota Premiums (QP)
The QP is the price that all successful bidders in that category will have to pay for their COE. This is determined by adding $1 to the highest unsuccessful bid in the category. QPs will vary for each COE category, depending on the demand.
Prevailing Quota Premium (PQP)
PQP is the moving average of COE prices (QPs) in the preceding 3 months. Hence, it will vary month-to-month, according to the previous months’ prices. For those renewing their COE, they would pay the PQP instead of going through the entire COE bidding process again.
In order to snag a COE for your car, you will need to participate in the COE Bidding Exercise. This will be done through the COE Open Bidding System, which is a system unique to Singapore.
So, how do you actually bid for COE?
The first step is to get a thorough understanding of the COE Open Bidding System. This system is used by the Singapore government to regulate and determine the price of COE.
The release of COEs is done through a three-day COE open bidding exercise. Each bidding exercise allows you to bid for the respective COE category your car belongs to.Usually held twice a month, it typically starts on the first Monday and third Monday of the month at 12pm for two days. The COE bidding will end on Wednesday at 4pm, and COE bidding results will be released by then. If a public holiday falls within bidding exercise, the bidding period will be extended accordingly. About 3 days before the start of each bidding exercise, the number of quotas available, start date and time, and end date and time will be published here.
Car buyers often want to reduce the hassle of bidding for COE. Instead, you can opt to get car dealers to do the work for you. However, what you might lose out on are savings. When car dealers help you to bid, you are agreeing to higher overall quotations for your car. This is because dealers only bid for your COE after you purchase your car. To prevent losses, they will quote higher prices for your car in case COE prices rise above their expectations.
On the other hand, self-bidding allows you to bid along with real-time COE prices. By bidding on your own, you get to experience the thrill of the entire car purchasing process. The downsides are that you need to have $10,000 on-hand, and the 3-day bidding process can be rather arduous. If you are up for the challenge, we’ve put together a handy guide here.
When buying a new car, most dealers offer COE packages along with the vehicle. The cost of the COE will be included in the price of your car, subject to conditions (if applicable).
Dealer Bidding & Types Of COEs Offered by Dealers
There are several types of COE packages that you can purchase from dealers. These are separated into conditional and unconditional types. Be sure you are clear about the details and clauses before signing the contract!
A. Guaranteed COE At $XX (Conditional)
$XX is known as the agreed ceiling price. This means the dealer will only secure your COE if COE prices during the current bidding cycle fall below $XX. This is a conditional guaranteed COE. The dealer may ask you to pay the difference of the agreed price, or you may not secure your COE.
B. Guaranteed COE Without Top-up (Unconditional)
Guaranteed COE without top-up is the most straightforward COE package out there. Whatever price is stated on paper is the price you are going to pay, regardless of COE price fluctuations. This is the most popular option for many as they need not worry about potentially having to pay extra, or not being able to get their car at all. Although the upfront costs seem much higher than non-guaranteed COEs, rest assured that your COE is in the bag.
C. Guaranteed COE With COE Rebate At $XX (Conditional)
As for guaranteed COE with COE rebate at $XX, most authorised dealers (ADs) prefer to offer this package. While this is fairly similar to guaranteed COE without top-up, there are minor differences you should take note of.
COE rebate is the amount that the dealer refunds you should the COE price fall below $XX. For example, you are offered a COE rebate at $30,000. If the COE price is $25,000, you will get back a $5,000 rebate.
However, it is rarely the case that the COE prices fluctuate drastically from the offered price level. So, make sure you get a reasonable quotation when opting for a COE rebate!
D. Non-Guaranteed COE
Non-Guaranteed COE, as the name implies, means there is no guarantee of the COE. While non-guaranteed COE is the cheapest option, it can be hit-or-miss, possibly leaving your car-less. You will have to pay a deposit up front, and the dealer will help you to bid for a COE for up to three months. Should the dealer be unsuccessful in the bidding, they will refund your deposit. Therefore, you might wait for up to three months, only to realise you failed to get your car. Hence, non-guaranteed COE is the least recommended option.
Should you decide to bid for a COE yourself, here’s how you can do it.
First thing’s first: you MUST be at least 18 years old. You can only submit one bid in each exercise using your own name, NRIC and bank account if you are bidding as an individual.
Submit your bid during an open bidding exercise by keying in your reserve price into the system. The reserve price is the maximum amount you are willing to pay for the COE. This can be done at any DBS/POSB ATM:
- Insert your card and choose the option that says “Electronic COE bidding”
- Select the bank account you want your deposit and administrative fees to be deducted from
- Select your vehicle bidding category, submit your reserve price, and wait for your application to be processed (you will be provided an acknowledgement code)
If you are bidding for a car, there is a $10,000 deposit that will be deducted from your bank account. The $10,000 will either be refunded if your bid was unsuccessful, or deducted from the total price of COE. Also, for every bid application and subsequent bid revisions, an administration fee ranging from $2 to $10 will be charged. Note that the admin fees are non-refundable. Therefore, do ensure you have sufficient funds ($10,000) in your account to pay for the deposit and admin fees.
Next, you can check your bidding status and revise your bid via the LTA Open Bidding Website by entering your NRIC.
The system will automatically revise the bid upwards by increments of $1 until your reserved price is reached. As long as Current COE Price (CCP) is below or equals the reserve price, the bid will continue running.
Should the CCP exceed the reserve price, the bidder can choose to:
- Revise the reserve price, or
- Drop out of the current bidding exercise
Once the number of bidders willing to pay at least the CCP matches the quota at the end of the exercise, the CCP will stop increasing. Those whose bids are equal or above the CCP will be awarded a COE. The latest CCPs at the close of bidding will be the Quota Premiums (QP) for the current bidding exercise. All successful bidders will pay the same QP for the respective categories, regardless of their bid.
If your status shows ‘OUT-BID’, it means your bid is no longer running and you were unsuccessful. However, if your status shows ‘ACCEPTED’, you have successfully secured a COE! All that is left to do is for you to make payments.
The final amount you have to fork out for your new ride is intrinsically tied to COE trends. For an in-depth explanation of the past COE Bidding Results, read our latest analyses and discover future predictions from industry experts to help you bid strategically. These conclusions will provide you with a better understanding of how the market is moving functions and perhaps eliminate some of your own biases.
- 5th July 2019 | COE Prices Close Mixed As Of 3 July
- 19th July 2019 | COE Quota August 2019 to October 2019 — Why Now May Be A Good Time To Buy A Car
- 15th October 2019 | COE Supply To Dip Slightly For November To January Period
- 6th July 2020 | Private Car Owners To Continue Paying COE And Road Tax
- 9th July 2020 | COE Bidding Results: July 2020 Analysis
- 23rd July 2020 | COE Bidding Results: July Analysis (Second Tender)
- 6th August 2020 | COE Bidding Results: August 2020 Analysis (First Tender)
- 20th August 2020 | COE Bidding Results: August 2020 Analysis (Second Tender)
- 10th September 2020 | COE Bidding Results: September 2020 Analysis (First Tender)
- 24th September 2020 | COE Bidding Results: September 2020 Analysis (Second Tender)
- 8th October 2020 | COE Bidding Results: October 2020 Analysis (First Tender)
- 14th October 2020 | Monthly COE Quotas For November 2020 To January 2021
- 22nd October 2020 | COE Bidding Results: October Second Tender Analysis
- 5th November 2020 | COE Bidding: November 2020 First Tender Analysis
- 19th November 2020 | COE Bidding: November 2020 Second Tender Analysis
- 9th December 2020 | COE Bidding: December 2020 First Tender Analysis
- 23rd December 2020 | COE Bidding: December 2020 Second Tender Analysis
- 7th January 2021 | COE Bidding: 2021 January First Tender Analysis
- 21st January 2021 | COE Bidding: January 2021 Second Tender Analysis
Upon expiration of your COE, you must either renew it in order to keep using your vehicle, or deregister and dispose of it.
If your car is in good condition, you may want to consider COE renewal instead of buying a new car.
Should you renew your COE, you will only have to pay the Prevailing Quota Premium (PQP). Do note that PQP is not fixed; It is the moving average of the Quota Premium COE prices within the last three months prior to renewal.
When deciding whether to renew your COE, bear in mind the potential rebate you might be giving up. If you decide to follow through, you will be forfeiting your Preferential Additional Registration Fee (PARF) rebate. This is the scrap value that you would receive if you deregister your vehicle instead.
If you renew your COE for five years, you will have to pay 50% of the PQP, and must scrap your car after the five years are up.
On the other hand, you will have to pay the full PQP amount for a 10-year renewal and you may still choose to renew your COE for another 10 years after that 10-year period expires.
There is a large gap in cost between a 5-year renewal and a 10-year renewal, so you should definitely take your car’s condition and your budget into consideration first.
While LTA allows car owners to renew their COE 30 days after the expiry date, you should start planning on renewing your COE as soon as possible. Aim to start planning at least 6 months before your COE is due to expire to be safe, and to avoid incurring the late renewal fee.
Each vehicle type is subject to a late renewal fee of varying values.
|Vehicle Type||Late Renewal Fee|
|Private Motor Car (1,000cc and below)||$50|
|Private Motor Car (1,001cc to 1,600cc)||$100|
|Private Motor Car (1,601cc to 2,000cc)||$150|
|Private Motor Car (2,001cc to 3,000cc)||$200|
|Private Motor Car (More than 3,000cc)||$250|
|Business Service Passenger Vehicle (Company Car)||$250|
|Goods Vehicle and Public Service Vehicle||$250|
While renewing your COE may not be as expensive as buying a brand new one, it is still a lot of money. Depending on the PQPs, you may find yourself having to pay tens of thousands to keep your car on the road. Luckily, there are ways to finance your COE without having to fork out that much cash upfront! Enter COE renewal loans.
There are just as many options out there to finance your COE renewal as there are to buy a car. In fact, most banks and finance companies offer COE renewal loan plans if you do not want to fund your COE renewal by yourself.
You can even get a loan that covers the entire cost of renewal, unlike car loans which usually only cover up to 70% of the cost. Of course, different banks and companies have different interest rates and policies, so be sure not to skimp out on doing your research thoroughly.
There are a few ways you can renew your COE and it’s fairly easy. Unlike getting a new COE, you do not have to go through the cumbersome process of bidding.
Online (6 am – 12 midnight daily)
You can renew your COE online on the OneMotoring site, as long as you have an internet banking account with any of the following banks: DBS/POSB, OCBC Plus!, Standard Chartered Bank, Citibank, UOB (eNETS Debit).
If you wish to renew your COE by post, you may do so by mailing this completed online form along with your PQP payment via cheque or Cashier’s Payment to the Land Transport Authority (LTA) Customer Service Centre. Ensure that both your form and payment reach LTA before the expiration of your COE, as it takes about 2 weeks to reach LTA.
At the LTA Customer Service Centre
You may pay by cheque, cash, cashier’s order, Diners Club Card or NETS if you are paying before your COE expiry. Otherwise, if you are renewing within one month after your COE expiry, only cash, cashier’s order or NETS payment will be accepted. You will also be subject to a late payment fee.
Now that you have a thorough understanding of COE bidding and COE renewal, you are well-equipped to owning a COE. Whether you are a first-time or seasoned car buyer, you are well on your way to your next drive around Singapore. Take a look at our selection of new cars and used cars in our marketplace today!
At UCARS, we understand that owning a car is a big financial commitment. Our marketplace is dedicated to help you get the best deals with guaranteed COE so you can make the right decision and save money! Browse our finest collection of quality cars at your fingertips or schedule a live video call session at the comfort of your own home here.