So you’ve gotten your driver’s license, and if you’re lucky enough to be able to afford a car, the next step is to now go shopping for your first vehicle. It’s not just as simple as picking your ideal ride, though, because there’s a lot of paperwork involved. Oh, and additional costs like COE, don’t forget that.
COE bidding in Singapore can be confusing and daunting if it’s your first time doing it on your own, rather than through a car dealer. But it can definitely be cheaper, if you do it right. Here’s a detailed breakdown of what exactly COE is, and how you can go about getting yours without going through a third party.
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If you didn’t already know, COE is an acronym for Certificate of Entitlement. It’s a legal document that allows you to register and own a vehicle in Singapore for a maximum of 10 years – not just limited to cars but also motorbikes, goods vehicles, and buses. At times, the cost of COE can be higher than that of the car itself.
Yes, this piece of paper costs a hefty sum – so it’s something you have to remember to factor in when buying your shiny new set of wheels.
Why so expensive, you might ask? Well, Singapore is incredibly land-scarce, so this is one of the measures put in place to regulate road traffic and car demand. Enter: COE bidding in Singapore.
There is also a quota, which means that not everyone can just waltz in and purchase COE as and when they want it. You have to compete with other potential car buyers to bid for it – we’ll explain the process later.
COE prices are not fixed. They fluctuate based on supply and demand factors, such as the current economic state of the country. Quick Econs lesson: When the economy is good, people have better spending power, and would thus be more open to purchasing a car. With an increased demand, the prices of COE tend to go up – both to help regulate traffic and bank on the willingness to spend.
Likewise, when the economy is bad, fewer people will want to spend on such big-ticket items – with job security and business profits a concern. In response, COE prices would then dip in a bid to increase that low demand.
COE prices also vary based on the type of vehicle you’re purchasing, which are sorted into 5 different categories:.
A chart detailing the COE bidding results from February-July 2023.
Image credit: sgCarMart
Again, based on supply and demand, the COE prices for cars are the highest – usually from $90,000-$100,000. That’s because cars are the most commonly sought after vehicles for personal use in Singapore. Conversely, the COE prices for motorbikes range from $9,000-$10,000.
This is also related to spending power – motorbikes are much cheaper than cars, so it can be assumed that one who goes for the former would have a lower spending power. COE prices are thus set accordingly.
In line with that, note that the larger your car (denoted by its engine capacity, in “cc”), the more you’ll have to pay for COE. A regular sedan that’s below 1600cc would require a lower COE compared to, say, a fancy sports convertible with an engine capacity above 1600cc – this difference in price can go as high as $15,000.
The open category, which allows you to choose any type of car, always costs the most – usually about a few hundred to a thousand dollars more than that of Cat B (cars above 1600cc). Understandably so, because they give you the best freedom of choice, with fewer bidders to compete with.
You can check the latest tabulation of COE prices so you can have a gauge of how much you might have to pay to secure a successful bid.
As mentioned earlier, COE is something you have to bid for in an open system, and those with the highest bids will be the ones snagging the limited spots.
This always follows a fixed schedule. Bidding opens at 12pm on the first and third Monday of each month, for a period of 3 days each time, ending on the Wednesday of the same week at 4pm.
Before each bidding exercise starts, the quota for each category will be released so you know how many spaces there are to fight for. You can check OneMotoring for results of the latest bidding exercise and the quota prices, so you can gauge how much to key in for your reserve price – that is, the amount you’re willing to pay for your COE.
Some things to take note of:
Since it is an open bidding system, you can see the current COE price go up as more people place their bids. If you think your reserve price is too low, you can always revise your bid – but note that every bid revision comes with an additional non-refundable admin fee. You can only increase your bid, not decrease it, and bids made cannot be cancelled.
One misconception newbies might have is that you will be paying whatever you key in as your reserve price. That is not true. The good news is, everyone will be paying the same amount, known as the Quota Premium (QP) or Prevailing Quota Premium (PQP). How this is derived is basically from taking the highest unsuccessful bid, and adding $1.
That means that, if your bid is on the higher end of the spectrum, but the QP based on the highest unsuccessful bid is much lower, you will be enjoying a lower payment that what you were initially prepared to give.
To break it down in simpler terms, imagine that there are 4 bidders, but only 3 available spots.
Bidder C, the lowest bidder, will thus be out of the running for COE. Bidders A, B, and D will all be paying the same QP of $29,700 + $1. Bidder B in particular heaves a huge sigh of relief as he doesn’t need to fork out the $40,000 he was initially prepared to part with. Phew.
COE bidding is all conveniently done through digital means, via an ATM machine using a DBS/POSB account. It’s really simple and foolproof:
1. Insert your card, enter your pin, and choose the option that says “Electronic COE bidding”.
2. Select your bank account for your deposit and admin fees to be deducted from.
3. Select your vehicle bidding category, submit your reserve price, and wait for your receipt.
Keep in mind that you have to use your personal bank account to bid, meaning you are not allowed to bid on behalf of someone else. For those using a joint bank account, use your own issued bank card to bid and you’ll be good to go.
Results are usually out almost immediately after the bidding exercise ends. You can check your COE bidding results on the LTA website by entering in your NRIC.
If the status is “out-bid”, it means that your existing bid is no longer in the running, and your deposit will be refunded – better luck next time. If it shows “accepted”, congratulations – you’re on your way to getting your COE.
From there, you will have to pay the full Quota Premium upfront, of course with the amount from the previous deposit minused off. Yes, it’s a huge lump sum, so bear that in mind when planning your finances – it might not be wise to splurge on a car if you have other big-ticket expenses like a wedding or school loans to pay off on a tight budget.
There are 2 options when it comes to an expiring COE: Extending your COE or deregistering your vehicle.
Once your COE expires, you have a 1-month deadline for COE renewal. However, you are not allowed to drive the car until or unless renewal is settled, and on top of that, will be required to pay a late renewal fee. It’s best that you get this sorted before it actually expires, preferably in the last month or so.
You can choose to extend your COE for another 5 or 10 years by paying the current Prevailing Quota Premium, which is the average of the past 3 months’ COE prices. You can calculate the amount to see if you find it worth paying for.
Renew your COE via the following channels:
Again, the renewed COE is usually paid as a lump sum, but there’s also the option to take a bank loan. However, bear in mind that the latter option would involve interest and you’ll be forking out a lot more in the long run.
If you choose not to renew your COE, your vehicle will be deregistered. In which case, you will have to send your car to the scrapyard as a form of disposal and wave it goodbye, even if it is still working fine. After valuation, your baby will be taken in for scrapping, with the body metal and spare parts recycled or reused. You will receive a small rebate for this.
Another option is to send it for export abroad with compensation, provided that there are exporters willing to take in your car based on its condition.
It is possible to deregister your car many years before your COE expires – for example, if you run into financial difficulties and decide that you need to sacrifice the comfort of owning a vehicle for practical purposes. In such cases, you will get a COE rebate, where any unused value will be returned to you.
This is pretty much all you need to know before COE bidding in Singapore, broken down in layman terms, so you’re now all set to embark on this big purchase. If you want to go into the nitty gritty, you can refer to LTA’s official user guide, which includes information for non-individuals (companies) as well.
Good luck, and may the odds be in your favour!
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Original article published on 29th January 2020. Last updated by Joycelyn Yeow on 28th July 2023.
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