Time to review COE system?

Published in Straits Times on 5 April 2010

The current system of bidding for Certificates of Entitlement has been operating for more than twenty years. When it was first introduced, it was envisaged that the end buyers would be bidding for the certificates.

Over the years, the bidding for these certificates appear to be dominated by the motor dealers who make a large profit on the trading of these certificates, adding to the total cost of ownership of a vehicle. The bidding system also encourages speculation and price volatility due to greed and fear.

One obstacle for the end buyer to bid directly is the high price of the certificate and the lack of financing for this item.

I wish to suggest the following modifications to the system reduce the speculative activity:

- Allow the successful bidder up to of six months to find a suitable vehicle
- Require the successful bidder to pay only 10% at the time of bidding and the remaining 90% on purchase of the vehicle
- Change the bidding cycle to three months (instead of the current one month).

The proposed changes will create a fairer and more transparent market for the certificate of entitlements and remove the unhealthy speculation.

Tan Kin Lian

Dear Mr Tan,
I saw your letter to the ST Forum today. I applaud you that you raised this issue for consumers like me. I was held captive by the COE system. The COE bidding discourages end users to bid due to the high upfront cash layout as deposit. Genuine bidders with limited cash will be left out. We are left at the mercy of the car companies who do not provide transparent cost structure.


Very often, you will not get a good car price if you got for your own COE. LTA insists that COE is transparent but COE is obviously a tool for car company to hide profits. I do not have the history of when COE started, (how many people have? we buy cars at most 5 times in our life time?) e.g. why there is this 'Open Category' where car companies can hold them and trade later, exchanging hands ... There seems to be more happening than we, as consumers, know. This is not transparent and definitely unfair.


S Y Tan