Singapore expensive car. In Indonesia, having around a dozen million Indonesian Rupiah as a down payment is usually enough to buy a car. However, in Singapore, residents first need to obtain a Certificate of Entitlement (COE), which is incredibly expensive and valid for only ten years.
COE Costs and Car Prices
The cost of the Certificate of Entitlement (COE) does not include the price of the car itself. For instance, to own a brand-new Toyota Camry Hybrid, Singaporeans must dig deep into their pockets, spending nearly IDR 3 billion (S$250,000), which covers the COE and taxes.
This price is approximately six times higher than in the United States. For the same Camry model, the price in Indonesia is around IDR 1 billion.
The COE System
Singapore introduced the COE system in the 1990s to curb traffic congestion caused by the proliferation of vehicles. To purchase a car in Singapore, prospective buyers must possess a COE. These certificates are sold through auctions every two weeks, with the government controlling the number of certificates available.
When combined with taxes and import duties, this system makes Singapore the most expensive country in the world to buy a car.
Varieties of COEs
In Singapore, there are different types of COEs, including those for small cars, motorcycles, and commercial vehicles. As an example, the COE price for large vehicles recently skyrocketed to IDR 1.6 billion (S$146,002).
COE prices have reached record highs for several consecutive months due to various factors, such as the post-pandemic economic recovery and the anticipation of the government reducing COE prices next year.
The lowest-priced COE for a car is approximately IDR 1.1 billion (S$104,000), nearly tripling since 2020 when demand for new cars decreased due to the pandemic.
The “open” category COE, which has no restrictions on the type or size of car that can be used, also reached a record high of IDR 1.7 billion (S$152,000).
Impact on Car Buyers
Alice Chang from Toyota Borneo Motors told the BBC that she attributed the rising COE costs to the high demand for new cars. “Every time we have a luxury car, buyers queue outside our store,” she said.
Despite its relatively small size, Singapore consistently ranks high on the list of countries with the largest number of millionaires in the world. However, for the average Singaporean, with an average annual income of around IDR 797 million (S$70,000), the COE scheme makes it challenging to afford a car.
The government is encouraging its citizens to use public transportation, which is considered one of the best in the world. Last year, the Singaporean government allocated over IDR 683 trillion (S$60 billion) to expand and upgrade the Mass Rapid Transit (MRT) network over the next decade.
With a population of approximately 5.5 million people, the number of private cars in the city-state reached less than one million units at the end of last year. The availability of new COEs depends on how many old cars are retired from the roads.