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Understanding The Basics of Singapore’s Certificate of Entitlement (COE) System

Navigating the roads of Singapore with your newly acquired vehicle involves more than just the initial steps of purchasing, registering, and insuring it. An essential component in this process is obtaining a Certificate of Entitlement, commonly known as a COE. But what exactly is a COE, and what steps are involved in securing one? Let's find out in this quick guide.

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What Is A COE & How It Works

In Singapore, the COE system is a key component of the country's vehicle quota system, which aims to regulate and control the number of vehicles on the road. Here's how the COE system works.

Vehicle quota system

Singapore employs a vehicle quota system to manage the number of vehicles on its roads. The Land Transport Authority (LTA) sets a predetermined number of allowable vehicle registrations for a specific period, typically six months.

COE auctions

The right to register a new vehicle in Singapore is represented by the Certificate of Entitlement (COE). COEs are auctioned through a bidding process that occurs every month. There are five categories of COEs, each corresponding to a vehicle type: Category A (cars up to 1600cc), Category B (cars above 1600cc), Category C (goods vehicles and buses), Category D (motorcycles), and Category E (open category for any vehicle type)

Bidding process

Interested individuals or businesses bid for a COE in their desired category. Bids are submitted during specific bidding periods, and participants indicate the maximum amount they are willing to pay for the COE.

COE prices

COE prices are determined by the demand and supply dynamics during the bidding process. If demand exceeds the quota set by the government, COE prices tend to rise, and vice versa.

Winning bids

At the end of the bidding period, the highest bids within the available quota for each category win the COEs. Successful bidders pay the winning bid amount as the COE premium.

COE validity

Once obtained, a COE is valid for ten years. Vehicle owners must renew their COE if they wish to keep their vehicles on the road beyond the initial ten-year period.

Vehicle registration

A vehicle owner with a successful COE bid can then register a new vehicle. The COE premium is separate from the actual cost of the vehicle.

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How Do I Bid For A COE?

Step 1

Eligibility Check

Eligibility Check
Ensure that you meet the eligibility criteria for COE bidding. Individuals, businesses, and organizations can participate in the bidding process.

Step 2

Open a Bidding Account

Open a Bidding Account
Open a bidding account with a participating bank or financial institution. This account is necessary for submitting your COE bids. Next, deposit funds into your bidding account. The deposited amount will serve as a financial guarantee for the bids you submit.

Step 3

Check the Bidding Period

Check the Bidding Period
Stay informed about the upcoming COE bidding periods as the Land Transport Authority (LTA) publishes the bidding schedule in advance on their website.

Step 4

Select the COE Category and Submit Bids

Select the COE Category and Submit Bids
Determine the COE category based on your vehicle type. Categories include A (cars up to 1600cc), B (cars above 1600cc), C (goods vehicles and buses), D (motorcycles), and E (open category). During the specified bidding period, log in to the COE bidding system using your bidding account. Submit your bids for the desired COE category and do remember to indicate the maximum amount you are willing to pay for the COE.

Step 5

Monitor Bidding Results

Monitor Bidding Results
After the bidding period concludes, monitor the results. The highest bids within the available quota for each category will secure the COEs. If your bid is successful, you will receive a notification from the bidding system or your bank. The notification will include details on the premium amount and the COE you secured.

Step 6

Make Payment

Make Payment
Make the payment for the successful bid within the stipulated timeframe. This typically involves deducting the bid amount from your bidding account.

Step 7

Collection of COE

Collection of COE
After successful payment, you can collect your COE from your bank or financial institution. The COE is valid for ten years.

Step 8

Vehicle Registration/Renewal

Vehicle Registration/Renewal
With the obtained COE, proceed to register your vehicle with the Land Transport Authority (LTA). This involves completing the necessary paperwork and paying additional fees. Keep track of your COE's expiration date. If you wish to continue using your vehicle beyond the initial ten-year period, you can apply for COE renewal.

Types Of COE Available For Bidding

In Singapore, the Certificate of Entitlement (COE) system applies to all types of vehicles, including both electric cars and petrol cars. However, there are specific categories within the COE system that differentiate between different types of vehicles, and the COE prices can vary accordingly. The two main categories relevant to cars are Category A and Category B.

Category A:

  • Category A is for cars with an engine capacity of up to 1600cc and is typically associated with smaller and more fuel-efficient vehicles.
  • Electric cars with engine capacities falling within this range would compete in Category A for their COE.

Category B:

  • Category B is for cars with an engine capacity above 1600cc and includes larger and more powerful vehicles.
  • Most petrol-driven cars and some larger electric vehicles would compete in Category B for their COE.

It's important to note that electric cars are not segregated into a separate category solely for electric vehicles. Instead, they participate in the same bidding categories based on their engine capacity. The COE premiums for Category A and Category B can fluctuate based on market demand and supply during the monthly bidding exercises.

Will My COE Affect My Car Insurance Coverage?

The Certificate of Entitlement (COE) does not have a direct impact on the calculation of car insurance premiums as car insurance premiums are primarily influenced by factors related to the vehicle, the driver, and the coverage chosen. However, the COE indirectly affects the overall cost of owning and insuring a car in various ways as shared below.

Vehicle value

The COE contributes significantly to the upfront cost of purchasing a vehicle. While it doesn't directly affect insurance premiums, the higher the COE value, the more expensive the overall vehicle, which can indirectly influence the cost of comprehensive insurance coverage.

Overall ownership costs

The COE is a substantial component of the overall cost of owning a car in Singapore. When considering insurance coverage, potential car buyers should factor in the total cost of ownership, including the COE, as it impacts the financial commitment associated with the vehicle.

Depreciation

The COE has a ten-year validity period. As the COE approaches expiration, the depreciation of the vehicle can impact its market value. Insurance premiums for comprehensive coverage may be influenced by the vehicle's current market value, which includes considerations of depreciation.

Vehicle category

Different categories of vehicles have separate COE categories, each with its own bidding dynamics. While the COE category doesn't directly impact insurance premiums, the type of vehicle (e.g., car, motorcycle) does play a role in determining the insurance premium based on factors such as risk assessment and safety features.

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Frequently Asked Questions

What is a COE?

The COE system is a key component of the country's vehicle quota system, which aims to regulate and control the number of vehicles on the road. The right to register a new vehicle in Singapore is represented by the Certificate of Entitlement (COE) in Singapore.

When do COE bidding happens?

COEs are auctioned through a bidding process that occurs every month. There are five categories of COEs, each corresponding to a vehicle type: Category A (cars up to 1600cc), Category B (cars above 1600cc), Category C (goods vehicles and buses), Category D (motorcycles), and Category E (open category for any vehicle type).

How long is a COE valid for?

A COE is valid for ten years. Vehicle owners must renew their COE if they wish to keep their vehicles on the road beyond the initial ten-year period.