Car prices in Singapore are insane! The Certificate of Entitlement (COE) needed before you can purchase a car can add 100,000 dollars to its cost. We explore why this exists & what happens to cars once the COE runs out.
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00:01 Did you know that three letters, COE, can add $100,000 to the cost of a car?
00:07 Welcome to Singapore, home to the most expensive cars and second-hand cars in the world.
00:17 The Mercedes-Benz is one of the most popular second-hand cars in Singapore.
00:22 As you can see, this six-year-old car is over $100,000.
00:28 This can buy two new similar cars in Germany.
00:31 Revs Julian Chan went on a journey through her approximately 730-square-kilometre home country
00:38 to try and uncover why cars cost so much in Singapore.
00:42 So what is the COE, or the Certificate of Entitlement?
00:50 Before you can buy a new car in Singapore,
00:54 you need to have a highly coveted permit that allows you to own and drive a car for 10 years.
00:58 In order to register your car, you need to have the license, which is called the COE,
01:05 Certificate of Entitlement, before you can register a car and put it on the road.
01:10 Since Singapore is a zero-growth market,
01:13 with only around 600,000 private cars allowed on the road at any point in time,
01:17 there are only around 600,000 COEs in existence.
01:22 New COEs can only be issued once older cars are deregistered, taken off the road and scrapped.
01:26 When this happens, a bidding process gets underway,
01:30 and these vital certificates go under the hammer.
01:33 And since there's a limited supply, they aren't cheap.
01:39 In today's market, the COE prices are so high, right, it's a record.
01:46 Just for a Honda Fit, you know, a small car, you have to pay $101,000
01:53 just for the Certificate of Entitlement to register your car.
01:57 And besides this, you have to pay the tax, ARF, the GST, Custom Duty, everything, it will add up.
02:05 When you buy a new car in Singapore, you don't just pay for the car itself.
02:09 You pay for the car and the Certificate of Entitlement.
02:13 And when you buy a used car, the cost of the COE is built into the price tag of the car.
02:18 But how expensive the second-hand car will be depends on its condition
02:23 and how many years are left on the existing COE.
02:27 I drive an E92 M3, a BMW.
02:33 I bought it second-hand, so it was about $114,000.
02:36 Because cars in Singapore are very expensive, that's without a doubt.
02:41 I myself am a fan of cars, so I like cars a lot.
02:43 So despite the price, I will try my best to be able to afford the car that I want.
02:48 To understand why the COE exists, we need to head back to the 90s
02:53 when Singapore first experienced an economic boom.
02:56 As the number of people who could afford cars increased,
02:59 measures were needed to ensure the number of cars in the tiny country
03:02 didn't result in endless traffic jams.
03:05 Road taxes did little to deter people, so the COE came into play.
03:10 It moved the car from a necessity to a luxury, which it remains to this day.
03:15 For some, though, it's a highly practical requirement.
03:19 It's really a necessity mode of transport for day-to-day routine,
03:24 bringing kids to school for tuition,
03:28 and sending the old folks to medical check-ups.
03:32 For others, it's an indulgence.
03:39 Driving to me is a luxury and something that I enjoy.
03:41 It's more like a hobby than just getting from point A to point B.
03:45 I really enjoy her. She's kind of quite precious to me.
03:50 In a way, like a grown man's foolish toy.
03:55 There's another reason COEs exist.
03:59 Singapore today is hoping to transition to a car-light country,
04:03 with an emphasis on walking, cycling and public transport.
04:08 So it's doing everything possible to dissuade the use of cars
04:11 in a bid to be clean and green.
04:14 As we've already said, COEs don't last a lifetime.
04:18 After an initial period of 10 years, the car owner in Singapore has two choices.
04:23 Either pay to renew your COE for a further 5 or 10 years,
04:27 which can be an expensive affair,
04:29 or have your car deregistered,
04:32 which means it either gets scrapped and you get paid for its metal value,
04:37 or it gets exported to another part of the world.
04:39 I scrapped the car and I replaced it with a second-hand car.
04:43 The process was different.
04:45 I was looking at the papers, and when the papers went and deregistered the car,
04:48 I got a call saying, "Please send the export papers."
04:51 Then I realised that it wasn't going to scrap heat, but it was going to the UAE.
04:55 So I guess right now my car has a second life in the desert,
04:59 somewhere in Dubai or something.
05:01 Of course, while that means Singapore keeps its emissions in check,
05:05 the problem simply gets exported.
05:07 The fact that the vehicle is still being operated, used, and driven around in another country
05:15 means that from a planet's perspective,
05:17 the greenhouse gas emissions, carbon emissions will still persist.
05:21 But Singapore is still powering ahead with its Carly plans,
05:26 aided by the likes of Professor Jason Pomeroy and his team of urban planners.
05:34 You can take the bus, you can take the train, you can walk to your final destination
05:37 without having to actually step foot into a car.
05:40 If anything, we should be increasing those taxes on cars,
05:44 which I think is a good thing to keep cars off the street.
05:47 And at the time of filming, the cost of COEs had climbed higher than ever before.
05:52 Today's market, the COE prices are so high.
05:57 A Japanese car will cost you easily about $150,000 to $190,000.
06:04 It's made some Singaporeans reconsider driving.
06:07 Because in the case of my current car, a year and a half ago,
06:11 I was prepared to basically give it up and do what was necessary.
06:15 But at the point of scrapping, this car came available through my repair shop and I picked it up.
06:21 So it gave me another two years of driving and stuff.
06:24 So again, when this car's time runs out at the end of the year, it will be the same thing.
06:31 While others are willing to go to extreme lengths to retain the freedom driving brings with it.
06:36 So other than being a property agent, I do other jobs on the side as well,
06:40 to ensure multiple streams of income.
06:42 I mean, the grass always seems greener on the other side,
06:44 but since I'm born here and the prices here are like that,
06:47 so I guess we have to make do with it.
06:49 But just how much would they shell out for a COE?
06:52 As long as I can afford it.
06:55 Oh, that is something that I've not really given so much a thought about.
07:00 So I think that question is a little bit hard for me to answer right now.
07:04 We'll just have to see how it turns out in the future.
07:09 In the meanwhile, like many other Singaporeans,
07:13 Rev's Julian Chan relies on public transport and ride-sharing services to get around her home country.
07:19 her home country.
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