How COE Affects Car Prices in Singapore

How COE Affects Car Prices in Singapore

When car prices are expensive, the property price will be more affordable (usually…)

Why is this the case is simple. The total amount in the salary is the same. If one uses a huge portion of it for a property then the amount remaining for a new car becomes smaller. If one prefers a car in this case, then of course the amount remaining for a new property will become smaller. So, it’s always a tussle between buying a car first and push back property buying or buying a property first and think of how to make-do without a car, at least for a while.

Else, maybe buy a cheaper model or buy a second-hand car instead. There are some countries where both the property and the car ownership is expensive. Hong Kong for example, even buying the car parking space alone could already reach HK$2 million. So, owning a car is also very expensive because parking it will be very expensive. In Singapore, homes are considered affordable especially because it’s built by the government for the citizens by the Housing Development Board (HDB)

How much do we need to pay to own a typical EV in Singapore?

Well, the amount really depend on the demand for the Certificate of Entitlement (COE) which is the amount to be paid before one could proceed to buy a car in Singapore. This COE is on top of car price. As an example, Proton e.MAS 7 price in Singapore is SGD175,988 (about RM577k) after including the COE. This price is actually on the high side even if one is working and earning SGD.

The median salary in Singapore is SGD5,197 (Source: quicker.co) A HR Manager in Singapore could earn up to SGD7,000 and even at this salary, the price of this e.MAS 7 is still considered on the high side. There’s a silver lining though. It seems that COEs are falling. Maybe due to less demand, thus the bidding price for COE has dropped. Take a look at the latest news below:

Article in malaymail.com Certificate of entitlement (COE) premiums in the city-state came down across the board today, with the price of certificates for smaller cars falling to $110,002 and that for larger cars to $115,001.

This is the second consecutive tender exercise where premiums for COEs used to register cars fell, according to The Straits Times.

Category A COEs, meant for smaller and less powerful cars and electric vehicles (EVs), reportedly dropped to $110,002 (RM461,128) — 9.8 per cent lower than the $122,000 at the previous exercise.

The price of Category A COEs has been edging up since the first tender exercise in June, hitting a record of $128,105 at October’s first tender. Article in malaymail.com

I know, public transport is cheap and easy

I have been to Singapore many times and I can agree fully that with the public transport, one could get to anywhere they want to go. There could be some walking involved but basically one could go anywhere. However if you ask me, the reason to own a car is because if one has a baby, then taking the public transport together with the stroller and then the shopping bags etc would be a little cumbersome.

I also know that if such shopping trips with the baby is not frequent, then calling for GRAB is cheaper. Just need to plan the time in this case because everyone knows the reason why prices are expensive during peak hours is because there are not enough drivers. So, this could still be an inconvenience to many people and situations too.

I still prefer to have both options so that I could have both

We can debate all we want but the truth is, when it comes to Klang Valley, the public transport is covering enough places that we could go to anywhere we like. The only issue is that Malaysians hate walking and prefers to drive instead. Just need to remember that even in Singapore, the train does NOT stop at everyone’s doorstep too.

Then… the car prices are still so cheap. No, I cannot say cheap, later I will get lots of complaints. Maybe can say it’s remains affordable for the typical working professional. A new Proton Saga is merely RM34,800 onwards. (By the way, new Saga will be launching very soon yeah, so maybe can wait and see what’s the price before ordering the older model)

Happy deciding!

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