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If you plan to buy a car (even a pre-owned car) in Singapore, you cannot avoid the COE (Certificate of Entitlement). It is part of the car price you have to pay. But many people find it hard to understand the COE price, as shown above.

So, instead of a lengthy explanation which usually causes more confusion, I think these 10 questions can help you understand COE price fluctuations easily.

Is COE an investment or a disposable product?

COE (Certificate of Entitlement) is definitely NOT an investment, although the price fluctuates as stocks do.

The value of your COE depreciates from the day you register the car. Each day, you lose about 0.027% of the COE price you paid. Every COE shares the same depreciation rate, but not the absolute value, obviously. So, some car owners lose more money each day than others.

For example, if you get the COE at the price of $30000, you will lose $8.1 every day. If you got it at $60000, congratulations, you lose about $16.2 per day.

After 10 years, the value of all COEs, regardless of your cost of getting the COE, will be $0.

So, COE is not an investment.

In fact, COE is a disposable product:

It can only be used for up to 10 years.
It can only be used once.

Can I buy a second-hand COE?

One COE can and MUST be tied to one car only. In other words, once used, the COE becomes an essential part of the vehicle.

So, you cannot sell a COE without selling the car. Similarly, you cannot buy a second-hand COE without purchasing the car.

For this reason, there is a market for second-hand cars in Singapore. But there is no market for second-hand COEs.

An imported second-hand car needs … Read the rest

The breakdown of the car cost in Singapore

According to the Worldwide Cost of Living Report 2018 by the Economist Intelligence Unit, Singapore has held the title of the most expensive city for the fifth straight year since 2014. The top factor contributing to Singapore's ranking is the cost of car ownership.

Singapore is the most expensive place in the world to buy a car (and maintain a car), thanks to its successful car control policy. When you plan to buy a car, it is important to understand the breakdown of the car price you have to pay. If you are a foreigner and hold a foreign driving license, you need to convert your foreign driving license to Singapore driving license after 12 months.

As a highly populated city-state, Singapore cannot afford a massive traffic jam. So the government invested billions of dollars each year in the public transportation system to make it affordable, reliable (decreasing in recent years), accessible and efficient.

For car ownership, the Singapore government fabricated a complicated, fair, and effective car regulation system. Since 1990, the Certificate of Entitlement (COE), complemented with tax and duties, has been introduced (and tweaked) to regulate the demand, and Electronic Road Pricing (ERP) to regulate road usage.

Today, when you pay the “purchase price” to the car dealer, less than 25% of the price is the actual car value. In simple words, for the same money you paid, you probably can buy 3-4 identical cars in the US.

So, why a car in Singapore is so expensive?

When you buy a car, you are not paying only for the car. The purchase also includes at least the following 10 items: