The super pricey city-state has made the prospect of owning a car far more expensive than it already was.
Owning a car in Singapore, long regarded as one of the world’s most expensive places to do so, has always been a symbol of luxury and status. However, the price tag for this symbol has now reached unprecedented heights.
Prepare yourself for some serious sticker shock.
According to CNN Asia, a 10-year Certificate of Entitlement (COE), a mandatory license that individuals in Singapore must secure before they are even eligible to purchase a vehicle, currently commands a staggering minimum fee of just over RM359,000 (or S$104,000), and that doesn’t include the price of the car. This fee must be paid merely to have the right to buy one. Even more astonishingly, the minimum cost of a COE is over four times what it cost just two years ago, as reported by the Land Transport Authority.
It’s also important to note that this hefty sum only grants the privilege to acquire a standard Category A car, typically defined by a small to medium-sized engine of 1,600cc or less. If one desires a more substantial or extravagant vehicle, such as an SUV, they must be prepared to shell out RM504,122 (S$146,002) for the Category B license, which is a significant increase from the previous fee of about RM355,300 (S$140,889).
And the expenses don’t end there. Prospective car owners must also factor in the cost of the vehicle itself, along with the usual expenses of car ownership such as maintenance, repairs, insurance, tolls, and parking.
Singapore’s COE quota system, introduced back in 1990, was intended to mitigate traffic congestion and curb emissions in this densely populated city-state, which is home to 5.9 million residents. Fortunately, Singapore boasts an impressive and very comprehensive public transportation network, so driving around the city isn’t as much a necessity as it is a nicety.
Not surprisingly, the quota system has effectively rendered car ownership wildly unattainable for the average Singaporean, with the median monthly household income in 2022 standing at just under RM35,000 (S$10,099), according to the Department of Statistics.
While that figure no doubt sounds tantalising to almost anyone working in Malaysia, it’s important to recognise that Singapore’s cost of living is breathtakingly high. Also, note that that number is a median income, not an average, meaning that half of Singapore’s households earn less, while half earn more.
Ricky Goh, a Singaporean car dealer, expressed his shock at the exorbitant price hike of the COE, remarking to CNN Asia, “Sales have already been poor. This latest development will further exacerbate our business woes.”
Wong Hui Min, a mother of two, shared her concerns about how this increase could affect her family’s mobility. “I rely on my car for numerous tasks… shuttling my children to and from school, taking them to extracurricular activities like swimming lessons and tuition. I can’t rely solely on taxis or ride-sharing services; it’s just not practical,” she explained.
“Singaporean families often need to save for years to afford a car that serves their needs,” Wong added, voicing concerns about the long-term affordability of car ownership.
For many, this announcement marks yet another financial blow in a city that consistently ranks as the world’s most expensive. Residents complain that living in Singapore has become increasingly unaffordable in recent years due to persistent inflation, soaring housing costs, and a sluggish economy.
However, proponents of the COE quota system argue that it has spared Singapore from the traffic gridlock that plagues other Southeast Asian capitals like Bangkok, Jakarta, and Hanoi. They also point out that those unable to secure a Certificate of Entitlement have access to Singapore’s extensive, reliable public transport system.
Indeed, with prices like these just for the right to even purchase a car, it’s little wonder that ridership for Singapore’s public transportation system is so high, with an average of 6.4 million passenger rides a day reported in 2022.
For those Singaporeans who still desire personal mobility, there’s an alternative: motorcycles. Permits for motorbikes are a relative bargain, though by no means cheap, priced at RM37,485 (S$10,856).
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