Owning a car in Singapore has become a luxury reserved for the affluent, as the cost of a “certificate of entitlement” (COE) has surged to over $106,000 (S$145,000). This cost is now equivalent to the price of four Toyota Camry Hybrids in the United States. The sharp increase in COE prices is attributed to a post-pandemic economic recovery, driving the cost of Singapore’s vehicle quota system to record highs.
Singapore employs a 10-year COE system introduced in 1990 to manage the number of vehicles in the small city-state, which boasts a population of 5.9 million and can be traversed in under an hour. The COE is obtained through a competitive bidding process, making Singapore the world’s most expensive city to purchase a car. The cost of a COE for a large car has more than quadrupled from 2020 prices to a staggering S$146,002 ($106,376.68).
When factoring in COE, registration fees, and taxes, a new standard Toyota Camry Hybrid now commands a price tag of S$251,388 ($183,000) in Singapore, compared to $28,855 in the US. Remarkably, a small, government-subsidized flat in Singapore costs approximately S$125,000.
In 2020, during a period when fewer Singaporeans were driving, COE prices dipped to around S$30,000. However, a resurgence in economic activity following the COVID-19 pandemic has driven up car purchases, even as the total number of vehicles allowed on the roads remains capped at approximately 950,000. The availability of new COEs depends on the number of older cars being deregistered.
The soaring prices have made car ownership unattainable for many middle-income Singaporeans, impacting the “Singapore dream” of upward social mobility. Sociologist Tan Ern Ser noted that this dream often includes having financial stability, a condominium, and a car. The median annual household salary in Singapore stands at S$121,188.
Facing persistent inflation and a slowing economy, some Singaporeans are selling cars they purchased when COE prices were lower to turn a profit. Tan Ern Ser suggests that there may be a need for individuals to adjust their aspirations from achieving the “good life” to settling for a “good enough life.”
Jason Guan, a 40-year-old insurance agent and father of two, reflects on his own experience. He bought his first car, a Toyota Rush, for S$65,000 in 2008, including the COE price. Now, Guan has chosen to live without a car, focusing on other benefits that Singapore provides for his family.
“As a family man, it doesn’t affect me much as Singapore still has a good and stable education system. In terms of security, it’s still one of the safest countries,” he said.
Carlo Juancho FuntanillaFrontend Developer, WordPress, Shopify
Contributing Editor
AMA ACLC San Pablo
