Can middle-class Singaporeans ‘afford it all’ as record high COE prices dash car ownership dreams?

The price of a permit to own a car in Singapore – a certificate of entitlement (COE) – ranges from US$77,000 to US$102,000 and excludes the cost of a car

High COE prices are puncturing hopes of car ownership for young, middle class families who still aspire to own a car, especially if they start a family

Reading Time:3 minutes

Cars for sale are parked at used car dealerships in Singapore. Higher COE prices continue a trend that has seen such values exceeding S$100,000 in the last 12 months. Photo: Reuters

Published: 6:45pm, 22 Sep 2023Updated: 6:46pm, 22 Sep 2023

Middle-class Singaporeans seeking to own a car are likely to have to park their aspirations for at least the medium term, as the permit to own a vehicle surges past US$100,000 – more than double the nation’s median annual income.

That price, for a certificate of entitlement (COE) – a unique market mechanism to control the vehicle population in the land-scarce city state – now stands at S$140,000 (US$102,000) for larger cars.

The latest figure, released this week, continues a trend that has seen COE prices hovering over S$100,000 in the last 12 months.

The permit to own a small car, which has a maximum of 1,600CC, now costs S$105,000, eclipsing the last record high of S$103,721 in April. The same certificate for a small car, valid for 10 years, cost S$37,000 in September 2020.

While Singaporeans have long griped about COE prices, many begrudgingly accept it is an effective way to prevent traffic jams and smog from building up, as seen in neighbouring capitals. Jakarta, for instance, was recently ranked to have the world’s worst air quality due to persistent congestion.

But the startling spike in Singapore’s car-permit prices since July 2020, and the unlikelihood of any cooling in the medium term, has been cause for disillusionment for aspiring car owners among the republic’s millennial and Gen Z population.

Despite having one of Asia’s most efficient public transport networks, it has been a norm for middle-class Singaporean couples to aspire to own a family car, especially if they have children.

Vehicles on the Benjamin Sheares Bridge in Singapore. Although the city state has one of Asia’s most efficient public transport networks, many middle-class couples aspire to own a family car. Photo: Reuters