SINGAPORE - The current COE system which allows both car dealers and individual car buyers to place bids remains the most flexible way to carry out the bidding system, said Senior Minister of State for Transport Josephine Teo in Parliament on Thursday.
In 2013, the Land Transport Authority had considered banning dealers from bidding for COEs, and adopting a pay-as-you-bid model but felt it was better to stick to the current model, said Mrs Teo.
Mrs Teo's was responding to a question by Member of Parliament (Pasir Ris-Punggol GRC) Gan Thiam Poh on whether the current model could be revamped.
She said that views on banning dealers from bidding were mixed, as some car buyers felt that bidding for COEs on behalf of buyers was a convenient service provided by dealers.
"Some also pointed out that such a ban could be easily circumvented, for instance, by the buyer providing personal details to the dealer to bid on his behalf," said Mrs Teo.
Mrs Teo added that banning dealers from bidding would not lower the price of COEs as the dealers' bids were ultimately a reflection of the underlying demand.
Mr Gan also asked if a pay-as-you-bid system might work better, to this Mrs Teo said the current system "incentivises bidders to bid their true valuation", and was the most efficient allocation mechanism.
She pointed out that 80 to 90 per cent of successful COE bids currently fall within 5 to 10 per cent of the final COE price.
"Under an open Pay-As-You-Bid system, bidders are in fact likely to have to spend more time and transactional costs monitoring the bidding and adjusting their bids incrementally," she added.