Middle-income group being priced out of car market
WHILE I fully understand the need for the certificate of entitlement (COE) to regulate the supply of cars on the road ("COE system is working fine" by Mr Jack Lin; yesterday), the current bidding process has priced out many people, even the middle-income group ("Cooling measures needed for cars" by Mr Chew Eng Soo; yesterday). This, in turn, will aggravate the rich-poor divide.
I suggest that the COE price be tied to the annual income of the car owner. The current COE categories based on engine size can stay, but within these tiers, we could create these categories based on the average annual income of the owner:
1. Above $20,000 up till $36,000
2. Above $36,000 up till $60,000
3. Above $60,000 up till $84,000
4. Above $84,000
I propose that owners in the fourth category pay the full 100 per cent of the prevalent COE price, owners in the third category pay 70 per cent, followed by those in the second and first categories paying 50 per cent and 30 per cent respectively.
We could also put in another category restricting the ownership of cars for permanent residents and foreign workers.
To prevent the abuse of the enterprising individual, when the owner of, say, Category 1 intends to sell his car, the COE price will be refunded based on how much he paid for the COE minus the amount of per day usage. For the buyer of the car, the amount he pays for the COE will again be tied to the prevalent COE price when the car was purchased, and his annual income on the date of purchase.
Goh Juanq Long