The Straits Times
Published on Feb 02, 2013

Restrict financing to lower COE prices


THE current high prices of certificates of entitlement (COEs) and resultant high vehicle prices are due largely to the availability of financing.

If financing is restricted, there will be less aggressive bidding as not many people can fork out $90,000 in cash ("Open COE price nears $100k but others dip"; Jan 24).

This can be done by banning unsecured financing and restricting the trade-in value, the financing of the vehicle without COE and the financing of COEs.

There may be adverse effects on businesses like finance companies, and individuals such as those who need the vehicle badly but do not have liquidity.

However, the benefits of this scheme far outweigh the disadvantages. Lower COE prices will mean lower transport costs, and businesses and individuals will spend less in repaying their loans.

Ong Eng Joo