COE Watch: Cars are becoming so unaffordable that it is a blow to youth’s aspirations
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(From left) Mr Say Kwee Neng, veteran automotive consultant, Mr Lee Nian Tjoe, ST senior transport correspondent, and Associate Professor Raymond Ong from NUS discussed the affordability of cars.
ST PHOTO: CHONG JUN LIANG
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SINGAPORE – The number of car buyers aged between 25 and 34 has dropped by 10 per cent compared with a decade ago. At the same time, the proportion of car buyers who are borrowing more than 50 per cent of the car value has risen by 11 per cent in the same period.
Mr Say Kwee Neng, a motor trader-turned-consultant, cited the data from a mass-market car dealership on the latest episode of the COE Watch podcast, which discusses the affordability of cars today ( str.sg/podcast-car-ownership
Also on the podcast was Associate Professor Raymond Ong from the National University of Singapore, who said his students are prioritising affording their Housing Board flats over buying a car.
“I can foresee that in the next five years, this is going to continue because the pressure is on purchasing a house after graduation... going to get married... this will always be there,” Prof Ong said.
In an article published by The Straits Times in August, Prof Ong wrote that the rise in median household income from 2013 to 2023 was greater than the increase in the price of the certificate of entitlement (COE).
Still, the COE, which is needed to register a new car in Singapore, takes up a significant chunk of the cost of buying a car here.
In the first nine months of 2024, the average price of a Category A COE, typically used to register mass-market cars, was $88,078. While this is lower than 2023’s average of $94,538, it is still higher than 2022’s average of $75,808.
The price of a mass-market model like the Toyota Corolla Altis today is $167,888 with COE, $23,000 higher than what it was in 2022.
Recounting a conversation he had with a young adult who claimed to have no interest in cars and COEs as he believed he would never be able to ever afford them, Mr Say said: “This sort of defeatism when it comes to chasing after your life goals is dangerous. One of the things that keep an economy churning is that you have goals, you have dreams, you have ambitions, you drive for it.”
A new episode of COE Watch is released every third Tuesday of the month featuring expert insights on vehicles and transportation trends.
