Allowing shorter-term renewals will likely amplify peak and trough of COE cycles: Jeffrey Siow
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Acting Transport Minister Jeffrey Siow said that besides the needs of existing owners, the interest of those who want to buy a new car also needs to be considered.
ST PHOTO: CHONG JUN LIANG
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- Shorter COE renewals may worsen COE supply peaks and troughs, reducing availability for new car buyers, according to Acting Transport Minister Jeffrey Siow.
- Currently, five-year COE renewals are permitted, balancing the needs of existing and prospective car owners, but cannot be further extended.
- Commercial vehicle owners can renew COEs for five-year periods, ensuring fair competition for new businesses needing vehicle access.
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SINGAPORE - Allowing the renewal of certificates of entitlement (COEs) for shorter periods than the current five or 10 years will likely amplify the peaks and troughs of the COE supply cycle and reduce the quota available for prospective car owners, said Acting Transport Minister Jeffrey Siow.
He was responding in Parliament on Jan 14 to a question by Ms Poh Li San (Sembawang West) about whether shorter-term COE renewal of one or two years could be considered as a potentially more affordable option for owners to use their vehicles beyond 10 years
A COE allows a vehicle to be used for 10 years. The price to renew is the moving average of COE prices over the preceding three months. In 2025, a 10-year COE renewal cost between $92,064 and $116,000.
Mr Siow said: “We understand the concerns of existing car owners who wish to renew their COEs. However, we need to balance their interests with those who wish to buy a new car.
“Today, we already allow existing car owners to renew COEs for five years as a concession. If we allow for shorter renewals, it’s likely to amplify the peak and trough of the COE cycles further. It would mean that more car owners will renew their COEs when prices are high, and this would reduce the supply of new COEs for prospective car owners. So we will not make this move.”
While a five-year renewal costs half as much as a 10-year renewal, the COE cannot be extended further. When the five-year period lapses, the car must be deregistered and the COE returned to the pool for bidding.
Shorter renewal periods could amplify the peak and trough of the COE cycles because more car owners would deregister their vehicles when COE prices are low, or renew their certificates when prices are high.
Under the current policy, the main determinant of COE supply is the number of vehicles that are deregistered in the previous four quarters.
Ms Poh asked if shorter-term COE renewals could be permitted for commercial vehicles to help small-business owners, such as hawkers, avoid the heavy cost of renewals to keep their vehicles on the road.
Mr Siow said he fully understands the pressures small businesses face in an environment of high COE prices. He noted that commercial vehicle owners can already renew COEs for five-year periods repeatedly until the vehicle reaches its statutory lifespan.
“It is something that, I think, is fair because you also want to allow new businesses that wish to have access to vehicles to be able to compete for COEs. And I think the better approach is for them to be able to bid in the same market, and for the COE to be priced accordingly,” he said.
