Reasons for Increase in COE Prices and Number of Motorcycles Deregistered

Mr Saktiandi Supaat asked the Minister for Transport (a) what are the new drivers for the recent increase in COE prices for motor vehicles and motorcycles; (b) to what extent are these drivers cyclical and non-cyclical in nature; and (c) at present, how many motorcycle owners have de-registered their motorcycles without renewing their COEs.

I thank the Member for the question. Mr Louis Chua has filed a related question for a subsequent Parliament Sitting. I will also address his question in my reply.

In land-scarce Singapore, along with the need to control traffic congestion, we limit our vehicle population and allocate the quota through the Vehicle Quota System, where bidders bid for a Certificate of Entitlement (COE) to register a vehicle. As the vehicle growth rate has been 0% per annum since 2018, the supply of COEs is primarily determined by the number of vehicles deregistered. COE prices reflect the demand and supply for vehicles. Since motor showrooms and vehicle dealerships reopened in June 2020 after the circuit breaker, the demand for all vehicles and, by extension, COEs, has been strong. At the same time, COE supply has decreased over this period due to a lower number of vehicle deregistrations. As a result, COE prices have been increasing.

As some industry watchers have highlighted, there is a cyclical pattern behind COE supply since most vehicles tend to be deregistered closer to the end of their 10-year COE lifespan. The COE supply for cars was last at its lowest in 2013.

The Member also asked about the number of motorcycle owners who have deregistered their vehicle, without securing a new COE. As with other vehicles, there is turnover in the ownership of motorcycles. This could be due to a variety of factors, including changes in commuting patterns and needs, or a decision to lease rather than buy.