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Everyone knows what COE stands for - Certificate of Entitlement. But do you know how the bidding system works? Here's a simple guide to understanding COE.
Category: Miscellaneous Advice
Understanding how the Certificate of Entitlement (COE) system works is the first hurdle you'll have to clear before you even consider buying a car. Purchasing your first car in Singapore is not cheap and you will not want to blindly throw money away just because 'Your friend is buying one'.
Once you've grasped the idea of how it works, you'll be able to break down the listed price of cars based on their individual plus points and make an educated and most importantly sound decision on whether you should buy or wait it out.
Here's a simple guide crafted for you to understanding COE without overclocking your biological CPU.
Certificate of Entitlement (COE)
If you want to register a vehicle in Singapore, you'll have to have a COE. The prices of COEs are driven by supply and demand. Meaning if there's a high demand for vehicles, COEs will cost much more and vice versa.
COEs allows you to drive the vehicle on the roads for a period of 10 years. At the end of the 10 years, you can opt to renew your COE for another five or 10 years by paying the Prevailing Quota Premium (PQP).
PQP is calculated based on the moving average of the COE in the last three months. COEs which have been renewed for a period of five years are not eligible for another renewal and will have to be de-registered after they expire. Otherwise, there is no limit to the number of times for renewal.
How do you get one?
To get a COE, you'll have to bid for it like in a digital art gallery auction. Bidding exercises occur twice a month, so you don't have to worry about missing out. Keep a close eye on the Land Transport Authority's (LTA) website as they will announce the vehicle quotas (the maximum number of vehicles that can be registered) prior to every bidding exercise.
Things to take note of when you bid
1. Make sure you have at least $10,000 in your bank account. Once you place your bid, it gets siphoned off immediately. However, if your bid is eventually unsuccessful, it'll be credited back into your account
2. Set a reasonable reserve price (the maximum amount you're willing to pay for your COE). If the then COE price exceeds your reserve price, you must alter your reserve price or you're out
3. Every time you revise or alter your reserve price, there are administrative charges to be accounted for (ranges from $2 to $10)
4. The bidding period lasts for three days and generally people become more aggressive with their bids toward the end of the bidding window