If you thought that owning and running a car was getting expensive in Australia, it’s nothing compared to Singapore. The price tag for the privilege of owning a vehicle in Singapore now starts at a jaw-dropping $120,000, and it’s all due to the city-state’s 10-year Certificate of Entitlement (COE), a mandatory license for prospective car buyers.
As of recent figures from Singapore’s Land Transport Authority, the basic COE option now commands a staggering price of $119,600 (or 104,000 Singapore dollars). This cost is more than four times what it was in 2020.
This substantial sum only grants the right to buy an ordinary Category A car with a small to medium-sized engine of 1600cc or less. Imagine that, paying a fortune just for the privilege to own a Toyota Corolla or its equivalent.
If Singapore residents have their hearts set on something larger, such as an SUV, they must be prepared to dig even deeper into their pockets. The Category B license group, which covers larger vehicles, demands a hefty $167,900 (or 146,000 Singapore dollars).
This policy was introduced in 1990 in an attempt to minimise traffic and reduce emissions.
What makes this licensing system even more surreal is the way it operates. Instead of a straightforward application process, the COE is acquired through a bidding system. Prospective car buyers essentially compete with one another to secure the right to own a vehicle, and this competitive bidding environment has driven the prices sky-high.
The soaring costs associated with COEs have effectively placed vehicle ownership out of reach for a significant portion of Singapore’s residents. To put this in perspective, the median household income in Singapore in 2022 was $11,610 (or 10,099 Singapore dollars) per month.
According to Julius Baer’s Global Wealth and Lifestyle report, cars in Singapore are a staggering 133% more expensive than the global average, while essential insurance costs are 109% above the global norm.
Despite the prohibitive costs of car ownership, Singapore boasts the third-largest population of millionaires per capita globally. A remarkable 12.7% of adults in Singapore are classified as millionaires, trailing closely behind Switzerland (15.5%) and Hong Kong (15.3%).