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History Of The COE, And How It Has Evolved Since 1990

There used to be 7 COE categories.

The Certificate Of Entitlement, commonly known as COE, was introduced on 1 May 1990 to help manage the fast-growing car population in Singapore. Prior to the introduction of the COE system, the growth rate of the car population was a high as 12% per annum.

Over the years, the COE system has evolved to serve the needs of Singapore better. In this article, we explore some of the major changes made to the COE system over the past three decades.

1991: COE Can No Longer Be Transferred

When the COE system was first launched, for a short while, COE could be transferred from one person/company to another. This led to speculators, who could bid for a COE (or multiple COEs) with the aim of selling/transferring their COE at a higher price to another individual or company that needs the COE.

To stop people from making money through COE trading, since October 1991, COE has mainly been non-transferable. Today, one can only transfer COEs in Categories C and E once if you bid for them as an individual.

1999: From 7 Categories To 5

When COE was first introduced, there was a total of 7 categories. The categories were as follows.

Cat 1 1000 cc & below
Cat 2 1001 cc – 1600 cc & Taxis
Cat 3 1601 cc – 2000 cc
Cat 4 2001 cc and above
Cat 5 Good Vehicle & Bus
Cat 6 Motorcycles
Cat 7 Open

There was also Cat 8 for weekend cars, which was added in July 1991.

From May 1999 onwards, the categories were reclassified to the current 5 categories that we are familiar with today.

  • Cat A & Cat B are for cars,
  • Cat C is for Goods vehicles and buses,
  • Cat D is for motorcycles
  • Cat E is the open category for all (except motorcycles).

2002: From Closed Bidding System To Open Bidding System

Before April 2002, the COE bidding system was a closed bidding system. This meant bidders would not know how much others had bid. However, as one would imagine, the closed bidding system provides a less efficient outcome as bidders do not know what others have bid, or how many bidders were there.

As such, from April 2002 onwards, the COE open bidding system replaced the closed bidding system. This is still the system we have today when live bidding results are shared by LTA on its website.

2010: The Revised Off-Peak Car (ROPC) Scheme

From 1 May 1991 to 30 September 1994, the Weekend Car (WEC) scheme was in place. Under the WEC scheme, new car buyers who opted for the WEC scheme were given a full rebate of the net Additional Registration Fee (ARF), import duty and COE, up to a maximum rebate of $15,000. In addition, the road tax payable was 30 percent of the annual road tax of a normal car of the same capacity.

According to information shared by NLB, the loophole with the WEC is that certain car owners, especially those with larger capacity cars, managed to earn huge savings on road taxes and lower COE prices by buying and registering larger weekend cars, and then purchasing the $20-per-day special license that allowed them to use their cars throughout the day. This is because the WEC does not cap the road tax savings that a driver can enjoy, only that they pay just 30% of the regular road tax for the car.

Thus the WEC scheme was changed to the Off-Peak Car (OPC) scheme. From 1 October 1994 to 25 January 2010, the OPC scheme allowed car owners to receive an upfront rebate of $17,000 when purchasing their car, in addition to a $800 flat discount on annual road tax subject to a minimum road tax payment of $50. This means in total, the OPC scheme is worth $25,000 over a 10-year car ownership period. In return, OPC cars are only allowed to drive from 7 pm to 7 am on weekdays, after 3 pm on Saturdays, and all day on Sundays and public holidays.

From 25 January 2010, the OPC scheme was further tweaked to become the Revised Off-Peak Car (ROPC) scheme, which aimed to encourage drivers to join the scheme and ease congestion around the island. The ROPC scheme allowed more unrestricted time on the road – all day Saturday and the eves of five major public holidays.

The upfront rebate of $17,000 was still offered to new ROPCs and regular car owners who converted to the ROPC scheme were now entitled to further cash rebates of up to $1,100 every six months until their cars reached 10 years of age. This meant that such ROPC converts could receive cash rebates earlier instead of waiting until their vehicles were scrapped. All ROPCs also enjoyed a flat discount of up to $500 on annual road tax, subject to a minimum road tax payment of $70.

Read Also: How Much Can You Save When You Buy An Off-Peak Car (OPC)?

2012: Taxis No Longer Part Of The COE Bidding Process

Prior to August 2012, taxi companies had to bid for their COE similar to regular private vehicles. However, since August 2012, taxi operators do not have to bid for a COE to register their taxis. Instead, they draw from the pool of Category E (Open) COEs and pay the Category A COE prevailing quota premium.

Read Also: COE Prices Continue Increasing. But Should Anyone Really Be Surprised?

Top photo by Moo Kar Ming, DollarsAndSense

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