COE prices are out of control
the original idea for COE was to limit the number of cars on the road but it doesnt work anymore
how else can we implement an effective way in place of COE?
It is working as intended. Free market principles of pricing inelasticity and supply and demand.
#1)
If you want to control vehicle population strictly , how do you do it?
you issue a QUOTA via a paper certificate.
If they determined singapore infrastructure can hold 1.2 million vehicles on the road.
They will issue 1 million COEs to keep the registered singapore vehicles and cater for 200k foreign vehicles entering singapore. (assumption of # vehicles.)
So we need to have 1 million COE paper certificates.
#2) Then the govt decides - we don't want too many old vehicles on the road that might lead to frequent breakdowns that jam the road and caused pollution
So the COE paper certificate needs to have a time period so owners have to relinquish and get a NEW Car.
So the COE paper certificate now has a 10 years validity period.
#3)
Then the question is .. how do we allocate the paper certificate effectively??
1) Ballot
2) Bid
3) Needs Basis
Then the govt have to ask, what outcome do we want to achieve?
A) If you are purely into just recovering cost of implementaiton of COE paper registrations, you can do
Ballot. and ask the successful ballot to pay for the cost of COE administration (which might be $10,000 for the 10 years to maintain IT systems and the human resources behind the ops and implementation of COE).
B) if you are going on a Needs basis, how do you determine the needs that require a car?
The conditions for these to cater to all scenarios are too onerous and complicated and vague that it is nearly impossible to implement.
apart from the obvious public goods needs like taxis, buses etc. These are special conditions because 1 public good is serving the needs of many vs private car ownership.
C) Bidding - Market principles and based on motivated buyers. Are you motivated enough to get it if there's alternatives for you to get to your goals? (ie, do you really desperately need/want a car enough even though you have public transportion options available - nevermind your elderly, handicapped ,children, etc scenarios. )
So end up Option C is decided to be the most fair and effective way to distribute COEs.
And you cannot escape it, once you endorsed market principles and capitalism, it is always the one with most money who gets the preferred options.
Landed vs Condos vs HDB and you can go into the different sizes and locations. But all is about how much money you have and how motivated you are to get at that location, size, attributes.. Of course.. everyone can denied it, but I opined VIPs (if competing with non-VIPs who is willing to pay the same amount for that limited quantity) always will have better access to the most preferred options if it comes to crunch time.
It is not that the VIP demands preferential treatment, it is the supplier of goods that might be more willing to give priority and preferential treatment to the VIP over the non-VIP for access to the goods (given seller has only limited quantity but over-demand by VIPs and non-VIPs).
examples of it will be like your club entry (within it also got VIP over non-VIP for the rooms), hot resturant booking (same here- VIP over non-VIP for rooms etc) , new condo/landed launch bookings etc etc.
Anyway, a few years back... i arleady did an analysis of the number of millionaires/high income earners etc in singapore vs available COE quotas for passenger vehicles (not the whole car population of taxis/buses etc)...
and my answer ... (pre-covid) was .... around $200,000 per car (include COE paper) .
So post-covid, inflation has driven cost of living up at least 50% ...
so car can possibly be priced at $300,000 per car (including paper).
