Owning a car in Singapore is no longer just a dream but also a significant financial commitment. Now, to obtain a "Certificate of Entitlement" (COE), a document required for vehicle ownership in the country, you must be prepared to pay a substantial amount.
To own a car in this country, you need to dig deep into your pockets, with a sum of $106,000 required. This amount is equivalent to the price of four Toyota Camry Hybrid cars in the United States, and all of this has happened because the vehicle quota costs in Singapore have reached an all-time high, despite the impact of post-pandemic recovery that has escalated the expenses.
This city-state has long implemented a 10-year COE system since 1990 as a way to control the number of vehicles in this compact region with a population of approximately 5.9 million. This quota system, offered through an auction process, has made Singapore one of the most expensive places in the world to own a car.
In fact, COE prices for larger vehicles have skyrocketed incredibly, increasing over fourfold from 2020, reaching an unexpected record of $106,376.68 on Wednesday, October 4.
Undeniably, the costs of owning a car in Singapore, including registration and taxes, have reached staggering levels. For instance, to own a standard Toyota Camry Hybrid in the country, you need to prepare a sum of $183,000, nearly six times the price in the United States, which is only $28,855. This drastic increase has made the car purchase price double the government subsidy for fuel-efficient vehicles in Singapore.
In 2020, COE prices had dropped as there were fewer drivers in Singapore, only S$30,000. However, the post-Covid economic activity surge has led to a spike in car purchases, while the total number of allowed vehicles on the roads remains limited to approximately 950,000. Availability of new COEs depends on the number of old vehicles deregistered.
The extremely steep rise in prices has pushed the dream of car ownership further out of reach for many middle-class Singaporeans, shaking their aspirations to achieve the "Singapore Dream" that involves upward social mobility, including cash ownership, condominiums, and cars. With the average annual household income in Singapore being S$121,188, economic challenges are increasingly weighing on the population.
Rising inflation and slow economic growth have added extra pressure to the people in Singapore, who are now compelled to sell the cars they bought at lower COE prices to seek profit. In this context, financial well-being in Singapore is undergoing significant changes.