What are COE Quotas?
COE quotas is a regulation by the Land Transport Authority to control the number of vehicles on Singapore’s roads. The official term they use is Vehicle Quota System (VQS).
The LTA controls the number of new vehicles allowed for registration through a quota on the COEs.
Anyone who wishes to register a new vehicle in Singapore must first obtain a Certificate of Entitlement (COE), which represents the right to own a vehicle for 10 years. After that, you can pay to renew the COE for another 5 – 10 years (see Prevailing Quota Premium below).
The VQS classifies vehicles into five COE categories:
|COE Category||Type of Vehicle|
|Cars with Engine Capacity up to 1,600cc (1.6 litres) and Maximum Power of 130bhp|
|Cars with engine capacity above 1,600cc or Power above 130bhp|
|Goods Vehicles and Buses|
|Open (for any other kind of vehicle)|
Source: Land Transport Authority
How are the COEs Allocated?
Without having to go into detail on how the quota is determined COEs are allocated through a COE Quota Premium (QP).
The market determines the prevailing COE prices under each category through an open bidding process, where car buyers bid against each other to win COEs. This exercise is conducted twice a month.
Here’s how it works:
- It starts when bidders submit their reserve price in the open bidding system.
- The reserve price is the maximum price the bidder is willing to pay for the COE.
- The bidding system then automatically raises the Current COE Price (CCP) upward, by increments of $1.
- When the CCP exceeds a bidder’s reserve price, that bidder loses his/her chance of getting a COE.
- The CCP keeps rising, and stops once the number of bidders still in the running equals the number of available COEs.
- The bidding exercise then ends, and whoever’s still in the running is determined as a successful bidder.
The latest CCP (whatever amount on the dollar it ends on) is called the Quota Premium (QP). All successful bidders in the same category pay the same quota premium and get to own the vehicle for 10 years.
Renewal of COEs
After 10 years, do not need to participate in the open bidding for a COE renewal. To renew the COE for your existing vehicle for another 10 years, pay the Prevailing Quota Premium (PQP). To renew the COE for another 5 years, pay 50% of the PQP.
PQP refers to the price required to extend or renew the COE for a vehicle already in use. The PQP is calculated based on the moving average of the QP in the last 3 months. PQP price varies from month to month.
For all vehicle categories, the COE may be renewed for a period of either 5 or 10 years.
COEs, which have been renewed for a period of 5 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.
Make an informed choice on how you can finance your COE Renewal for 5 years & 10 years, depending on your financial situation.
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