Car leasing companies not main culprits in rising COE prices: Singapore's Ministry of Transport
The Singapore Government's Acting Minister for Transport, Chee Hong Tat, clarified that car leasing companies are "unlikely" to be the primary cause of the escalating COE prices in Singapore.
Chee addressed queries from Members of Parliament (MPs) regarding the surging certificate of entitlement (COE) prices and highlighted key insights.
For instance, car leasing firms secured roughly 21% of Category A COEs in the last three quarters, down from 27% in 2022. In COE Category B, winning bids by car leasing firms decreased slightly from 24% in 2022 to 23% in the last three quarters.
In the recent COE bidding exercise which ended on October 18, the Category B COE premium crossed S$150,000 for the first time and the Open Category E COE premium reached a record S$158,004. Just a month earlier, COE premiums for Categories B and E broke the S$140,000 mark. Category A COE prices also hit a new high of S$106,000 in the same October 18 bidding exercise.
Proposals to create a separate COE category for car leasing companies or treat them like taxis (exempt from COE bidding and paying the Category A Prevailing Quota Premium instead) were met with caution by Chee. According to him, such a move would require reallocating quotas from existing categories and risk further price hikes or COE quota shortages.
In September 2022, the Ministry of Transport noted that separating private hire cars from the COE bidding pool could increase costs for consumers. However, the Government is considering alternative solutions beyond COE bidding to address concerns related to car leasing companies, while recognising the role of private hire cars in providing point-to-point transport services in Singapore.
As of September 2023, about two-thirds of point-to-point trips are made using private hire cars, compared to a smaller ratio of three out of five in the pre-pandemic period. The private hire car population in Singapore stands at around 78,000, with approximately 53,000 individuals holding a private hire car driver's vocational licence (PDVL). Most PDVL holders rent vehicles from car leasing firms to provide ride-hail services.
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