Renewal of COEs for Five Years
Ministry of TransportSpeakers
Summary
This question concerns the renewal statistics for five and 10-year Certificates of Entitlement (COEs) and the possibility of allowing multiple five-year renewals. Dr Lim Wee Kiak asked for data from the last three quarters of 2020 and suggested permitting recurring renewals to prevent speculative activities. Minister for Transport Ong Ye Kung stated that 13,637 five-year and 13,281 10-year COEs were renewed but rejected the proposal for additional extensions. He explained that multiple renewals would reduce the supply of COEs for new bidders and create unfairness toward those paying 10-year premiums upfront. Consequently, the Land Transport Authority will uphold the existing one-off renewal policy to maintain a fair balance between existing and prospective car owners.
Transcript
88 Dr Lim Wee Kiak asked the Minister for Transport (a) in the last three quarters of 2020, how many COEs have been renewed for five and 10 years respectively; and (b) whether LTA will consider allowing renewal of five-year COEs more than once, adhering to the price in the first round of renewal to prevent speculative activities.
Mr Ong Ye Kung: In the last three quarters of 2020, 13,637 Certificates of Entitlement (COEs) were renewed for five years and 13,281 COEs were renewed for 10 years.
If we allow COEs to be renewed for five years more than once, then there will be fewer COEs being recycled for bidding, and this will tilt the current balance in addressing the needs of existing and prospective car owners.
It is a balance that we must continue to strike carefully. The current rule of a single five-year renewal came about because when the system was first implemented, all COEs were meant to be valid for 10 years. But there were existing owners who felt that their vehicles may not last another 10 years, so an exception was made to provide a one-off five-year renewal option, on the condition that their vehicles must be deregistered at the end of five years.
Most owners have de-registered their vehicles as required but understandably, some owners feel differently after five years. Allowing this group of owners to renew their COEs for another five years means allowing them to pay for a 10-year COE in two instalments, which is also unfair to those who decided to pay the entire amount upfront.
Taking all these factors into consideration, LTA has preferred to keep to the existing rule.