What’s the fun in buying a car if it doesn’t involve a whole lot of money and a whole lot of paperwork? Here in Singapore, owning a car isn’t as simple as choosing a make and model. You first have to survive the COE hunger games to secure the “rights” to having the car (so much fun! 🥹). So if you’re wondering how it all works, here’s a dummy’s guide to this easy-peasy process.
1. What is a COE?
The COE is a licence that gives you the right to own and use a vehicle on public roads for 10 years. Without which, your car registration can't happen.
Once those 10 years are up, you have 2 choices: say goodbye and deregister your car (scrap or export it), or fork out for a COE renewal and keep the relationship going. This extension can be for another five or ten years, depending on how long you think you can stay faithful to your four-wheeled companion.
To spice things up, the renewal cost, known as the Prevailing Quota Premium (PQP), changes every month based on the average COE prices from the past three months. Opt for a 5 year extension and you only have to pay 50% of the PQP, with the catch that your COE cannot be renewed again. So if you’re having attachment issues with your car, this might not be the option for you. Alternatively, you can extend your COE by 10 years, allowing for subsequent renewals and more quality time with your vehicle.
2. The Categories: because “One size fits all” doesn’t apply
Of course, it’s not as easy as applying and buying. COEs are split into categories depending on vehicle size, engine power and use. To obtain one, you have to bid for them. And just to keep the stakes high, if you pick the wrong category, your dream car might turn into a financial nightmare as your bid deposit can be forfeited. So don’t say we didn’t warn you, do your research and choose wisely!
Here’s a quick rundown:
- Cat A: Smaller cars (up to 1,600cc & 130 bhp) and EVs with up to ~110 kW.
- Cat B: Larger, more powerful cars or EVs above that threshold.
- Cat C: Commercial vehicles (goods vans, buses).
- Cat D: Motorcycles (if you like two wheels and less metal).
- Cat E (Open): You can think of this as a “wildcard” category. It can be used for almost any vehicle except motorcycles, and often used by companies or for luxury cars.
3. How much does it cost? Brace yourself.
COE premiums fluctuate wildly because they’re tied to bidding. Here are some recent numbers to give you context.
The bottom line is, a COE can cost tens of thousands of dollars, sometimes more than the car’s base price. Want to know how to time the market? Here are some key drivers of COE prices to give you an edge in the bidding wars.
- Quota (Supply): More COEs available = less bidding war.
- Demand: More people want cars (or big ones) = higher premiums.
Eg: EV hype = more bids.
- Timing & external events: Holidays, vehicle launches, regulatory changes all affect bidding.
These drivers have resulted in record high premiums in 2025. So bid (bide) your time, and monitor the latest price hikes and trends, before jumping headfirst into this volatile market.
4. How to actually apply / bid for a COE
Now the fun begins! Bidding exercises occur twice a month, with the bidding period and available COEs announced prior to the start of each session. Your bid deposit is determined by the COE vehicle category, but you also need to decide a reserve price, which is the maximum price you’re willing to pay.
Once the bidding starts, the system will automatically nudge your offer up by $1 increments until it hits your reserve price. If at any point your bid is successful, the money will be automatically withdrawn from your bank account. When it’s all over, you’ll either be left with the COE and an empty wallet, or a fractured will to live but some heavier pockets. But don’t let that scare you from trying! Grab your auction paddles and prepare for chaos, here are the steps to the bidding war:
- When the Land Transport Authority (LTA) announces a bidding exercise, check the quota for your category.
- Submit your bid via ATM (DBS/POSB) or Internet banking (for companies) with a bid deposit (non-refundable). Click here for more info.
- Wait for results. If you're successful, you’ll get a Temporary COE (TCOE) and can proceed with vehicle registration
- If you fail the bid, your deposit is forfeited. Try again! (Or maybe rethink your budget).
- After 10 years of ownership, decide between renewing your COE (by paying the PQP) or deregistering the vehicle.
💡Pro tip: Stay calm and set a max reserve that you can afford, don’t overcommit and overpay in your frenzy to secure a COE!
5. Final thoughts
Now that you’ve seen car ownership in its full transparency, it certainly isn’t all rainbows and butterflies. Between fluctuating premiums, frantic bidding, and the lingering fear of overpaying, it’s enough to make even the calmest driver consider taking the bus.
Being a car owner is definitely high effort, high reward. If you’re not ready for that kind of commitment, alternative transportation options like car-sharing are always a life-saver. It's a little like dating, all the fun with none of the emotional baggage. 😉
🧠 Frequently Asked Questions
1. Can I transfer my COE to someone else?
COEs are not freely transferable between individuals. Once a COE is tied to a vehicle, it stays with that vehicle. The only exceptions are for company mergers, inheritance cases, or vehicle scrap/export scenarios. So unfortunately, you can’t “sell” your COE to your friend like a concert ticket.
2. What happens if I don’t use my COE after winning the bid?
If you don’t register a vehicle within the validity period of your Temporary COE (6 months for most categories, 3 months for Cat C), it expires. And that deposit you paid? Also gone. So unless you enjoy expensive lessons in procrastination, register your car before the deadline.
3. Is it cheaper to buy a used car with an existing COE?
Sometimes! Buying a used car with a remaining COE (say, 5 years left) means you’re only paying for the leftover “COE time.” But always check the vehicle’s condition, mileage, and any hidden fees. A cheap car with a nearly expired COE might end up costing more if you have to renew it soon. It’s like buying a carton of milk that’s already one day past its best-by date.
(Feature photo: The Guardian)
