It now costs some $78,100 for that piece of paper that says you can buy a car like this. That’s the price of a Cat ‘B’ COE from yesterday’s tender exercise. The last time that COE hit this level was in 1994, when it was still under a 7-category scheme. At that time, the equivalent of today’s Cat ‘B’ is divided into two categories, Cat 3 (cars from 1601 cc to 2000 cc) and Cat 4 (cars above 2000 cc). The record for Cat 3 was $95,100 set in Nov 1994, and for Cat 4 it was $110,500 in Dec 1994.
This is absolute craziness. Cars are already taxed at 100% (in the form of the Additional Registration Fees), and while this has come down from 130% or 140% in the past, the price of COE is more than making up for that reduction.
The $78K COE lasts you 10 years. That means, it depreciates at $650 a month, or in other words, it is costing you $650 a month for that right to own a car. Cat ‘A’ COEs are slightly cheaper, but at $57,009, it still works out to about $475 a month for the right to own a car. That’s like a lot of money, considering that you still haven’t even counted the rest of the cost of the car itself. Then, don’t forget the cost of using the car: road taxes, insurance, servicing, ERP, car park charges, fuel, etc.
It just seems so unlikely for COE prices to be skyrocketing when our economy doesn’t look particularly bright this year. Just who are buying cars these days? Even though public transport fares are up, taxi charges are up, surely these are not reasons for pushing people into buying cars. The enormous rise in COE prices is far too disproportionate.
I’m not against taking public transport. I take public transport myself quite often. But I also feel that every family needs a car. The car doesn’t have to be driven everyday, but there are certainly many occasions when having a car would have been a lot more practical and convenient.
Owners whose cars are reaching 10 years now are probably in a predicament. Should they buy a new car at these sort of bewildering prices, or switch to public transport?