High Motorcycle COE Prices | What Can You Do About It?
What Can You Do About Soaring Motorcycle COE Prices?
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The Certificate of Entitlement (COE) was introduced in Singapore in 1990, to curb road usage and limit vehicle ownership across the country in the midst of a booming population. Being a small island with limited land space, it’s an obvious solution to avoid congestion and maintain a safe road network. However, the rising costs of COEs, especially for motorcycles this year has severely affected motorbike dealerships and budding riders.
In this article, we discuss how the COE works, why the current costs for motorcycle COE is going up and what you can do as a biker about the soaring motorcycle COE costs.
How does the COE work?
Basically, the COE system entitles vehicle owners to drive on Singapore roads for up to 10 years. A controlled number of COEs are released twice a month via the Vehicle Quota System (VQS), and the cost largely depends on market demand.
Car and motorcycle owners can purchase a COE for their vehicle, once it’s released, by submitting their bid online. The COE prices are then determined by bidders in an open market, causing it to fluctuate as seen in the past few years.
Why is Motorcycle COE rising in cost?
Motorcycle COE has been on a steady rise since the beginning of this year, recording about $8700 in May to a whopping $9689 during the first week of Sept. However, there has been a slight decrease in the last bid (22 Sep 2021) of about $600.
This hefty COE cost has certainly dampened many riders from purchasing a new bike. Compared to the cost of purchasing a motorcycle, the new COE prices are simply unjustifiable. For example, a Yamaha T150 Sniper with a machine price of about $5000, would cost more than S$13,000 with the current COE price. If you’re familiar with motorcycles, you would know that this is an unreasonably high cost for a lightweight bike. Not forgetting that this does not include road tax and motorcycle insurance.
If you’re wondering why the COE prices have skyrocketed recently, then first you must understand the law of Supply and Demand. To put it simply, an item will tend to increase in price when the supply of it decreases, as it becomes a rare item to purchase. On the other end of the scale, the price of the good could also increase when the demand for that good increases.
On that note, the rise in cost has left some parties perplexed, in view of the high supply of certificates that were made available mid this year. So why exactly has the cost gone up so high?
One reason could be due to a drop in the COE quota over the past few months because of reckless overbidding. Seeing that the penalty for unused COEs is as low as $200, some bidders may resort to submitting multiple applications with little qualms about being forfeited.
However, there may also be genuine demand for motorcycle COEs due to the growing demand of food delivery services. Because of Covid-19 restrictions, which don’t allow dine-in at restaurants, food delivery services like GrabFood and Foodpanda in Singapore have seen a spike in riders, which has inevitably affected the bidding of COE.
There have been many speculations, but the fact remains that the cost of owning a motorcycle is ridiculously high as a result of exorbitant COE costs.
What Can You Do as a Biker?
So, the ultimate question you’re probably contemplating is, what can you do about this? Whether you’ve decided to invest in a motorcycle for work or you’re thinking of getting a bike for the love of riding, we understand that this has probably put the brakes on your hopes of buying a new motorcycle.
One way to dodge the high COE prices is to opt for a cheaper second hand motorbike sold at dealerships. Some dealers may have also bought the COEs at a lower price and while it may be sold at a premium, there’s a better chance of avoiding the recent premiums that are higher.
Besides that, there are petitions being put forward, such as the ‘Appeal to Review and Increase Cat D (Motorcycle) COE Forfeit Penalty,’. You could also try writing in to the LTA or speak with your MP at Meet the People Sessions to voice out your concerns.
Although we know the COE system helps regulate the number of motorcycles on the road, it’s hard to ignore the reality that many rely on their motorcycles to make a living, as in the case of food delivery riders. It’s also an obvious fact that commuting by motorcycle rather than car can actually ease overall traffic congestion.
Yes, we all want safer roads with smooth traffic, but there’s no harm in voicing your concerns, especially if it directly impacts your lifestyle and livelihood.
Are you a motorbike rider who’s been affected by the rising cost of COE? Share your thoughts with us, regarding this issue, in the comments section below!