Certificate of Entitlement A system aimed at limiting the growth of motor vehicles to an annual increase of 3 per cent. To register a vehicle, would- be owners bid in an open tendering exercise for the right to own a vehicle, called a Certificate of Entitlement (COE). The Government announces the quota in each of the five individual categories— namely small or medium cars and taxis; large cars; goods vehicles and buses; motorcycles; and ‘open’ (for any kind of vehicle)— and carries out two bidding exercises a month through an electronic tendering process. The bidder keys in a reserve price, which is the maximum amount he is willing to pay for a COE through Internet banking, phone banking or automatic teller machines. He will then have the opportunity to gain a COE until the current COE price exceeds the reserve price. He can revise his price upwards anytime before the bidding exercise closes. Successful bidders pay the quota premium for the COE, which is the highest unsuccessful bid price plus $1 for that category.

COEs are valid for eight years from the date of registration for taxis, and ten years for other vehicles. In mid 2006, COE prices were approximately $900 for motorcycles, $10,000 for small/medium cars and taxis, $11,000 for large cars, $6,000 for goods vehicles and buses and $11,000 for the open category. In the mid- 1990s, the COE prices peaked at around $3,600 for motorcycles, $43,000 for small/medium cars, $66,500 for large cars, $36,000 for goods vehicles and $105,000 for the open category.

The vehicle quota premium to register a new car varies from bid to bid. The COE for a car is valid for ten years after first registration. If a car owner wishes to keep the vehicle after that, he has to pay the prevailing quota premium, which is the average of the quota premiums for cars in his category for the previous three months. This new COE revalidates his car for another ten years. He has an option of paying 50 per cent of the prevailing quota premium to revalidate for five years, but the five- year COE is not renewable. Initially, COEs for cars used to be transferable and this resulted in their trading on the open market. To prevent speculation, new COEs are no longer transferable.

See also car ownership.