A post-pandemic recovery has driven up the cost of the country’s vehicle quota system to all-time highs, which means that in order to own a car in Singapore, a buyer must bid for a certificate that currently costs more than $106,000 (S$145,000), which is comparable to four Toyota Camry Hybrids in the United States.
The “certificate of entitlement” (COE) system in Singapore was first implemented in 1990 in order to regulate the number of automobiles in the compact city-state, which has a population of 5.9 million people and can be traversed in a little over an hour by car. The COEs are valid for ten years.
As a result of the quota, which was made available through a process of bidding, this city has become the most expensive in the world in which to purchase a car, with the certificate for a large automobile more than quadrupling from 2020 pricing on Wednesday to a record S$146,002 ($106,376.68).
Taking into account COE, registration fees, and taxes, the price of a brand-new basic Toyota Camry Hybrid is presently S$251,388 (about $183,000) in Singapore. This figure compares to the price of just $28,855 in the United States. A modest apartment in Singapore that is subsidized by the government can be purchased for roughly S$125,000.
In the year 2020, when there were fewer people driving in Singapore, the price of COEs plummeted to approximately S$30,000; a post-Covid boost in economic activity has led to more people purchasing cars, but the total number of vehicles that are allowed on the road is capped at approximately 950,000. The quantity of older vehicles that are deregistered determines the amount of fresh certificates that are made accessible.
The skyrocketing price puts automobiles firmly out of reach of the majority of Singaporeans with middle-incomes. This puts a hole in what sociologist Tan Ern Ser called the “Singapore dream” of upward social mobility, which involves having cash, a condominium, and an automobile.
The annual household income that is considered to be the median in Singapore is S$121,188.
As a result of chronic inflation and a faltering economy, Singaporeans have been hammered hard. As a result, several Singaporeans are selling the automobiles they purchased while certificate prices were cheap in order to make a profit.
“One needs to lower their aspiration from achieving the ‘good life’ to settling with a ‘good enough life,'” Tan added. “There is a need to lower one’s aspiration.”
Jason Guan, an insurance agent and father of two children, is 40 years old and stated that he purchased his first automobile, a Toyota Rush, in 2008 for a total of S$65,000, which included the cost of the COE.
“As a family man, it doesn’t affect me much as Singapore still has a good and stable education system,” he said. “It’s a good place to raise a family.” According to him, in terms of safety, it is still among the safest countries in the world.