COE Prices Hit S$116,890 in March 2025

On March 19, 2025, Singapore’s Certificate of Entitlement (COE) prices surged across all categories in the latest tender exercise, with Category B hitting S$116,890—the highest in 15 months. This escalation reflects a broader trend of rising vehicle ownership costs in a city-state renowned for its stringent car population control. Category A rose to S$94,502, Category C reached S$70,089, Category D climbed to S$9,511, and the open Category E peaked at S$116,991. These increases, ranging from 1.9% to 4.6%, signal a persistent upward trajectory that demands a closer look at the underlying causes and their far-reaching implications.

The latest bidding results paint a clear picture of escalating costs. Category A, covering smaller cars up to 1,600cc or 130bhp and electric vehicles (EVs) with up to 110kW of power, saw a 1.9% rise from S$92,730 to S$94,502—marking the highest price for this segment in 2025 so far. Category B, encompassing larger cars and EVs exceeding 110kW, jumped 3.4% from S$113,000 to S$116,890, a level not seen since late 2023. Meanwhile, commercial vehicles (Category C) increased by 4.6% to S$70,089, motorcycles (Category D) rose 3.4% to S$9,511, and the flexible Category E climbed 3.6% to S$116,991.

A primary driver of the COE price surge is the fixed supply of certificates, a deliberate policy by the Land Transport Authority (LTA) to maintain a zero-growth vehicle population. With Singapore’s population nearing 6 million and urban density increasing, demand for personal vehicles remains robust, especially for larger models in Category B. The quota for this category in March 2025 was approximately 750, yet bids far exceeded this number, pushing prices higher through intense competition. This supply-demand imbalance is a structural feature of the COE system, amplifying price sensitivity to market conditions.

For prospective car buyers, the rising COE prices translate into a steep barrier to ownership. A Category B vehicle, such as a mid-range SUV or a Tesla Model Y, now carries a COE cost of S$116,890 on top of its base price, pushing the total outlay well beyond S$200,000 for many models. This financial burden is likely to deter middle-income households, nudging them towards public transport, motorcycles, or car-sharing services like GetGo and BlueSG. The motorcycle segment, though also pricier at S$9,511, remains a more affordable alternative, potentially increasing two-wheeler traffic on Singapore’s roads.

Beyond the immediate market, the COE surge has ripple effects on Singapore’s economy. The government reaps significant revenue from these high bids, with each tender exercise generating millions in funds that support infrastructure and public services. However, households spending more on vehicles may have less disposable income for other sectors, such as retail or dining, potentially slowing growth in these areas. This trade-off highlights a tension between fiscal gains and consumer welfare, a balance policymakers must navigate carefully.

The COE price trend has tangible implications for financial markets. Automotive stocks, particularly those tied to mass-market brands listed on the Singapore Exchange, may face downward pressure as sales volumes wane. Conversely, luxury car manufacturers and their regional distributors could see stock gains, buoyed by demand from high-income buyers. Public transport and ride-hailing companies, such as ComfortDelGro and Grab, stand to benefit as alternatives gain traction, potentially lifting their share prices in the near term.

In my view, the COE price surge, while challenging for consumers, is a necessary adjustment that reinforces Singapore’s sustainable mobility framework. The high costs effectively curb vehicle growth, aligning with the city’s spatial constraints and environmental targets. Critics might argue that this burdens middle-class families, but the system’s design prioritizes collective benefit over individual convenience—a trade-off I consider justified given Singapore’s unique urban challenges. The shift towards EVs in Category B, despite pushing prices up, is a welcome development, signaling progress in green transport.

The COE price increases of March 2025 underscore a pivotal moment for Singapore’s transport landscape. They signal resilience in consumer demand and a successful policy framework, yet pose challenges for affordability and market stability. For individuals, exploring car-sharing or delaying purchases until potential quota adjustments take effect could mitigate costs. Businesses, particularly in automotive and mobility services, should pivot towards premium offerings or scalable rental models to capitalize on these shifts.