The objective of the COE system is to control the growth of the vehicle population by limiting the number of COEs available each year. The COE system does not judge which households are most deserving to own cars, as any administrative allocation or preference for COE allocation would have to take into account the diverse and varied circumstances of each household. For instance, a certain household may be buying their second car but it could be for the wife to send her sickly elderly mother for medical checkups. With the many possible variations of reasons, such a system would be difficult to administer as every household will deem that they are more deserving of a COE than others. To keep the system simple and meet the objective of managing the vehicle population, we allow market forces to determine the allocation of individual COEs in an open and transparent way.
Notwithstanding this, the COE system already incorporates social equity considerations, in having separate COE categories for small cars and large cars, so that buyers of mass-market cars and luxury cars need not bid against each other. Furthermore, buyers of bigger or more expensive cars also pay more in Additional Registration Fee (ARF) and road tax than other buyers. More importantly, we will seek to moderate the demand for cars by continuing to invest heavily to improve our public transport system and provide more options such as taxis, private hire cars, or car-sharing services for people to meet their transport needs without having to own a car.
