Also: COE bidding strategy (timing, tactics, and how to set a ceiling).
COE is not a simple “tax”. It behaves like a prepaid 10-year usage license that gets embedded into your car price — and then decays over time.
That decay is why COE is the largest structural cost driver for many buyers. For many ownership profiles, COE-related decay can be a large share of total depreciation exposure over a typical 5-year hold — especially when COE levels are elevated.
If you only read one page:
This page focuses on the COE cost engine and why COE cycle timing + holding period can dominate your outcome. If you keep thinking “but the instalment is okay”, read: the instalment trap most buyers don’t see.
A COE grants the right to own and use a vehicle in Singapore for 10 years. It is allocated via a quota system and priced via bidding, so it moves with supply and demand.
The important part is how it behaves economically: COE is a large upfront capital component that gets embedded into your purchase price — and then you consume it across time.
Mental model:
COE prices are cyclical (and vary by category). As an illustrative way to think about volatility, broad bands across recent years have looked like:
These are not forecasts or guarantees — they exist to show that COE is not stable. Always reference current bidding results before committing capital. The point is: COE volatility flows directly into depreciation.
When you buy a $150,000 car in Singapore, a large portion of that price is COE. Over a 5-year holding period, depreciation is effectively:
COE decay + vehicle value decline.
Example (illustrative):
This is why instalment-based thinking is dangerous: the dominant cost is hidden inside “car price”. If you want the all-in model behind this, use: 5-Year Car Ownership Breakdown and the monthly budgeting version: True Monthly Cost of Owning a Car.
Many buyers anchor on “10 years”. In practice, many owners sell within 3–6 years. That means your outcome depends heavily on: your holding period and the COE cycle at entry.
The fragile pattern is simple: high COE + short holding period increases downside exposure. If your timeline is uncertain, treat it as a risk problem, not a prediction problem.
If you’re deciding whether to buy at all: Is It Worth Owning a Car? · If you’re deciding “buy now vs wait”: Should You Buy Now or Wait? (COE Timing Framework)
If you hold for ~5 years, a simple first-order estimate is that you consume roughly half the COE right. That means the “COE usage cost” across 5 years is often roughly: ~50% of the 10-year COE price (before market and structure effects).
| COE Level | 10-Year COE Price | First-Order 5-Year Usage Cost |
|---|---|---|
| Lower Cycle | $50,000 | ~$25,000 |
| Mid Cycle | $80,000 | ~$40,000 |
| High Cycle | $110,000 | ~$55,000 |
This is a simplified lens to help you reason clearly. Real outcomes vary with car model, demand, condition, and structure (e.g., ARF/PARF effects, remaining COE runway, and the cycle at exit). Use it as a decision anchor, then sanity-check with the full model: 5-Year Ownership Breakdown.
Do this in order (fastest correct path):
If you already own a car:
COE is not just a line item. It is a macro-level capital allocation decision embedded inside every car purchase.
The higher the COE cycle, the higher your depreciation risk and capital exposure. That is the cost most buyers underestimate — because it is hidden inside the “car price”.
COE prices are cyclical and vary by category. In recent cycles, prices have ranged broadly from around $30,000 in lower cycles to above $100,000 during high spikes. Always check current bidding results before making decisions.
COE is embedded inside your car’s purchase price and decays over time. Over a 5-year holding period, roughly half of the COE lifespan is consumed, making COE one of the largest drivers of total depreciation exposure.
Buying during lower COE cycles can reduce embedded depreciation risk, but you still need to consider holding period, liquidity, and whether ownership is rational compared to ride-hailing.
Because COE is embedded inside depreciation and can account for a large share of total depreciation over a typical 5-year ownership period, making it a dominant structural cost driver in Singapore car ownership.