Vehicle Quota System
Aim and IntroductionIn order to control the sharp increase in car ownership as a result of increased affordability, the government implemented the Certificate of Entitlement (COE) system, which is under the Vehicle Quota System (VQS). With this new system, the number of cars available to be bought is limited by the quota set by the Land Transport Authority (LTA).
Watch this video to understand more about COE and its purpose.

Detailed Description


COE is compulsory if one wants to purchase a vehicle, and it is only valid for 10 years. After the 10 years, one has to bid for another COE in order to continue having a car. To control the number of cars on the road, the government limits the number of COEs available, while the price is dependant on the market. The government decides on the magic number by observing trends in current traffic conditions. All these are under the VQS.

There are various COE categories for various kinds of vehicles. Cars with 1600cc capacity and below belong to Category A, while cars with 1601cc capacity and above belong to Category B. Motorcycles belong to Category C, goods vehicles and buses belong to Category D, and Category E is an open category, for people to bid for any types of vehicles.

To bid for COE, one is only allowed to submit one sealed bid, and are also required to deposit half their bid. This speculation process poses a major challenge to car owners in Singapore when they want to purchase a car. If they bid too high, the cost of car ownership would increase by huge amounts. If they bid too low, they risk not getting the COE.
Effectiveness

To own a vehicle in Singapore, the cost is extremely high, thus ensuring that car owners really can afford to have one. The cost is made up of Open Market Value (OMV), Import Duty (ID), GST (Good and Service Tax), Registration Fee (RF), Additional Registration Fee (ARF), Certificate of Entitlement (COE) and Annual Road Tax (ART). As seen, there are many components linked to purchasing a car, thus increasing the cost of owning a car by huge amounts. This decreased affordability naturally leads to a slowing down in the increase of car ownership, from 3% in 1990 to 1.5% in 2009.
Conclusion
COE is still in place today, controlling car ownership in Singapore.

Principles of Governance

- Leadership is KeyThe people are largely unhappy about the Vehicle Quota System in Singapore, since the price of car ownership has increased by a significant amount with the introduction of COE. There has also been many criticisms about this scheme by the government, but they remain firm on their stand. It has been around since 1990, and I believe that it would continue being around for a long time, since it really helps to control the number of cars on the road. This is a clear indication of the government doing what is right, and not what is popular, thus making them an excellent group of leaders.
- Anticipating Change and Staying RelevantIn order to curb the problem of traffic congestion, the government have thought of the Vehicle Quota System in order to deter people from purchasing cars unless they really see a need to, since it is extremely expensive to do so. Therefore, we can see that the government is able to see future trends of traffic congestion, and stop it as early as they could, as far back as 1990.

external image v750.gif (Left) A Sample of a Certificate of Entitlement