Bidding for COE myself must be one of the most rogue things I ever did.
The Certificate of Entitlement, or more commonly referred to as the COE, is a very expensive piece of paper that you must have in order to own a car in Singapore. It forms a big bulk of car prices in Singapore and is essentially put in place to prevent too many cars in land-scarce Singapore. We’re looking at $30,000 to $50,000 on average.
And guess what? I got my COE successfully by bidding myself for a ridiculously cheap price of $2,693. That’s a bargain, even when compared to the low COE prices now, which is around $25,556 for Cat A cars. At its highest, the COE was $92,100 for Category A (1600cc and below) cars in January 2013.
So how did I manage to get such a cheap COE price, and why aren’t more people “ownself bidding”?
How do you actually bid for COE?
First, you have to understand the Open Bidding System that regulates COE prices.
It is a rather sophisticated auction system through which you bid for the car category you want. Bidding happens over 3 days in real-time and everything is computerised to ensure it is automatic and fair.
By splitting into categories, those who need a bread-and-butter Cat A sedan to ferry the kids around don’t have to fight with the ultra rich who just want another Cat B super car to add to their collection.
To bid for a COE, you key in the price you want to pay into the COE Open Bidding System or through the System’s various channels listed at ONE.MOTORING. This price you key in is called the reserve price because it’s the price you choped.
You will need to have a bank account with the participating banks and pay a deposit of $10,000 for cars (Cat A, B, C and E). If your bid is successful, what you need to pay for the COE is deducted from that deposit. You top up the rest if the COE price is higher. If you fail, the money will be refunded.
There’s an administration fee between $2 and $10. You don’t get this back.
The bidding opens at $1. That’s the lowest you can bid (though no one ever bids $1 and we’ll explain why later). This is called the Current COE Price (CCP). Bidders need to either match the CCP or go higher. And you need to do this in increments of at least $1. So, you can’t offer a reserve price of $1.01. It has to be at least $2. That’s probably why the 2008 COE was priced at $2.
How did I secure such a cheap COE price?
In 2009, COE prices were falling and I was on the lookout for a car.
It was a bit of a gamble, but I was hoping to benefit from a low COE by bidding myself. I figured that the pay-off was huge.
I was lucky, since when I did it, the COE bids were quite low. As I was quite lazy to monitor every day, I waited until pretty late in the game to toss in my reserve price into the Open Bidding System. It helped me to see where the prices were headed so that I wouldn’t put in too low a price and be bumped off or have to up my bid.
So good timing counts for everything. In fact, the next month after I got my COE, the price dropped further to $1,020. But after that, it just kept going up till it hit that $92,100 high in January 2013.
Tip: Don’t get bumped off with a low reserve price
There’s a reason no one puts in a reserve price of $1 or even $2. Unless it’s a fluke.
There are only a limited number of COEs released each time and typically, there’ll be more bidders than COEs. In October 2018’s 1st bidding, there were 2,059 bidders vying for just 1,668 COEs for Cat A.
So, if you really want that COE, you’d try to bid high because how COEs are awarded is based on the top reserve prices. If there are 3 COEs and 5 bidders, the COEs are given to the 3 bidders with the highest reserve prices.
For example in the scenario below, if there are only 3 COEs available out of 5, COEs will be given to Bidder 1, 3 and 4, who have bid the highest.
|COE Bidders||Reserve Price||Bid Status|
The 3 successful bidders don’t pay the reserve prices they offered, though. Instead, the COE is pegged at the reserve price of the the highest unsuccessful bid plus $1:
$28,000 + $1 = $28,001
Given that the bidding is a 3-day long process, as the bids come in, the Current COE Price will keep changing. So, if more bidders join the bidding, bids lower than the number of COEs available will not qualify.
As it is an open bidding system, all bidders can see the Current COE Price as it climbs. When you see that your reserve prices are too low, you can revise your bid upwards to match or surpass higher bidders. The bidding happens for 3 days until Wednesday 4pm. The last CCP is called the Quota Premium (QP). That’s the price all successful bidders pay to get a COE.
So, you can see why it pays to bid somewhat higher. It puts you in a much better place to get a COE, even when there are new bidders bumping off the lower bids. It saves you the trouble of having to revise your bid constantly and you don’t have to pay your sky-high reserve price anyway.
If it’s so cheap, why aren’t more car buyers bidding for COE?
Individual car buyers often want to skip the hassle, since bidding for COE is not a straightforward process. This is why many people let car dealers do the bidding. But what you gain in convenience, you lose in savings.
See, when you let car dealers do the bidding for you, you are essentially agreeing to high markups that include estimates of what they guess the COE will be, since they only bid for the COE after they secure your order.
So, if the COE suddenly plunges to $2 tomorrow like it did in November 2008, you’re not going to benefit from the savings, since you have already agreed to the guesstimated price.
To bid yourself, you also need to put down a deposit of $10,000, which is not a small sum. To find a COE-less car in a market where car dealers are used to factoring in the COE into car prices is also not an easy feat.
How did I buy a car without COE from the dealer?
The bidding process is tedious enough, but the next challenge to find someone willing to sell you a COE-less car.
Go into any car forums and you’ll find plenty of stories about authorised dealers (ADs) and even parallel importers (Pis) who hem and haw and refuse to sell you a COE-less car or claim they have “no stock”.
It is possible though. You have to be firm, but some dealers like Tan Chong may agree to sell you a car by minusing the COE price off their stated price.
In my case, I side-stepped all the charade with a little reverse engineering. I had a friend who was a parallel importer and before I got the COE, I got him to agree to sell me a COE-less car if I should secure one. Like me, you can also look for parallel importers who may be able to sell you a COE-less car.
LTA COE live bidding dates: When to place bids?
Each month, you have 2 chances to bid for a COE. The first bidding of the month starts 12pm on the first Monday and ends on Wednesday 4pm the same week.
The second bidding starts on 12 pm on the third Monday and ends on Wednesday 4pm the same week.
LTA announces the dates and details of COE open bidding on the One Motoring site. If you want to do the bidding yourself, you have to keep a lookout for the dates.
Should you bid for COE on your own?
To answer this, ask yourself:
- Do you have the time and inclination to do your own bidding?
- Do you have $10,000 for the cash deposit?
- Do you have confidence that you can buy a COE-less car?
- Are you in a hurry? You may have to shop a bit for that COE-less car, so if you are in a hurry, you might just want to buy from dealers.
- Are you fussy about the make and model of your new car? As it’s not that easy to get a COE-less car, you may have to be less fixated on the model and make.
If your answers are mostly “yes”, then you’re ready to rock and roll on your own.
For me, I’ll definitely try to DIY again. After all, we’re not talking about spare change here. It’s at least $23k in savings if we’re going by current COE prices!
Have you ever bid for COE yourself and would you recommend people to do it? Tell us in the comments!