Why is there a need to regulate vehicle age? And how did the Certificate of Entitlement (COE) 10-year validity period come to be? CNA revisits the origins of the notable number.
SINGAPORE: For many motorists, the decision to deregister their car near or at the end of its 10-year Certificate of Entitlement validity period is a no-brainer.
The PARF rebate, based on the COE premium that the owner has paid for 10 years, is given when a car is deregistered before it hits the 10-year mark. The younger the vehicle, the more PARF rebate owners get. Nonetheless, the COE policy gave vehicle owners greater flexibility when it was changed in 1992 to allow owners to renew their COEs for another five years instead of 10.Analysts who spoke to CNA could not speak to the significance of the COE’s 10-year lifespan, as opposed to a shorter or longer duration.
That said, any decision to adjust the 10-year benchmark first requires an understanding why the figure was deemed to be “approximately correct, given the factors for vehicle turnover”, added Assoc Prof Theseira. Having more owners keep older cars would also mean fewer new COEs available for bidding, added Asst Prof Fan.
To that end, extending the COE to, say, 15 years doesn’t simply entail multiplying the cost of the existing 10-year COE premium by one-and-a-half times. “It means that the cost of operating a vehicle today is locked in for 10 years, which basically results in huge differences at times in vehicle costs between different owners. The long COE period today also makes adjusting the COE supply cycle extremely difficult,” he explained.
One camp argues that “vehicles should be turned over for more sustainable models like electric vehicles sooner”, while another posits that such “early scrapping” initiatives only waste the “embedded resources” in existing vehicles.
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