Let me tell you about the most expensive thing my family has never bought.
A piece of paper that lets you own a car for 10 years. That is what a COE is. And right now, that piece of paper costs S$124,790 for Category A.
I am not exaggerating. That S$124,790 is just the paper. You still need to pay for the car on top of that. And insurance and road tax.
Welcome to Singapore car ownership. It is one of the most expensive things a family here can do. And nobody is really talking about what happens next.
What the COE actually costs right now
Let us look at the numbers from May 2026 bidding.
Category A covers cars 1,600cc and below with 130bhp or less. Premium: S$124,790. That is up from around S$80,000 just two years ago. In fact, COE for even affordable EVs is now over S$160,000 with the car price included, which changes the math entirely for budget-conscious families.
Category B covers anything above those specs. Premium: S$126,236. You are paying more than S$125,000 for the right to register a car. Not the car itself.
Category E, the Open category for any car type, came in at S$127,700.
These prices are not random. They are a direct result of how the government controls the supply of new COEs each month. The quota is tight. The demand is high. The price goes up.
If you want to understand the full picture of what cars actually cost in Singapore right now, we broke down the full cost of car ownership in 2026, including all the hidden costs most families do not factor in.
The S$7 billion question
Here is something that does not get discussed enough. The government collects between S$5 billion and S$7 billion every year from COE related revenue. That includes new COE premiums, renewal fees, Additional Registration Fees, road tax, and various other charges.
Let me say that again. Every single year, Singapore families collectively pay the government roughly S$7 billion just to own cars. And that number grows as COE prices climb higher.
This is not a small revenue stream. For context, the government spends billions on healthcare subsidies, education, and public transport. The COE system is essentially a massive annual tax on car ownership. It is just collected in a different way.
Why COE exists
Before I get into the alternatives, I need to be honest about why COE exists in the first place.
Singapore is small. Very small. Land is finite. Roads have capacity limits. If everyone who wanted a car got one, the roads would be permanently.gridlocked. Ask anyone who has driven through the CBD at 9am.
The COE system is fundamentally a tool to control how many cars are on the road. It limits vehicle population growth. It keeps roads somewhat manageable. It is a form of supply control.
The uncomfortable truth is that car ownership in Singapore is deliberately expensive. The government is not hiding this. They are managing a finite resource. And the price you pay for a COE is essentially a fee for occupying a piece of Singapore road space.
The alternatives that could replace COE revenue
Now here is where it gets interesting. Several smarter people than me have asked the same question. If COE is causing pain for families, what could replace it? And more importantly, could any option actually work?
Option 1: Pay per kilometre
Instead of paying S$125,000 once every 10 years, you pay a small amount every time you drive. This is called road usage pricing, and it is used in some form in several countries.
The idea is simple. The more you drive, the more you pay. Someone who drives 20,000 kilometres a year pays more than someone who drives 5,000.
At S$0.10 to S$0.20 per kilometre, an average car doing 15,000km generates roughly S$1,500 to S$3,000 per year in road charges. Multiply that across one million cars and you are looking at S$1.5 billion to S$3 billion annually. That is a meaningful replacement for COE revenue.
The benefit is that it is more fair. A retiree who only drives to the market on Sundays pays less than a salesman driving 200 kilometres a day. Current COE treats them the same.
The challenge is implementation. Every car would need tracking hardware. GPS telemetry. There are privacy questions. And it requires significant infrastructure to build and manage.
Option 2: Annual vehicle levy based on vehicle type
Instead of one big COE payment, a smaller annual charge based on what you drive.
Petrol and diesel cars pay more because they do not pay fuel duty equivalent. Electric vehicles pay less initially, with the levy increasing as EV adoption grows. This rewards the switch to cleaner transport without creating a rush on COE.
At S$2,000 per year average across 600,000 private cars, that is roughly S$1.2 billion annually. Combine it with road usage charges and you have a viable replacement for COE revenue without the massive upfront payment.
Option 3: Dynamic congestion pricing
Singapore already has ERP in some areas. The idea would be to make it smarter and more location-based.
CBD and Orchard during peak hours: premium charges. Heartland areas during off-peak: minimal or no charge. This targets the actual problem, which is congestion in specific areas at specific times, rather than penalising all car ownership equally.
London charges vehicles to enter the city centre. Singapore could expand this model significantly. Revenue potential from congestion pricing in dense commercial areas alone could be S$500 million to S$1 billion annually.
Option 4: Carbon tax expansion
Singapore already has a carbon tax at S$25 per tonne, rising to S$50 per tonne by 2030. The logical next step is to increase it further.
Raise it to S$75 to S$100 per tonne by 2035. Apply it to vehicle fuel, vehicle emissions at inspection time, and commercial transport. At S$75 per tonne across 40 million tonnes of CO2 equivalent emissions annually, that generates approximately S$3 billion per year.
The key is making it revenue neutral. Every Singapore household gets a carbon dividend. If you drive less than average, you come out ahead financially. If you drive more, you pay more. The money does not disappear into general revenue. It comes back to households.
Option 5: Commercial vehicle charges
Delivery vans, logistics trucks, and ride-hail vehicles cause disproportionate wear on roads. They should pay more.
A commercial vehicle annual levy of S$2,000 to S$5,000 per vehicle applied to 150,000 commercial vehicles generates S$300 million to S$750 million annually. Add a last-mile delivery surcharge in city centre areas at S$5 to S$10 per delivery, and you are looking at significant additional revenue from the commercial transport sector.
Option 6: Parking reform
Currently, parking in many areas is subsidised. HDB estates and commercial buildings charge below-market rates. The reform is simple. Move to market-based pricing.
CBD commercial parking: S$5 to S$10 per hour minimum. HDB estates: S$0.50 to S$1 per hour. All revenue above operating cost goes into a transport fund that subsidises public transport for lower-income families.
Commercial parking revenue alone could generate S$500 million to S$1 billion per year. This is not a new tax. It is charging the true cost of providing parking in expensive central locations.
What this means for your family
Here is the practical question. Should you buy a car in Singapore right now?
The answer depends on your situation.
If you have two kids, do activities on weekends, and regularly cross the causeway to JB, a car changes your life significantly. The flexibility is real. The time savings are real. The ability to just go when you want to go is real.
But the math is brutal. A Category A COE at S$124,790 is just the start. Add the car price, insurance, road tax, petrol or charging, maintenance, and parking. Over 10 years, owning a car in Singapore can easily cost S$150,000 to S$200,000 or more. For a clearer picture of what you are actually committing to, here is our full breakdown of what car ownership actually costs for a Singapore family in 2026.
That is before you consider the opportunity cost. That S$125,000 in COE could be invested. It could go into your children is education fund. It could be your emergency fund.
Some families do the math and decide Grab is cheaper even at S$1,000 to S$2,000 per month in heavy usage. Others find the value of car ownership is worth every cent. There is no universal right answer.
The real solution
If I were Transport Minister for a day, here is what I would do.
First, decouple EV ownership from the growth cap. If you are swapping a petrol car for an electric car, that should not count against your COE quota. The quota restriction is there to limit total vehicle numbers. An EV replacing a petrol car does not increase that number. Let the market breathe a little. This is especially relevant given what we learned about EV battery longevity and whether it justifies the premium over petrol cars.
Second, introduce road usage charges for electric vehicles. EV owners currently pay nothing for road maintenance and wear. They should pay something. A distance-based charge for EVs fills that gap naturally and creates a new revenue stream that grows as EV adoption increases.
If you are planning an EV road trip to Genting, we have a full charging guide for the Singapore to Genting route that shows how the charging infrastructure is improving but still requires planning.
Third, expand ERP to be location-based and dynamic. Peak hour entry into Orchard, CBD, and Jurong costs more. Evening off-peak in the same zone costs less. This is congestion pricing done right. It charges people for driving in crowded places at crowded times, not for owning a car.
Fourth, over the next 10 years, gradually reduce the COE supply restriction while road usage charges fill the revenue gap. By 2035, with high EV adoption, fuel duty becomes irrelevant. Road usage charges become the norm. COE premiums naturally fall.
The government still collects its S$5 to S$7 billion annually, just not all from a single upfront payment that crushes families trying to make a practical decision.
What you can do right now
If you are currently deciding whether to buy a car or renew your COE, here is my honest advice.
Run the full numbers. Not just the COE. Everything. Insurance, road tax, petrol or charging costs, parking at home and work, maintenance, and the opportunity cost of the S$125,000 tied up in the COE itself.
If that total comes to less than Grab or public transport over 10 years, and you have the cash flow to support it, a car may make sense.
If the numbers do not work, and you need a car for family reasons, consider whether a smaller used car with lower COE makes more sense than a new car with the highest COE premium ever.
The COE system is not going away tomorrow. But the conversation about what replaces it is gaining momentum. And for the first time in years, there are serious proposals on the table that could actually change the math for Singapore families.
That conversation matters. Share it with someone who is currently deciding whether to renew their COE. They need to hear both the cost and the options.