What is COE and How Does It Affect Commercial Vehicles in Singapore

Singapore is known for having one of the most regulated automotive markets in the world. A key regulation that shapes vehicle ownership in the country is the COE, or Certificate of Entitlement. This system plays a major role in determining who is eligible to own a vehicle, including commercial vehicles such as vans, light trucks, and logistics vehicles. But what exactly is COE, and how does it impact commercial vehicles?

What is COE?

The Certificate of Entitlement (COE) is a permit that grants the right to own and use a vehicle on Singapore roads for 10 years. To obtain a COE, individuals or businesses must bid in an open bidding system that takes place twice a month.

There are five COE categories:

• Category A: Passenger cars ≤ 1600cc & power ≤ 97kW

• Category B: Passenger cars > 1600cc or power > 97kW

• Category C: Goods vehicles & buses (includes commercial vehicles)

• Category D: Motorcycles

• Category E: Open category (usable for any vehicle type)

COE and Commercial Vehicles

Commercial vehicles fall under Category C, and the COE price can fluctuate significantly depending on demand and supply. Here's how COE affects commercial vehicles:

1. High Upfront Cost

A rise in COE prices directly increases the cost of acquiring a commercial vehicle. Logistics companies, delivery service providers, and SMEs must budget significantly more just for the right to own a vehicle.

2. Tighter Business Planning

Since COE is valid for only 10 years, business owners need to carefully calculate vehicle depreciation and consider COE renewal if they plan to use the vehicle longer. This impacts long-term business investment decisions.

3. Impact on Service Pricing

High COE prices can lead to increased service charges for transportation, rental, or logistics, as businesses may pass the cost on to customers.

4. Used Commercial Vehicle Market

COE also influences the pricing of used vehicles. When COE prices are high, used commercial vehicles with a long remaining COE period become attractive and cost-effective alternatives.

How Business Owners Can Manage COE Impact

Here are a few strategies to help reduce the COE burden:

• Renting commercial vehicles instead of buying.

• Purchasing used vehicles with longer remaining COE.

• Comparing financing options from different leasing providers.

• Optimizing fleet size based on operational efficiency and actual business needs.

Conclusion: Smart Solutions with Carz World

In the midst of rising COE prices, Carz World offers practical solutions for businesses in need of commercial vehicles. Whether you're looking to lease long-term or purchase new or used commercial vehicles, we provide flexible, cost-effective options tailored to your business needs.

💼 Don’t let COE hold your business back — talk to our team at Carz World today and find the right commercial vehicle solution for your operations!