In recent years, the escalating costs associated with Singapore's Certificate of Entitlement (COE) have sparked a significant debate: has owning a car become a luxury for the average Singaporean? The COE, a mandatory certificate required to own and operate a vehicle in Singapore, has seen premiums soar, making car ownership increasingly unaffordable for many.
In the first quarter of 2026, COE premiums for Category A vehicles, which include smaller and less powerful cars, rose by 7.3% to $109,501. This increase was part of a broader trend, with premiums for larger and more powerful cars (Category B) climbing by 2.1% to $121,634. These rising costs have led to a noticeable shift in consumer behavior.
The surge in COE prices has made car ownership less appealing, prompting many to consider alternative transportation options. Rental car usage has seen a significant uptick, with figures reaching a record 95,857 vehicles in 2025. This represents a 41% increase since 2021, indicating a growing preference for temporary vehicle access over long-term ownership.
The Land Transport Authority (LTA) has acknowledged these challenges and is actively reviewing the COE system. The aim is to improve the categorization of cars and ensure that the system reflects the current market dynamics. This review comes in response to concerns that the existing framework may no longer serve the needs of today's car buyers.
Despite these efforts, the question remains: for the average Singaporean, has owning a car become a luxury? The rising COE premiums suggest that, for many, the dream of car ownership is becoming increasingly distant. As the LTA continues its review, it remains to be seen how the system will evolve to address these affordability concerns.