The COE money making machine

The topic of COE is unequivocally synonymous with the topic of money. It is far from uncommon overhearing
drivers, as well as aspiring would-be drivers, complaining on the duress to pay for the right to drive.

Or in other words, leasing the vehicle one has bought for the period of 10 years.

Furthermore, less than complimentary descriptions are also widely found.

However, is it really a government money making scheme? Being a driver myself, I got curious. Using data from LTA and SingStat, we set out to explore what was in fact happening with the cars (categories A, B and E) on the roads of Singapore.

(See Figure 1 and  2)

Analysing the data we uncover interesting and counter-intuitive insights;

• The COE, and it's refinement over the years, is controlling the number of cars added to the roads. In Figure 1 we are able to illustrate that the significant increase in ratio (i.e. more cars per population) from 2002 has reached a plateau from 2007 with a slight downward trend in 2011.

• The COE’s objective is indeed controlling cars, rather than maximizing revenue. Despite the significant increase of COE price in 2011 we are able to see that the ratio of cars to population had decreased while the revenue is marginally higher than the previous year.

In fact, previous years, with lower COE price, had high COE revenue due to more cars on the road.

Not a money making machine after all, but a measure of control.

Nonetheless, is this merely a perception? An outstanding and interesting question (to the author at least) is; how many of the COE’s issued are held by individuals who already have one or more existing COE's.

In other words, while controlling the number of vehicles on the roads, does the COE provide equal opportunity for vehicle ownership? Or the right to drive?