Tan Kin Lian - Perspectives Allocation of COEs
Singapore introduced the COE system in 1990. The available COEs in each month are awarded based on an auction system, i.e. to those who bid above the threshold price.

This system caused the price of COE to fluctuate according to the auction in each month. It was $150,000 in one month and dropped by $40,000 in a following month. This is a bad system.

Is there an alternative system?

In major cities in China, such as Beijing, Shanghai, and Guangzhou, obtaining a license to buy a car involves a system known as a "license plate lottery" or "auction."

License Plate Lottery: This system randomly assigns license plates to applicants through a lottery. Prospective car buyers must register and participate in this lottery system. However, due to high demand and limited plate availability, the chances of winning a license plate through this method can be quite low.

License Plate Auction: Some cities also conduct auctions for a limited number of license plates. Individuals interested in purchasing a car bid for these plates, and the highest bidders are granted the opportunity to buy a plate. The costs for these plates can be quite high due to the competitive bidding process.

The purpose of these systems is to control the number of vehicles on the road and curb the issues related to traffic congestion and pollution in densely populated urban areas. Additionally, there might be restrictions or incentives for purchasing electric or hybrid vehicles to promote environmentally friendly options.

The specific rules and regulations regarding car ownership and obtaining a license plate can vary between cities in China and may change over time as local authorities adapt their policies to manage traffic and environmental concerns.

This is my understanding of the system in these cities.

A batch of licenses (COEs) are distributed at a fixed price and awarded based on a ballot. Another batch is awarded based on auction, i.e. pay as you bid.

I think that it is time for us to change our system and to adopt the practice in China.

Tan Kin Lian
 

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