We refer to Mr John Francis Khng’s letter, “Why is car population declining” (ST, 21 October 2015).

The supply of COEs is determined by two main factors – replacement COEs for vehicles that have been deregistered and the additional COE quota given by the prevailing annual vehicle growth rate.

When a car is deregistered, the COE will be recycled and added to the supply of COEs for bidding, albeit in the next quarter.

In the last two years, the number of cars deregistered has indeed risen.  Although this should have translated into higher COE supply, the effect was not felt immediately due to the slight lag. 

In February 2014, we further refined the COE system so that new quotas were determined every quarter rather than six months, reducing the lag effect and mitigating the extent of the temporary reduction.    

We thank Mr Khng for the opportunity to clarify.

Helen Lim (Ms)
Director, Media Relations
Land Transport Authority