We refer to the letter, "Wheeler dealers?" (Today, April 9), which suggests that car owners be allowed to bid for their own Certificate of Entitlement (COE).
Under the current system, vehicle buyers can already bid for the COE themselves. They also have the choice to allow motor dealers to bid on their behalf if this is preferred. In most cases, buyers have chosen the latter option for convenience and perhaps a better package deal for the purchase of the vehicle. With the open bidding system, all bidders have the same access to the prevailing bid price and can make informed decisions on their bid amount. Even when a buyer decides to bid through the dealer, he is still in control as the total price of the car is agreed between the buyer and the dealer prior to the bidding process. In this way, if any dealer bids high for a COE, it is at his own cost and not that of the buyer.
We also have in place a number of restrictions to safeguard the COE system:
- For each COE bid application, bidders are required to place a deposit, which will be forfeited if the successful COE bid is not used for registration of a vehicle within the validity period.
- Individuals are limited to one bid per bidding exercise.
- Successful COE bids for 3 out of the 5 categories (Categories A, B and D) cannot be transferred before the vehicle is registered.
- For Categories C (Good Vehicles and Buses) and E (Open Category), only successful COE bids in the name of individuals are transferable. These have shorter validity of 3 months and can only be transferred once. Successful bids by companies are all not transferable.
- Cars registered using Categories A and B COEs cannot be transferred within the first 3 months. An additional levy is payable if the vehicle is transferred between the 4th and the 6th months.
- The COE rebate of vehicles registered with Open Category COEs will be based on the lower of the quota premium of the Open Category or the vehicle category from the same tender exercise, and capped at 80% if the vehicle is de-registered for export within 2 years from registration.
These restrictions help to deter frivolous or speculative bids which might otherwise deny genuine bidders from getting a COE.
ACTING GROUP DIRECTOR, VEHICLE & TRANSIT LICENSING
LAND TRANSPORT AUTHORITY