Effective from 19 February 2025, companies must retain ownership of their private-hire vehicles (PHVs) intended for ride-hailing services for a minimum of three years before selling them to individuals.

This move aims to address concerns about the rapid turnover of PHVs into the private car market, which has implications for both vehicle oversupply and Certificate of Entitlement (COE) quotas.  

Previously, companies could sell their PHVs to private buyers after a relatively short period. However, the new regulation mandates a three-year holding period, meaning vehicles registered for ride-hailing purposes cannot be transferred to individual ownership until they have been in service for at least three years.

The LTA believes this measure will help stabilise the vehicle population by reducing the influx of used PHVs into the private car market, ensuring that the overall number of vehicles remains more controlled.

In addition, this policy will allow COE quotas to be managed more effectively, preventing a sudden surge of second-hand vehicles that could distort market demand.  

This policy adjustment carries significant implications for various parties. Ride-hailing companies will need to adjust their fleet management strategies, ensuring vehicles are maintained for longer periods.

Drivers looking to purchase used PHVs may find a reduced supply in the market, potentially leading to higher prices. On the other hand, those who rent their vehicles might experience more stable rental rates due to the extended use of existing fleets.

For consumers, the extended holding period might raise concerns about the quality and condition of PHVs. However, with proper maintenance and regular servicing, companies can ensure that older vehicles remain roadworthy and provide a comfortable experience for passengers.

The effects of this policy will unfold over time, but it is clear that the LTA aims to create a more sustainable and balanced vehicular ecosystem in Singapore.

Read more automotive news at AutoApp, or check out our latest videos on YouTube and on TikTok!

The Land Transport Authority (LTA) has recently announced that it will increase the Certificate of Entitlement (COE) quota for vehicular categories A and B over the next few quarters. This one-time adjustment aims to reduce supply volatility which was the root cause behind the massive price spikes.

This announcement was in response to the record-breaking COE prices, with prices in Category A crossing the S$100,000 threshold for the first time on Apr 19, 2023. Similarly, category B premiums rose to a record high of S$120,889 during the same bidding exercise.

Open category COEs, which can be used for any vehicle type but are mainly used for large cars, hit an all-time high of S$118,990.

Increase in quota

For Q2 of 2023 – between the months of May to July – the COE quota will increase from 9,575 to 10,431.

This will result in a 24 per cent increase for Category A, while Category B will see an increase of 15 per cent. This will be in effect for the remaining five bidding exercises for this quarter.

Additionally, LTA will also bring forward the guaranteed deregistrations of five-year non-extendable COEs which are due to expire. This will happen whenever supply is projected to be higher, and these will be distributed over the next few quarters. The total supply of such COEs is about 6,000. 

Don’t expect prices to fall drastically

Although COE premiums have fallen slightly in the latest bidding exercise, COE prices are likely to remain high for a while, due to limited supply and increasing demand.

Delivering a ministerial statement in parliament on Monday, Transport Minister S Iswaran said Singapore “must expect the long-term trajectory for COE prices to be upwards”.

“Even as LTA makes the one-time adjustment to the COE quota in categories A and B, I would like to emphasise two points. First, this will help to lessen, but it will not eliminate, volatility in supply. There will still be a degree of supply fluctuation due to historical factors and broader market conditions. Second, the long-term upward trend of COE prices due to rising incomes and zero vehicle population growth will not abate.”

LTA has also stated that the new measure does not alter the zero Vehicle Growth Rate on the overall car population. 

Read more automotive news at AutoApp, or check out our latest videos on Ignition Labs TV!