Senior Minister of State for Transport Josephine Teo mentioned in Parliament yesterday that the annual allowable vehicle growth rate could be reduced to zero – down from 0.25 per cent today.
However, Ms Teo did not mention when such a cut could come into effect and stated that this was “likely in future”. She went on to mention that there were “no immediate plans” to smoothen out the cyclical nature of COE supply by holding COEs back in times of surplus for periods of low supply.
Naturally, there is much concern over such a move as it could potentially lead to higher costs to purchase a car.In the future, a zero car growth rate could lead to higher COE prices and many disappointed aspiring car owners.
But one should not be overly alarmed by this news as data on de-registrations shows there is likely to be a significant increase in supply of COEs in the coming months.