Ms Mariam asked for more measures to deter speculative bidding for motorcycle COEs, including tying dealer deposits to the size of their bids, allowing individuals to bid for motorcycle COEs, and providing more transparency on bidding practices.
To this, Mr Iswaran said the current practice of motorcycle dealers bidding and holding temporary COEs (TCOE) in their own name before transferring them to buyers is a “deliberate design feature” that allows buyers to more readily purchase a motorcycle.
The minister also pushed back against the idea that speculative behaviour was the main driver behind motorcycle COE prices going up.
“The fact is the market has already been functioning, and the way we know that is when the price goes up, as it did in some of the earlier cycles when the COE price for motorcycles went up to $13,000 and, subsequently, it came down, the market corrected,” he said.
He added that the recent move to shorten TCOE validity from three months to one month was meant to hasten the return of forfeited COEs to the market.
On raising the bid deposit from $800 to $1,500, he said the Government “exercised restraint and caution” in raising the deposit because if high deposits cause motorcycle prices to rise even further, “then it will harm precisely the group that the Member wants to help”.
3. Open market value as a criterion
Progress Singapore Party (PSP) Non-Constituency MP Leong Mun Wai suggested adding the open market value (OMV) of a car as a criterion for Category A COEs, which are used to register smaller, less powerful cars. This is to ensure affordability and equity, he said.
Mr Iswaran noted that the median OMV of Category B cars, which are bigger, more powerful and tend to be pricier, is about 75 per cent higher than the median OMV of Category A cars.
Hence, there is already a differentiation between the two categories, he said, adding that unlike engine capacity or power output, OMV is not an objective criterion. He said: “There are a lot of other variables. For example, if exchange rates move, the OMV of the car changes. How would you account for that?”