The $50 certificate of entitlement was the first crash in the COE system. Those bidding to buy a “big car” (1601-2000cc in engine capacity) had a merry Christmas in 1997, when their COE premiums fell from $64,100 to $50. One of them was Torque’s core contributor, Dr Andre Lam, who used his $50 COE to register his brand new DB8 Honda Integra Type R brought in by Kah Motor.
It was a fluke result of a closed tender system, one in which bidders were bidding blindly.
Mah Bow Tan, the Minister for Communications at the time, commented: “It came as a surprise to many people that the COE prices came down so much. But it demonstrates once again what the Government has maintained all along – COE prices are determined by market forces, in other words, supply and demand. When times are not so good, like now, people are more cautious, which is quite understandable, demand comes down, so prices come down. The COE of $50 is one of those flukes, aberrations. I don’t think it is going to continue, but we will monitor the situation, and if there is a necessity, we will act.”
The Government eventually did act, rejigging the four COE categories into two so as to instil more price-stability into the system.
