Impact of Marginal Bidders in COE Auctions Disproportionately Influencing Clearing Prices across Categories A and B

Ms He Ting Ru asked the Acting Minister for Transport (a) whether the Ministry has analysed the marginal bidder effect in COE auctions, including how a small number of relatively price-insensitive corporate bids, supported by tax treatment or in-house financing arrangements, may disproportionately influence clearing prices across Categories A and B; and (b) if so, whether further details will be shared.

Mr Jeffrey Siow: The Certificate of Entitlement (COE) bidding is a uniform price auction, with the clearing price set at the highest unsuccessful bid plus $1. Across bidding exercises in 2025, three in four Category A and B COEs were won at bids within 5% of the eventual clearing price. This is also why a Pay-As-You-Bid (PAYB) bidding system, which is often suggested, will not bring down COE prices, as all bidders pay the clearing price regardless of what they bid.

There is evidence to suggest that corporates are, in fact, price sensitive when bidding for COEs. In the most recent bidding exercise that ended on 21 January 2026, the rise in COE prices for Category A and B saw a significant drop in the proportion of bids won by car-leasing companies to 4% in Category A and 5% in Category B. In 2025, car-leasing companies won around 10% of Category A and B bids.