Pay-as-you-bid system can tame COE premiums

The bull run of Certificate of Entitlement (COE) premiums can be tamed a bit if we adopt a system of pay-as-you-bid (“S’poreans must ditch COE herd mentality”; June 14, and “COE prices soar after Govt relaxes vehicle financing restrictions”; June 9).

Someone who wants a COE regardless of price may place high bids. Such a person will drive up the bidding while not necessarily paying what he has bid for, because under the current COE system the final price will be S$1 more than the highest unsuccessful bid. Such a buyer can have his cake, and eat it.

I do not mind these people having their cake, but not to the point where it bars others in Singapore from owning cars, such that only the rich have the cash to buy one.

If the COE system were to be one of pay-as-you-bid, then there will be no reckless bidding. In this scenario, a person who bid, say, S$50,000, would have to cough up the same amount, while if I bid S$25,000, I would pay S$25,000. Both of us are happy. I am afraid the other person may even envy my bid.

Technology is advanced enough for us to do manage all the price differentials under such a system efficiently. The Land Transport Authority should again consider this, to create a more beneficial system for citizens.