I propose that Certificate of Entitlement (COE) bidding be based on dollar value per horsepower (S$/hp). For instance, if there are 1,000 COEs available in the bidding exercise, the 1,000 highest bidders would still end up being the successful bidders.

However, they would be paying according to the horsepower of the car they decide to buy. If one were to buy a 500hp car, then one would pay S$x/hp x 500hp = S$500x for one’s COE. If one decides to buy a 150hp car, then one pays S$150x for the COE.

The advantages are that this system does away with categories and allows the successful bidder to buy any car, and there is a correlation between a car’s value and the COE paid.

That is, the bigger the horsepower, the higher the car’s value and the more the COE costs, which is fairer.

Under the present system, the COE price decreases as a percentage of a car’s value as the latter increases: An S$80,000 COE costs 53 per cent of a S$150,000 car and 16 per cent of a S$500,000 car.

In a S$/hp bidding system, the COE premium as a percentage of a car’s value would be in the same ballpark for all except supercars.

The system would allow the buyer of a small car to outbid the buyer of a high-performance car; small cars could then make a comeback.

And, with individuals bidding for the COEs, car distributors would have to be more transparent in their pricing, which would not include COE.