Singapores Vehicle Quota System (VQS), which came into effect in May 1990, is part of a series of measures to optimize traffic flow by managing the growth of vehicle ownership to acceptable levels. Under the VQS, motor vehicles are classified into several categories, with a separate licence quota for each category. For categories A, B, and D, the licence is non-transferable.
The Land Transport Authority (LTA) determines the quota for each category every year. In order to register a new vehicle, the would-be-buyer must bid for and obtain a licence, referred to officially as a Certificate of Entitlement (COE). The COEs can be obtained through an auction, the COE electronic Open Bidding System, which is held twice a month (fortnightly). The Quota Premium (QP) represents the price for a COE. The QP is the price of the highest unsuccessful bid plus $1 for that category e.g, if there are 250 in the quota for a particular category for that fortnight, the QP is the bid price of the 251st ranked bid plus $1, which everyone whose bids rank from 1 to 250 pays. Bidders who successfully obtain a COE have to register the vehicle within 3 (for categories C and E) and 6 months (for categories A, B and D) respectively. The COE is valid for 10 years. After this period, the vehicle needs to be deregistered or the COE has to be renewed by paying a Prevailing Quota Premium (PQP), which is the 3 months moving average of the QP.
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