The last COE prices are simply crazy. The price that I paid for my 1.6L car three years ago can only get me a piece of obscenely expensive invisible paper now. For the COE prices to shoot up the sky, there must be mountains of bids received for the month, which means there must be showrooms full of people buying cars. So much for the purpose of the COE is to deter people from buying cars.
Seriously, if you think that the the real purpose of the COE system is really to deter people from buying cars, then you must also believe that the $100 levy is really to deter Singaporeans from gambling. Which means you are either too pro-government, too rich, or too naive. If the COE system would have worked in keeping Singapore road traffic smooth, then why do we have the ERP system? DUH!
Firstly, why won't the COE system deter people from buying a Toyota Vios in Singapore that costs as much as an Audi A3 Cabriolet in the UK? Because people who buy new cars in Singapore are either too rich, because they have been rich all their lives, or just won 4D/Toto, or received a 2.5 months bonus; or they don't have a choice, because they work till the moon comes up in remote parts of Singapore with limited public transport, like Tuas, or have a handful of kids, parents and maids to transport around. So even if the COE price touches the million mark, they might still consider.
And then for the rest of those who have simply given up on the cannot-make-it public transport, but cannot afford the Audi-priced Vios, the COE system will not deter them from buying a second-hand car. For some of us, this gives a sense of deja vu when the COE prices were just as high about 10 years ago and you can only see P-plates on second-hand cars. In this case, higher COE prices only means it is time for those salespeople to move out of car dealers like Borneo Motors, brush up their smoking skill and get into the booming second hard market.
So in summary, what is the effect of high COE prices? You've still got the same number of cars on the roads, but expect more traffic jams because of more old second-hand cars breaking down.