Car showrooms see more traffic as COE prices drop

Customers at the Honda showroom in Alexandra Road yesterday. Some showrooms reported an increase in the number of walk-in customers. Prices of new cars have fallen as COE prices drop to their lowest in at least five months in the latest COE tender on
Customers at the Honda showroom in Alexandra Road yesterday. Some showrooms reported an increase in the number of walk-in customers. Prices of new cars have fallen as COE prices drop to their lowest in at least five months in the latest COE tender on July 8.ST PHOTO: KEVIN LIM

New car prices lower by thousands of dollars as COE premiums are expected to fall further

Customers are flocking to car showrooms following the latest drop in certificate of entitlement (COE) premiums.

The July 8 tender saw COE prices fall to their lowest in at least five months, with the exception of the motorcycle premium.

Prices of new cars have fallen by thousands of dollars.

The Volkswagen showroom in Alexandra Road reported a "significant" increase in the number of walk-in customers.

A spokesman declined to provide figures but told The Straits Times yesterday: "Prices are going down because dealers have lowered their prices, in anticipation of a further drop in COE premiums, to attract more to buy now instead of waiting.

"But there are still people deregistering their vehicles, so they will need to buy a new car."

The price of a Volkswagen Jetta, for example, now starts from $109,800 - down from $116,800 under the previous COE tender.

The COE premium for cars up to 1,600cc and 130bhp closed 3.8 per cent lower at $58,700. The premium for cars above 1,600cc or 130bhp fell by 8.4 per cent to end at $65,501. The price for Open COE, which can be used for any vehicle type but ends up mainly for bigger cars, fell by 7.4 per cent to $69,001.

A spokesman for Citroen said: "There is about a 30 per cent increase in walk-in customers, and slightly better sales."

He also declined to provide sales figures but said that on average, Citroen cars are about $3,000 cheaper after the latest COE tender. "People are still waiting for the COE premiums to drop even further, especially with the latest quota announcement," he said.

Among other models to fall in price is the Toyota Corolla Altis, which now starts from $114,888 compared to $118,888 last month.

A Honda City starts at $112,999, down from $114,999 previously.

Last week, the Land Transport Authority said that there will be more COEs from next month. Premiums are likely to fall as a result.

The number of car COEs - including Open certificates - will rise by 18 per cent to 6,207 a month.

Mr Neo Tiam Ting, managing director of Think One Automobile, which brings in parallel imports and deals in second-hand cars, noted there is a higher number of cars due for scrapping this year, so that also means a higher demand.

"Most people who scrap their cars will get a new car so definitely there will be more people buying," he said. "But some would go for second-hand cars as they can't afford the downpayment."

Mr Jed Goh, 59, who works in the marine industry, bought a new Toyota Wish yesterday. "Last week, this cost about $2,000 more," he told The Straits Times. "I may also get rebates depending on the next COE. This price is good enough. I'm not holding out as I have to sell my nine-year-old car before its value drops even further."

IT consultant Wilson Tan, 35, who is looking to replace his seven-year-old Volkswagen Jetta, said: "Hopefully, the COE premiums will go down even further but if the car price is good, we will get it. Cars here are just expensive, so we are not expecting a huge drop anyway."

A version of this article appeared in the print edition of The Straits Times on July 20, 2015, with the headline 'Car showrooms see more traffic as COE prices drop'. Print Edition | Subscribe