Certificate of entitlement (COE) premiums for small cars plunged at the latest tender on Wednesday following news that the Government is looking to review the categorisation of COEs.
Transport Minister of State Josephine Teo said in Parliament on Feb 5 that the way COEs are categorised may be fine-tuned. However, no details were ready, although there had been suggestions that cars should be categorised according to their open-market value or OMV, which is their approximate cost price before taxes.
COE for cars up to 1,600cc ended at $78,301 when bidding stopped at 4pm, down from $87,109 two weeks ago, and over $90,000 just last month.
COE for cars above 1,600cc remained firm at $92,667, just a whisker off its previous close of $92,901. The re-categorisation change, if any, is not expected to affect this group. Commercial vehicle COE dipped from $54,989 to close at an 11-month low of $53,489. Motorcycle COE also fell from $1,782 to an 11-month low of $1,512.
Open COE, which can be used for any vehicle type but ends up largely for cars, ended lower at $91,910 - down from $94,890 - partly in response to the plunge in small-car premium.
Observers expect the probable change to level the playing field amongst cars currently in the up-to-1,600cc segment - a grouping that currently contains luxury brands such as Mercedes-Benz and BMW as well as budget names such as Hyundai and Proton.