Customers throng showrooms after COE premiums drop, but some say prices are still high

SINGAPORE – Customers turned up at motor showrooms on Saturday, driven by the plunge in certificate of entitlement (COE) premiums on Wednesday, but their hopes of inking a deal were kept in check as car prices had not retreated that much.

At Honda agent Kah Motor’s showroom in Leng Kee Road, around five groups of customers were spotted when The Straits Times turned up at 3pm.

Among them were a man, who wanted to be known only as Mr Nicholas, 34, and his wife, 29, who is nine months’ pregnant.

The car they had their eye on – a Honda Jazz – was going for $163,999, down from $173,999 last week. But even with the $10,000 savings – a quantum that matched the premium fall in the Category A COE needed for that car – they did not bite.

Mr Nicholas, who works in the IT industry and borrows his father’s car when he needs one, said: “The prices are still very high, and we hope the COE premium will fall further. I would say a $40,000 to $50,000 COE is reasonable.”

But the

decrease in COE prices across five categories

at the most recent tender exercise on Wednesday has benefited distributors. Mr Gary Quek, sales manager at Kah Motor, said it received 20 per cent to 30 per cent more inquiries in the three days since the COE premiums plunged. The number of walk-in customers also climbed by the same margin.

“It was quieter last weekend, when COE prices were at an all-time high. Compared with last weekend, sales have picked up, and it is definitely much better,” he added.

Mr Jason Lim, managing director of Eurokars Auto BMW, said inquiries and sales accelerated by about 30 per cent to 40 per cent in the past few days.

“We are seeing new interest from consumers who initially put off purchases, but came back into the market due to this drop in COE premiums. They are generally asking about the best offers we can give,” he added.

However, Mr Quek said the general sentiment is that cars are still not very affordable.

“There’s anticipation that the COE prices would fall further because the (Government) announced there would be more COEs.

“But for customers who only have a few more months left on their COE, they don’t really have the time,” he noted, referring to owners of cars with COEs that are due to expire soon, and have to shop for either new or used models.

On Wednesday, the premium for Category B – for larger, more powerful cars and electric vehicles (EVs) – fell by $40,000, while that for the Open category – which can be used for any vehicle type except motorcycles but ends up mostly for bigger cars – dropped by nearly $33,000.

The premium for Category B COEs at $110,001 is down 26.67 per cent from the $150,001 record set in the previous round three weeks ago. This is the biggest fall in COE premiums since 1995.

The COE cost for Category A, for smaller, less powerful cars and EVs, ended at $95,689 – a 9.73 per cent drop from $106,000 at the last tender exercise.

This is the first tender exercise under the new quota period from November to January

with a bigger COE supply.

On Saturday, at the Eurokars Auto BMW showroom in Leng Kee Road, around 20 people kept the staff busy at 2pm. Some families came with children who eagerly hopped into the test cars while their parents spoke with the salesmen.

Mr Abdul Zamil, 41, who bought a second-hand BMW 216i GT online less than a month ago for around $149,000, came to assess the deals after the COE price reversal.

The business owner, who was with his wife and 13-year-old son, wanted to find out if he could trade in his car for a BMW X1.

But Mr Zamil said that despite the around $10,000 drop in the Category A COE premium, the cost of the X1 dipped by only around $2,000. He said the salesman linked this to zero stock availability for that model for now.

Mr Zamil said he would wait and see if the COE price would roll back further in the next six months. “I felt very happy when the COE prices dropped. Because when COE price keeps going up, buying a car becomes a dream.”

But time may not be on Mr Nicholas’ side. While there are other alternatives, such as tapping private-hire vehicles to get around, his wife, who declined to be named, said these would not be as convenient as owning a car.

Said Mr Nicholas: “The prices are still quite prohibitive. But with a child, the equation changes quite a bit because you need to ferry them around.”