Hopes among car buyers that a larger supply of certificates of entitlement (COE) would lead to a fall in COE prices this month were dashed yesterday.
COE prices for cars instead rose for Categories A and B, reflecting the firm demand among car buyers and motor dealers with orders in hand, said industry players.
Premiums for Cat A - cars up to 1,600cc and 130bhp - finished at $56,209 at the close of this month's first bidding exercise. This was a marginal increase of 0.6 per cent from $55,889 last month.
Meanwhile, COE prices for Cat B - cars above 1,600cc or 130bhp - climbed by 4.6 per cent to $60,789, from $58,109.
Mr Raymond Tang, first vice-president of the Singapore Vehicle Traders Association, said: "Car buyers are deciding to buy, after seeing the COE prices fall in the past two to three rounds."
Mr Tang said the number of bids put in reflects the "pent-up" demand. There were 2,446 bids in Cat A this time, 24 per cent more compared with the last round, while Cat B received 1,634 bids, a 34 per cent increase.
Mr Nicholas Wong, general manager of Honda agent Kah Motor, said the demand for cars is "outstripping" the COE supply.
For the quarter of August to October, there will be 6,207 car COEs - including the open category - each month, 18.3 per cent more compared to the last quarter.
Mr Wong said at his dealership, bookings have been "steadily increasing" from the start of the year, and sales up till today are about 50 per cent more compared to a year ago.
However, he expects COE prices to soften in time, noting that the Cat A price of $56,209 is still lower than May's high of $68,589.
"It won't drop overnight; it's controlled by the quota. The only thing which changes is demand and that's hard to predict," he said.
Meanwhile, the COE price for the open category, which can be used for any vehicle type, registered a 3.7 per cent dip from $60,101 to $57,885. The motorbike premium fell by 1.8 per cent, from $6,312 to $6,201. The premium for goods vehicles and buses also fell, by 1.4 per cent, from $50,002 to $49,302.