Car prices expected to fall as COE premiums dip across the board
Sign up now: Get ST's newsletters delivered to your inbox
COE premiums were down for all categories at the tender exercise on June 5.
PHOTO: ST FILE
Follow topic:
SINGAPORE – Good news for those shopping for a set of wheels – car prices are expected to drop after certificate of entitlement (COE) premiums fell in all categories in the latest tender exercise on June 5.
The price of COEs for smaller, less powerful cars and electric vehicles (Category A) dropped by 4.9 per cent to $88,200, from $92,700 set two weeks ago.
The premium for larger, more powerful cars and electric vehicles (Category B) was down by 4.8 per cent to $100,607, from $105,689 at the previous tender.
The Open category COE – almost always used for bigger and more powerful cars – closed at $101,600, down 3.2 per cent from $105,002.
Commercial vehicle COE premiums ended at $70,589, a dip of 2 per cent from the previous $72,001, while for motorcycles, the premium fell 3.5 per cent to $8,989, from $9,311.
The fall in Category A premium was not due to a lack of demand. When the tender closed at 4pm, the category saw 1,467 bids entered, slightly more than the 1,444 bids two weeks ago.
Mr Nicholas Wong, chief executive of Honda agent Kah Motor, said that the bids are likely for cars that were sold earlier at relatively low prices, which hamstrung dealers from putting in higher bids that would have chased up the COE price.
Other motor dealers said that some of the bids would be for cars sold during The Car Expo event in April. Sales contracts typically give dealers three months, or six COE tender exercises, to deliver the cars.
The dip in Category B and Open category COE prices followed a slight uptick in both categories in the previous round.
Mr Wong said the cause of the fall in Category B COE premium was straightforward: there were fewer bids entered, and this resulted in a lower price. The number of bids in this category fell 11.4 per cent to 974 this round – the fewest bids since the first exercise in 2024.
The weaker demand for Category B COEs was also reflected in the way bidding progressed for the Open category. The price of Open category COEs remained at $1 until the final seven minutes or so to the exercise’s closing. In the end, Open category COE premium ended $993 above that for Category B.
Open COEs can be transferred within three months after they are secured. This allows motor dealers to use them to register cars for customers immediately, instead of having to wait for the next tender exercise to bid under the buyers’ names.
Overall, motor dealers said that car sales have been slow in the past few weeks, as many families with school-going children are travelling during the school holidays.
Mr Vincent Ng, an automotive consultant, expects the latest COE results to bring a rush of customers to the showrooms in anticipation of lower car prices.
Mr Anthony Teo, managing director of BYD distributor Vantage Automotive, expects dealerships to reduce car prices by between $2,000 and $4,000.
Hailing the fall in COE premiums as a “big window of opportunity” for sales, Mr Wong said that depending on the model, Honda vehicles will drop by “at least $5,000 to $6,000”.