Cat A COE premium dips 4.8% to $122,000 after three successive highs; Cat B rate falls 6.5%

SINGAPORE – Certificate of entitlement (COE) prices for smaller cars dipped to $122,000 after hitting record highs over the past three tender exercises.

The COE premium for larger cars also slipped to $131,889 at the tender exercise on Oct 23.

Used to register smaller and less powerful cars and electric vehicles (EVs), the Category A COE dropped to $122,000, 4.8 per cent lower than

the record of $128,105

set two weeks ago.

This is the first time that the Category A premium has fallen since June’s first tender exercise, which closed at $96,999.

At $131,889, the price of Category B COEs – used to register larger and more powerful cars and EVs – was 6.5 per cent lower than $141,000 on Oct 8.

Motor dealers said that showrooms have been relatively quiet over the past two weekends after premiums in the two car COE categories climbed further at the last tender. Some people were also travelling over the recent long weekend that culminated in the Deepavali public holiday on Oct 20.

The premium for the Open category (Category E) was down 2.9 per cent from $140,009 to $136,000. Open category certificates can be used to register any vehicle type except motorcycles, but end up mostly for bigger cars.

The commercial vehicle (Category C) COE bucked the trend to post an increase. At $76,801, the latest premium is 3.4 per cent higher than the previous $74,301.

The COE premium for motorcycles (Category D) fell 4.3 per cent from $9,810 to $9,389.

The Land Transport Authority (LTA) said after the close of the tender that COE prices have stayed high because of sustained strong demand. This is despite the number of Category A certificates available for tender rising by 29 per cent year on year. “We advise car buyers and dealers to be prudent in bidding for COEs,” it added.

In all, there were 4,384 bids across the five COE categories on Oct 23, compared with 5,300 bids at the previous exercise. The number of unsuccessful bids also fell, from 2,181 at the Oct 8 exercise to 1,258 at the latest tender.

Industry watchers attributed the high premiums over the last few tenders to buyers rushing in after LTA announced in September that incentives for EVs and hybrids would be cut by up to $10,000 from January 2026.

Associate Professor Walter Theseira, a transport economist at the Singapore University of Social Sciences, said a rebound in COE prices is possible after a drop in premiums, as dealers would lower prices and draw in fresh demand.

However, he said, consumers will not rush in after the latest results if they expect premiums to fall further as more COEs become available for bidding in the future.

The latest tender is the last one under the August to October COE supply period. LTA is expected to announce the number of COEs available for bidding between November 2025 and January 2026 before the first tender exercise in November.

Dr Zafar Momin, an adjunct professor at NUS Business School, described the latest premiums as a “knee-jerk reaction” by buyers, who are holding back following the high prices seen in the previous few rounds. He expects COE premiums to pick up again over the next few tenders, as dealers move to register new cars before the reduced incentives kick in.

Mr Anthony Teo, managing director at Sime Motors, which distributes BYD, said some dealers are hoping that more COEs would be available from November, and were not as driven to secure COEs at this latest round.

LTA has said it will continue to increase the COE quota until supply peaks around 2026.

The number of COEs available for tender in a given three-month period is based on the average number of vehicles deregistered in the previous four quarters. The deregistration rate has been rising since 2023, translating to more COEs being released for bidding.

Mr Ron Lim, head of sales and marketing at Nissan agent Tan Chong Motor, said the latest COE premiums are still significantly higher than before LTA announced cuts to EV and hybrid incentives.

Mr Lim said that if there is no significant increase in COE supply for the upcoming three-month quota period, the demand spike that could be triggered by the latest tender results could send COE premiums rising again.

There was a 1 per cent increase in the number of COEs available for smaller cars in the current August to October quota period over the preceding three months.

Mr Nicholas Wong, chief executive of Honda agent Kah Motor, said this increase was “a drop in the ocean”, which was insufficient to satisfy market demand.

When asked how much of an increase would be enough to bring premiums down, he said: “At least 10 per cent to 20 per cent.”