Cat A COE price rises by 9.2% to $92,850 after falls in the last two rounds

SINGAPORE - The price of a Category A certificate of entitlement (COE) climbed to $92,850 at the latest tender exercise on Feb 19.

This was 9.2 per cent higher than the

premium recorded at the previous exercise

in early February, reversing a downward trend that began at the second COE tender in January, when the Category A price fell from $93,699 to $93,601. It then tumbled to $85,000 on Feb 5.

Category A COEs are used to register smaller and less powerful cars and electric vehicles (EVs).

At $109,598, the premium for a Category B COE – meant for larger and more powerful cars and EVs – dipped by 1.4 per cent on Feb 19, from $111,104 recorded at the last exercise two weeks ago.

For Open category (Category E) COEs, the premium was $110,002 – $2 higher than before.

Open category certificates can be used to register any vehicle type other than motorcycles, but are almost always used for bigger and more powerful cars.

The commercial vehicle (Category C) COE premium came in at $65,189, 4.3 per cent higher than the $62,506 registered two weeks ago.

At $8,791, the motorcycle (Category D) COE price was 6.1 per cent above the $8,289 recorded previously.

A COE is needed to register a vehicle in Singapore. For most vehicle types, the COE is included in the price of the vehicle.

Motor dealers said the drop in the Category A premium in the Feb 5 exercise boosted interest among buyers.

This was borne out in the number of bids for certificates in this category. There were 2,290 bids, 58.4 per cent more than at the previous exercise.

Mr Ron Lim, head of sales and marketing at Nissan agent Tan Chong Motor, said he was surprised by the spike in the Category A price, even though traders had expected a rebound.

The fear of an increasing backlog of orders that need to be delivered may have driven dealers to bid more aggressively to secure the COEs they need, he added.

Mr Ng Choon Wee, commercial director at Komoco Motors, which distributes Hyundai, observed that in the last five minutes of the exercise, the Category A COE premium was rising at a pace that outstripped the number of new bids entering the system.

This means that existing bidders in the system were revising their bid values upwards to secure COEs.

At the end of the tender, there were 1,141 unsuccessful bids for Category A COEs. These bidders will likely return in subsequent exercises to register the cars that they had sold before.

Mr Raymond Ng, managing director of distributor Eurokars EV, said the bidders that did not manage to get COEs may not be able to place much higher bids than at the latest round, if they are for cars sold when COE premiums were lower. This is because the car price would be based on a lower expected COE value.

This, he said, suggests that it is less likely that the price of Category A certificates will continue climbing.

After the latest tender results, dealers expect prices of Category A COE cars to go up.

Mr Nicholas Wong, chief executive at Honda agent Kah Motor, said raising prices by the full extent of the $7,850 increase in COE premiums is unsustainable because it will be too much to bear for customers.

But Mr Ng from Komoco Motors said that prices have to be raised by between $7,000 and $8,000 because the COE increase is too much for most dealers to absorb.

As for Category B cars, the traders expect vehicle prices to remain at about the same level or to drop no more than $2,000.