Cat A COE supply cut again from August to October, but overall quota up 0.2%

SINGAPORE –The number of certificates of entitlement (COEs) available for bidding from August to October will inch up by 0.2 per cent to 19,085.

The Land Transport Authority (LTA) announced on July 24 that 7,134 Category A COEs will be available between August and October – a 4 per cent dip from the 7,434 certificates available between May and July.

This translates into 50 fewer certificates in the category for each of the upcoming tender exercises between August and October.

Category A certificates are meant for smaller and less powerful cars and electric vehicles (EVs).

COEs give people the right to own a vehicle in Singapore, and tender exercises are conducted twice a month.

This is the third consecutive quarter in which the supply of Category A certificates has dropped.

For Category B certificates, meant for larger and more powerful cars and EVs, the supply will rise by 6.2 per cent for the next three months, from the current 5,205 to 5,527 certificates.

The Open category (Category E) COE supply will drop by 0.2 per cent, from the current 1,526 to 1,523 certificates.

While Open category COEs can be used to register any vehicle type other than motorcycles, dealers typically use them for larger, costlier cars. As these certificates are transferable, motor traders often secure them for the flexibility to register cars without waiting for the next tender exercise.

Taken together, the supply of COEs from categories B and E will increase by 4.7 per cent. The number of COEs in these two categories available for each tender will be about 53 more than that in the current quota period.

There will be 1,836 commercial vehicle (Category C) COEs available for bidding from August to October, a 5.4 per cent increase from the current 1,742 certificates. There will be 3,065 motorcycle (Category D) COEs, down 2.5 per cent from 3,145 in the current period.

The COE supply in a given three-month period is mainly determined by the rolling average number of deregistrations in the previous four quarters.

In recent years, LTA has rolled out measures that have had an impact on COE supply.

From May 2023, to tackle supply troughs, some COEs due to expire in the next projected supply peak were brought forward for redistribution. When vehicles registered with certificates that were brought forward are eventually deregistered, the COEs will not be returned to the pool for bidding.

From February 2025, LTA also started injecting additional COEs across the vehicle categories. Under this initiative, up to 20,000 COEs will be added to the overall supply over several years.

For the August to October period, 200 of the 7,134 Category A certificates will be redistributed from those due to expire in the peak years, as well as from the injections. This is lower than the 1,119 such certificates for the May to July period.

For the upcoming period, Category B did not get any redistributed COE, identical to the previous quota period.

The latest COE supply announcement came two days after the most recent COE tender on July 22, when the Category A premium eased to $126,000 after hitting a record of $129,000 earlier in July.

Ng Choon Wee, commercial director of Komoco Motors, the distributor of Hyundai cars, noted that the combined quota of 7,050 certificates in categories B and E will be marginally lower than the 7,134 Category A certificates.

He predicts that COE premiums for Category A are likely to climb and possibly surpass those for Category B over the next few months.

Ng added that dealers may bid for Open category certificates to fulfil the demand for Category A COEs.

And owing to the large number of Category A car models on the market, he believes that COE premiums for Category A and the Open category will remain high from August to October.

In the larger scheme of things, there is no point in reading too much into the marginal changes in supply across the COE categories, said Walter Theseira, a transport economist at the Singapore University of Social Sciences.

This is because 44.2 per cent – or about 288,500 – cars on the road are six to 10 years old, meaning that they are nearing the end of their COE lifespans and are likely to be deregistered by the end of the decade.

Meanwhile, Theseira noted that around 34,400 cars, or 5.2 per cent of the car population here, are 10 to 13 years old, which means that these cars could be deregistered when their owners feel that COE prices are optimal.

This will add to the pool of deregistrations and beef up the supply of COEs in the coming years.