Cat B COE price falls 5.3% to $105,001, below Cat A for the first time since 2020
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The fall in Category B COE price comes after the announced cut in PARF scrap car rebates.
ST PHOTO: CHONG JUN LIANG
- Mass-market car COEs exceeded premium car COEs since 2020, with Category A reaching $106,501 and Category B dropping to $105,001.
- New lower PARF rebates halved maximum payouts to $30,000, mainly impacting expensive cars. Its full market effect is anticipated in future tenders.
- Experts link high Category A COEs to demand for lower-powered EVs, attracting Category B buyers. They suggest the current COE system needs an overhaul.
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SINGAPORE – For the first time since 2020, certificates of entitlement (COEs) for mass-market cars cost more than those for premium cars at the close of the latest tender exercise on Feb 20.
The COE premium for larger and more powerful cars and electric vehicles (EVs) fell by 5.3 per cent to $105,001 at the first COE tender since Prime Minister Lawrence Wong announced on Feb 12 that preferential additional registration fee (PARF) rebates would be significantly lowered
A Category B COE cost $110,890 at the previous tender that closed on Feb 4.
The Category A premium, meant for smaller and less powerful cars and EVs, increased by 0.2 per cent from $106,320 in the previous exercise to $106,501.
The Open category premium fell by 2.7 per cent, from $116,000 to $112,890. Category E certificates can be used to register any vehicle type except motorcycles, but usually end up being used mostly for bigger cars.
As such certificates are transferable, they give motor dealers the flexibility to register cars without having to wait for the next tender exercise.
At $74,999, the price of commercial vehicle (Category C) COEs is up 0.3 per cent from $74,801 two weeks ago.
The premium for motorcycles (Category D) dropped by 3.6 per cent, from $8,289 to $7,989.
A COE gives a person the right to own and use a vehicle in Singapore. The reduced PARF rebates apply to cars registered with certificates secured from this round onwards.
After the Feb 20 exercise closed, the Land Transport Authority (LTA) said COE prices remained high, reflecting sustained demand, noting that the supply of Category A COEs peaked in the last quarter, while the Category B COE supply continues to increase.
LTA said: “We strongly advise car buyers and dealers to be prudent in bidding for COEs.”
Experts attributed the high Category A premium to the continued popularity of lower powered EVs, which includes demand from Category B car buyers switching over. The real impact of the PARF rebate, they say, will be seen only in future tenders as consumers come to understand the policy.
The PARF rebate is the amount that owners get when a car is deregistered by the 10th year. This is a proportion of the upfront tax paid during registration.
Under the revised scheme, the maximum rebate amount is halved from $60,000 to $30,000, which impacts mainly the more expensive cars. Across the board, the PARF rebate is reduced by 45 percentage points. In the 10th and final year, a car registered under the new scheme qualifies for 5 per cent of the tax paid upfront as a rebate, down from 50 per cent.
Ms Corinne Chua, managing director of Volvo at Wearnes Automotive, said that prices of Category B COE models were lowered after the premium for such certificates fell by $10,744 at the previous round. After the PARF rebate announcement on Feb 12, some dealers dropped prices further in a bid to capture sales.
As car prices include the cost of securing COEs, the lowered selling price of Category B cars limits the dealers’ ability to put in higher bid prices.
Mr Nicholas Wong, chief executive of Honda agent Kah Motor, said that car sales volume would have fallen as car dealerships were closed during the Chinese New Year period. He believed that the rise in the Category A COE price came from Category B car buyers switching over.
Singapore University of Social Sciences economist Walter Theseira said that the appeal of Category A COE electric cars includes how they tend to be as well-equipped as the more powerful Category B versions, yet do not incur as much road tax. He said that the revised PARF rebate nudges more consumers to pick Category A cars over the equivalent Category B versions because of the relatively lower cost of ownership.
Associate Professor Theseira said that with carmakers being able to tweak the power of their combustion engines and electric motors, separating car COE categories by power output to differentiate a mass-market car from a premium one is no longer viable, adding: “To me, this highlights why the Category A and B COE system is just creaking and needs an overhaul.”
