SINGAPORE - Those shopping for affordable cars have hit a cost bump, with the certificate of entitlement (COE) price for smaller cars hitting a six-year high on Wednesday (Dec 8) in the latest tender.
The premium for cars up to 1,600cc and 130bhp ended at $57,010, a 3.7 per cent increase from $55,001 at the last tender on Nov 17.
This is the highest amount in that category since November 2015, when it was $59,200.
Premiums also climbed in most other categories in the latest tender.
The COE price for goods vehicles and buses finished 3.4 per cent higher at $45,000, compared with $43,502 at the last bidding exercise.
The premium for larger cars above 1,600cc or 130bhp is also up, at $80,401, compared with $79,601 at the previous tender.
Motorcycle COE price rose to $9,401, from $9,381.
The premium for Open COE, which can be used for any vehicle type but ends up mostly for bigger cars, is the only one to fall, closing about 1.2 per cent lower at $85,000.
A total of 2,569 bids were received for a quota of 1,791 COEs available.
Motor traders told The Straits Times that the premium for smaller cars is likely to keep creeping upwards as the supply of COEs keeps shrinking.
"It is a supply and demand problem," said Mr Neo Nam Heng, chairman of diversified motor group Prime.
"When the supply is so tight, prices move up despite the market sentiment being so weak... If not for the bad sentiment because of Covid-19, Cat A (for cars up to 1,600cc and 130bhp) would have crossed the $60,000 mark already."
However, Mr Neo said COE prices for larger cars and the Open category have risen too aggressively in the past two to three months.
Premiums for these two categories are likely to remain stagnant as there does not appear to be enough momentum to push prices higher, he added.
Yong Lee Seng Motor managing director Raymond Tang said the sharp increase in COE prices shows there is still demand in the market and he expects premiums to keep rising gradually over the next year or so, barring any short-term dips and corrections.
He said premiums for larger cars and the Open category could reach $90,000.
This is especially if the COE quota is slashed again for bidding periods between February and April 2022, or if buying strength bounces back.
"Because the number of COEs allocated is so low... all it takes is for a vehicle model or car agent to do well and premiums will be going up," said Mr Tang.
Latest COE results:
|Category||Current COE premium ($)||Previous COE premium ($)|
|A - Car (1,600cc & below)||57,010||55,001|
|B - Car (above 1,600cc)||80,401||79,601|
|C - Goods vehicle & bus||45,000||43,502|
|D - Motorcycle||9,401||9,381|
|E - Open||85,000||86,001|