SINGAPORE - Certificate of entitlement (COE) prices have ended mostly higher, with the premium for big cars breaching the $70,000 mark for the first time in more than six years.
At the latest tender on Wednesday (Sept 22), the COE premium for cars up to 1,600cc and 130bhp finished 2.1 per cent higher at $48,000. The COE premium for cars above 1,600cc or 130bhp closed at $68,310, or 9.1 per cent higher than two weeks ago.
The premium for the Open COE, which can be used for any vehicle type except motorcycles but which ends up mostly for bigger cars, ended 8.2 per cent higher at $70,002.
Both premiums for big cars are now at their highest since June 2015.
Elsewhere, the commercial vehicle COE premium ended 2.5 per cent lower at $39,000. The motorcycle premium slid from its record to end 6.2 per cent lower at $9,089.
Besides the impact of a smaller quota, motor dealers have pointed to strong demand from new foreign buyers as one reason for the surge in COE premium for bigger cars.
Mr Nicholas Wong, general manager of Honda agent Kah Motor, said: "It's crazy. The gap between the premium for small cars and big cars is now $20,000 - the widest ever. It's abnormal."
Mr Ron Lim, head of sales and marketing at Nissan agent Tan Chong Motor, said: "Frankly, I am baffled. The market is definitely weak. So really, I can't explain the huge number of bids for Category B (big cars) and Open."
Industry watchers said the surge could have been attributable to Tesla, which is still clearing a sizeable backlog of orders. Thus far, the American electric car company has managed to deliver only a trickle of cars.
Others said private-hire operators are renewing their fleets in the light of tighter regulations. These companies, which have a total of about 40,000 cars, have always been a huge influence on COE prices.
Yet, others reckon the traditional rush to meet annual sales targets as the year starts to draw to a close has prompted dealers to start rushing for volume. Typically, fatter profit margins for bigger cars allow them to bid most aggressively for COEs for such cars.