SINGAPORE - The certificate of entitlement (COE) premium for smaller cars crossed the $100,000 mark for the first time on Wednesday to reach a record high of $103,721.
New records were also set in the larger car and Open categories at the close of Wednesday’s tender exercise. Motor dealers attributed the price increases to a mix of strong sales performance at the Cars@Expo event and expectation of a lower quota of COEs from May to July.
The COE premium for smaller cars up to 1,600cc and 130bhp, as well as for electric vehicles (EVs) with up to 110 kilowatts of power, finished at $103,721, up 7.48 per cent from the previous high of $96,501 at the April 5 tender.
For larger cars and more powerful EVs, the COE premium ended at $120,889, a 2.02 per cent increase over the previous high of $118,501 set two weeks ago.
The price for the Open category COE ended at $124,501, up 4.63 per cent from $118,990. This is the highest price ever posted for any category of COE.
The motorcycle COE premium went up by 1.48 per cent, from $12,001 to $12,179.
Commercial vehicle COE – applicable to vans, trucks and lorries – was the only category that fell, dipping 1.91 per cent from $76,801 to $75,334.
Industry watchers said the dip was largely expected, as demand for such COEs has fallen. Dealers had already rushed to beat the April 1 deadline, when incentives for cleaner light vans and buses were reduced and a new emission testing protocol came into effect.
Brisk sales at Cars@Expo last weekend helped drive up the demand for car COEs, sources said. A total of 17 car brands from authorised distributors took part in the two-day event, though dealers declined to disclose exact sales numbers.
Motor dealers were also more anxious to secure COEs at the last tender under the current three-month quota period, as they expect fewer COEs to be available in the next three months.
Since February, the monthly supply of COEs available for bidding in a given three-month period has been determined mainly by the average number of vehicles taken off the road in the previous four quarters, or 12 months.
While the Land Transport Authority has yet to publish the March deregistration data, motor traders have noted that there were fewer vehicles taken off the road in January and February. Dealers who have orders to fulfil would want to secure COEs on Wednesday, rather than risk paying even more in the coming months should premiums rise further due to less supply.
Some dealers, like Mr Michael Wee, managing director of Eurokars EV for MG, are concerned that customers for smaller and less powerful cars will stay away from showrooms after the price of the COE for such cars breached the $100,000 mark.
For some models in this segment, the COE premium would be two or three times higher than the price of the car itself.
Mr Neo Tiam Ting, the president of the Singapore Vehicle Traders Association, believes that COE premiums for both car categories can go even higher.
He pointed to companies that are supplying cars for ride-hailing services as a key driver behind the demand for COEs in recent years.
These companies, which grow their fleets aggressively and push up the COE premium in the process, are able to pass on the higher cost in the form of relatively small increases in daily rental rates, he noted, while private buyers have to stomach the premium hike in one go with a bigger loan.
