COE premiums continue to rise, with Open category rising to $98,890

COE for cars up to 1,600cc and 130bhp rose by 8.7 per cent to $68,501, from $63,000 at the previous tender. ST PHOTO: CHONG JUN LIANG

SINGAPORE – Certificate of Entitlement (COE) premiums ended higher across the board on Wednesday (March 9).

Category A COE, for cars up to 1,600cc and 130bhp, rose by 8.7 per cent to $68,501, from $63,000 at the previous tender.

Premiums in Category B COE, which are for cars above 1,600cc or 130bhp, went up by 1.4 per cent to $94,889, from $93,590.

Open category COE, which typically ends up being used for larger cars, climbed to $98,890, up 6.2 per cent from $93,102. This is the highest since January 2013 when premiums closed at $97,889. 

Premiums for commercial vehicles went up by 5.1 per cent from $46,501 to $48,889. 

COE premiums for motorcycles continued to set new highs, increasing by 7.7 per cent from $10,589 to $11,400. 

The bidding results surprised some in the industry.

Mr Ng Choon Wee, commercial director at Komoco Motors, said that he had expected Category A premiums to “move around $2,000 but not jump by more than $5,000”.

Since the first bidding exercise in January, premiums in this category have increased by $10,902, an increase of 18.9 per cent.

He did not think that the rise was caused by the announcement made in Parliament on Tuesday to move more mass-market electric vehicles into Category A.

“This only applies in May. It is just too soon for anyone to react this way,” he said.

Mr Nicholas Wong, general manager of Kah Motors, said the results may have been driven by speculators.

“The showrooms have been quiet in the recent weeks, so who is pushing up prices in Category A?” he said.

Open Category COEs must be used to register a car (or any vehicle type other than motorcycles) within three months. They are also transferable.

Mr Wong suggested that the Open COE bidding may have been driven by traders who have used up all their stock of older Open COEs.

Following the Budget announcement, additional taxes would be applied to the most expensive cars registered with COEs secured from the second bidding in February onwards.

Using an Open COE secured before this deadline to register ultra-high end cars can translate to big savings for the buyer.

Motor traders who declined to be named have been offered prices in the region of $100,000 to $110,000 for these older Open COEs. These COEs would have been secured at earlier bids priced between $83,889 to $87,000.

“Dealers may be back in the market to pick up more Open category COEs since they would have used them up following the February deadline,” Mr Wong added.

“Overall, we are in a situation where there are increasingly more players in the face of a shrinking COE quota. This means that we do not have the visibility to know how premiums will develop in the coming bids”, said Mr Ng. 

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