COE premiums fall across the board in last tender of 2023
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The COE price for smaller cars finished at $85,000, while the premium for bigger models ended at $110,001.
ST PHOTO: GIN TAY
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SINGAPORE – Certificate of entitlement (COE) prices ended lower across the board at the last tender of 2023.
At the close of bidding at 4pm on Dec 20, the premium for Category B COEs, which are for bigger, more powerful models, ended at $110,001 – chalking up the biggest drop of 15.4 per cent.
The premium for Open category COEs closed 11.2 per cent lower at $118,388. This category of COEs can be used for any vehicle type except motorcycles, but ends up almost exclusively for bigger, more powerful cars.
The COE premium for Category A – for smaller, less powerful cars – finished at $85,000, or 3.4 per cent lower than in the previous tender two weeks ago
The commercial vehicle COE premium fell by 2.2 per cent to close at $69,423 – the first time it has fallen below $70,000 in more than a year. Meanwhile, the motorcycle COE premium slid by 8.7 per cent to finish at $9,002.
While COE prices have fallen appreciably since their highs in October – when prices rose to as high as $158,004
Industry watchers expect car COE prices to rebound when the Singapore Motorshow kicks off in the second week of January 2024. But overall, they expect prices to ease further in 2024.
Mr Neo Nam Heng, chairman of diversified motor group Prime, said: “I have been saying prices will be on a downward trend in 2024 because of a bigger supply of COEs. In addition, the new Vehicular Emissions Scheme (VES) will see prices of many popular cars rising by around $10,000. COE prices will have to fall to make up for that.”
He said he had expected prices on Dec 20 to “drop more”.
Similarly, Mr Nicholas Wong, chief executive of Honda agent Kah Motor, said: “Prices could have crashed. They were very weak right up to the last few minutes of bidding.”
He added that car dealers have already priced their models according to the new VES, and “many buyers were put off” by the new rates.
“If not for opportunistic bids placed by the fleet operators, car COEs would have crashed,” he said, adding that he also expects prices to fall further in 2024.
Ms Sabrina Sng, managing director of Polestar and Lotus at multi-franchise motor group Wearnes Automotive, said the latest results were not surprising as “the market has been very quiet”.
“Half of Singapore is away,” she said. “And those who had wanted to buy had already bought.”
But Ms Sng is not as optimistic about further price drops in the near term, adding that COE prices are likely to remain close to where they are now “for the next three to six months”.
She noted that there is pent-up demand from a group of motorists who typically change cars “every three to five years”, although COE price movements will also depend on how many more COEs will be brought forward from the bumper supply years between 2025 and 2027.
In a Facebook post in November, Acting Transport Minister Chee Hong Tat said: “I want to reiterate our earlier statement that (the) Ministry of Transport and Land Transport Authority will ensure the supply of COEs for Categories A, B and C (commercial vehicles) will continue to increase in 2024, till the peak supply years in 2026 and 2027.
“I have explained in Parliament how we are doing so via the ‘cut-and-fill’ approach, and we will uphold this commitment. The cut-and-fill approach will also reduce the peak-to-trough ratios and smoothen the COE supply structurally.
“I hope the increase in supply will give potential car buyers greater assurance that there is no need to rush into the market now.”
