COE premiums down for all vehicle categories
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This is the second consecutive time that prices have fallen after the previous exercise.
PHOTO: ST FILE
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SINGAPORE – Certificate of entitlement (COE) premiums fell across all categories at the latest tender exercise on Nov 6 – the second consecutive time that prices have fallen after the previous exercise.
At $99,889, the price of a Category A COE, which is used to register smaller, less powerful cars and electric vehicles (EVs) is 2.9 per cent below the $102,900 mark set on Oct 23.
For Category B COEs, meant for larger, more powerful cars and EVs, the premium dipped 5.2 per cent to $108,001 from $113,890.
The premium for Open category COEs (Category E) also fell.
At $109,000, the latest price was 5 per cent lower than the previous price of $114,700.
Although such COEs can be used to register any vehicle type other than motorcycles, they almost always end up being used for larger, more powerful cars.
The price of Category C COEs, for commercial vehicles, ended at $68,340, 6.3 per cent lower than the $72,939 from two weeks ago.
The price of motorcycle COEs (Category D) dipped by 5.2 per cent, from $9,589 to $9,089.
This was the first tender exercise under the new three-month quota period, where there are 3.6 per cent more COEs
Some dealers said the announcement by the Land Transport Authority in October on the release of more COEs over the next few years
Reflecting lower interest in Category A COEs, 10.7 per cent fewer bids were received for this category than at the exercise held two weeks ago. For Category B, demand was up by 6.6 per cent.
Mr Lee Hoe Lone, managing director of Premium Automobiles, noted that the number of unsuccessful bids in Category A has fallen compared with the previous round. This suggests that there may be not enough new orders to push up premiums. He said: “Fewer and fewer customers for Category A cars are willing to pay over $90,000 for COE.”
With the latest result, the Category A COE price is $8,112 below Category B, the narrowest gap between the two categories.
As the Category A COE price closes in on Category B’s, buyers may move to bigger cars, said Mr Lee.
Wearnes Automotive managing director Sabrina Sng said that demand for Category A COEs is fuelled by new models in this category. “Remember that it is the dealers who are bidding for COEs and their bids are based on the orders that they have, whether they are from The Car Expo or because their stocks have arrived,” she added.
Organised by SPH Media, which publishes The Straits Times, The Car Expo was held at the beginning of October.
Depending on the contracts, the sellers can have up to four months to secure the COEs needed to deliver the cars sold.
Dealers are unsure of how COE premiums will develop over the remaining three tender exercises in 2024.
Mr Keith Pang, Alpine Group’s director, said: “Based on experience, when the COE price drops, more customers will come to the showroom. Of course, when more customers come in, the chance of closing deals will also be higher.”
Mr Ernest Tan, director of new ventures at Vincar, the authorised distributor of GAC Aion, said there is a possibility that premiums may rise slightly at the last exercise in December, when dealers will be trying to clear their stock for the year.
Kah Motor chief executive Nicholas Wong does not expect the number of customers to surge after the latest tender results, and hopes that premiums can trend further downwards.
He said: “Prices for Category A have to come down to about $70,000. Then we will see the rush. In the short term, I don’t think COE prices will drop much... A slide maybe, not an avalanche.”
