COE prices fall across the board, biggest dip of 7.4% in large cars category

The biggest drop was in the category for cars above 1,600cc or 130bhp and electric vehicles with more than 110 kilowatts of power. PHOTO: ST FILE

SINGAPORE - Certificate of entitlement (COE) prices fell across all five categories in the second last tender exercise for 2022 that closed on Wednesday afternoon.

The biggest drop was in the category for cars above 1,600cc or 130bhp and electric vehicles (EVs) with more than 110 kilowatts of power. The premium for this type of COE fell by 7.4 per cent to end at $105,501, down from $113,881 at the previous tender exercise.

The COE price for smaller and less powerful cars and EVs dipped by 2.3 per cent, from $90,589 to $88,503.

The commercial vehicle COE price came down slightly by 0.4 per cent to end at $81,501, below the record of $81,802 posted at the last tender.

In the motorcycle category, the COE premium ended at $12,100, down 3.9 per cent from $12,589.

Open category COEs, which can be used to register any type of vehicle except motorcycles, ended 3.1 per cent cheaper at $110,524, down from $114,009.

Bidding was more muted than in past tenders, with the bulk of bids registered in the final 10 minutes. Up until 3.51pm, the premium for large car COEs remained at $1.

Industry watchers said the volume of bids that came in the final minutes suggests that these may be from companies or fleet buyers that saw an opportunity to net a cheaper COE. 

In an unusual development, the Open category COE was the first to break $1, ahead of other categories. Typically, bidding for such COEs starts to liven up only after the large car COE premium hits a relatively high price.

Mr Ng Choon Wee, the commercial director at Komoco Motors, said dealers may be shoring up Open category COEs in preparation for the Singapore Motorshow in January, as sales for both small and big cars have not been strong. These COEs can be freely transferred after they are secured, which allows motor dealers to offer immediate registrations to buyers.

The motorshow is scheduled to run from Jan 12 to 15, and dealers with Open category COEs can register the cars promptly before the Chinese New Year, which falls on Jan 22.

Ms Corinne Chua, managing director for Volvo at Wearnes Automotive, said the dip in premiums was largely expected as some car buyers would be deterred by high COE prices while others may be travelling.

Dealers may have wanted to secure Open category COEs in case the drop in premiums generates some demand and pushes prices up at the next tender, she added.

Dealers said BMW, which appointed Eurokars Auto as its second dealer in 2022, was among the brands pushing to meet year-end targets.

Mr Jason Lim, managing director of Eurokars, said they have collected “quite a few orders” for models in the small car category. The German premium brand recently launched a new compact SUV, the X1, which is muscling in on the small car COE segment. The new model is $10,000 cheaper than its predecessor in the larger car category, based on listed prices in November.

Mass-market brands said their showrooms continue to be quiet, especially after the COE price for small cars breached the $90,000 mark two weeks ago, nearing the all-time record of $92,100 set in 2013.

Used car sales are also down. Mr Jason Tan from Lake View Credit, a dealership for new and pre-owned cars, estimates that the used car sales volume is 10 per cent lower than in October.

As a result, used car prices are coming down as dealers have sufficient stock in hand. This will also affect trade-in values for buyers shopping for new cars. Mr Tan cited how he would offer $3,000 less today for a used Toyota Altis. The same car would have been valued at $75,000 in October.

With COE premiums dipping, dealers are expected to revise prices to drum up sales in the remaining weeks of 2022.

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