SINGAPORE - Certificate of entitlement (COE) premiums breached the $100,000 mark in two categories on Wednesday (June 8), the first time since December 1994.
Premiums for cars with engines above 1,600cc or 130bhp, as well as electric vehicles (EVs) with power output above 110 kilowatts, rose by 5 per cent from $95,889 to $100,684.
The premium for the Open category COE, which tends to be used for larger cars, ended at $100,697, a 5 per cent increase from last round's $95,901.
Motor traders said they had expected COE prices to increase due to the three-week interval between tenders, which gives dealers more time to collect orders. They also attributed the rise to various brands holding road shows and online promotions to close deals.
Premiums in the other three categories also rose. The price of COEs for cars with engines up to 1,600cc and 130bhp, or EVs with power output of up to 110kW, rose by 8.5 per cent from $68,001 to $73,801.
The commercial vehicle COE premium went up from $51,501 to $53,002, marking a rise of 2.9 per cent.
The price of motorcycle COEs rose by 5.3 per cent from $9,490 to $10,000.
In December 1994, the COE premium was $110,500 for cars above 2,000cc. It beat the record of $105,000 set in the Open category for the previous month.
The record COE price was logged during an earlier iteration of the vehicle quota system, where there were eight categories of COEs instead of the current five.
In the three months that followed, premiums fell significantly as the Government rolled out measures to stop COE speculation. This included disallowing the reselling of vehicles within three months of purchase and imposing an additional fee for resale in the next three months.
Motor dealers generally do not expect COE premiums to come down significantly this time like it did after the records set in 1994.
Brands such as Audi and Toyota have held road shows since the last COE bidding exercise in May, while BMW ran promotions on its online channels as well as at the showroom. Such activities tend to boost sales.
Other car company representatives said that while showroom traffic has been largely consistent with that in earlier months, the orders picked up during the additional week between tenders meant that they needed to secure more COEs at this latest exercise.
Ms Corinne Chua, Wearnes Automotive's managing director for Volvo Cars, pointed to the number of bids received as an indication of how COE premiums will develop in the coming tender exercises.
In the category for larger and more powerful cars, there were 851 bids chasing after 528 COEs available - more than in earlier tenders.
As companies bid for such COEs only when there are actual orders, it means that the 323 unsuccessful bids will be entering the next tender for the dealers to register the cars.
In the last tender, there were 181 unsuccessful bids with a similar quota of COEs available. This means that it is less likely for COE premiums to fall significantly.
Car companies will also have to price their cars based on the latest COE prices.
Mr Eddie Loo, managing director of CarTimes Automobile, said: "I don't think we want to be known as having the most expensive cars in the world, but it is looking that way."
Mr Raymond Tang, honorary secretary of the Singapore Vehicle Traders Association, said Wednesday's results were a natural outcome of the low supply of COEs available for bidding.
While consumers may baulk at the high premiums, just as they did in March, when it hit $98,889, he believes that "after one or two months, people will come to accept the $100,000 COE premium".
Ms Sally Chua, 52, who works in the hospitality industry, bought a new car two years ago and is still coming to grips with COE premiums hitting six figures.
"I literally jumped out of my chair when I received the news alert," she said. "With the COE alone costing $100,000, how much do you need to afford a new car today?"