SINGAPORE - Certificate of entitlement (COE) premiums ended mostly higher in the latest bidding exercise on Wednesday (April 6).
The COE premium for cars up to 1,600cc and 130bhp went up by 2 per cent from $71,556 to $72,996.
The COE price for bigger or more powerful cars ended at $98,389, a $500 dip, or about 0.5 per cent lower, from $98,889 at the previous exercise.
The premium for Open COE, which can be used for any vehicle type except motorcycles but mostly ends up for bigger cars, rose by less than 1 per cent from $99,010 to $99,999.
The category for goods vehicles and buses rose by 6.6 per cent from $51,504 to $54,901.
Premiums for motorcycles rose by just $2 to $10,503.
Mr Nicholas Wong, general manager of Kah Motor, reckoned that the high bids in the category for cars up to 1,600cc were likely placed by commercial bidders or fleet operators, rather than private buyers.
"The private-hire and fleet operators are disrupting the market. These vehicles should be taken out from the regular pool, just like the case with taxis," he added.
Until 2012, taxi operators bid for COEs in this category. This was changed to prevent the operators from skewing demand and pushing up premiums.
The Straits Times reported last month that a private-hire operator was in the midst of rolling out 500 electric cars (EVs) in its fleet, which will need COEs in the smaller car category.
The bidding exercise is the second last one under the current quota period, which runs from February to April.
Mr Raymond Tang, honorary secretary of the Singapore Vehicle Traders Association, has observed that some owners of older cars are opting to renew COEs instead of scrapping their vehicles.
Even though the cost of COE renewals moves in tandem with COE prices, it is still more economical than also factoring in the cost of a new car.
The number of vehicles taken off the road in this current quota period is the chief determinant of how many COEs will be made available in the May to July quota period. COE renewals thus have a direct impact on the upcoming quota.
Overall, motor traders expect the quota for the May to July period to be smaller, making it crucial that they secure bids now to fulfil orders rather than risk paying even more later.
In addition, the new power criterion for electric vehicles, which comes into effect from the first bidding in May, is expected to add more pressure on prices in the smaller-car COE category, as some EVs are expected to be moved into this traditionally more affordable class with the change.
Brands that offer EVs which will be recategorised in May are said to have been building up a healthy order bank. The dealers representing these brands will start bidding for COEs from May to put these EVs on the road.