SINGAPORE - Certificate of entitlement (COE) premiums for larger and more powerful cars reached a new record as prices for most categories rose on Wednesday (Aug 17).
Only the Open category saw a dip.
The premium for cars with engines larger than 1,600cc or 130bhp, as well as electric vehicles (EVs) with more power than 110 kilowatts went up by 4.7 per cent from $107,001 to $112,001, breaking the record of $110,003 set on July 20.
The price of COEs for smaller and less powerful cars and EVs ended 9.9 per cent higher at $87,889, up from $80,000.
Commercial vehicle COE premiums rose by 5.4 per cent from $56,089 to $59,090.
The price of motorcycle COEs increased by 0.9 per cent, from $11,000 to $11,101.
Open category COEs, which can be used to register any type of vehicles other than motorcycles, ended slightly cheaper at $112,001, representing a dip of 0.9 per cent from $113,000. The premium is still hovering near the all-time high of $114,001.
Motor traders said the results were largely expected, as there has been talk of strong sales over the last weekend, both from brands that participated in the Cars@Expo event, as well as other dealers that benefited from the buzz surrounding the trade show.
There were more bids at this tender compared with the previous one, reflecting the stronger sales performance. For instance, Category A had 835 bids, up from 689.
The price rally for smaller car COEs also started earlier than usual. The premium was already at $80,001 with more than 30 minutes to go before the exercise closed, which gave more time for prices to climb further.
In contrast, the premium for Open category COE, which rose very quickly at the last exercise, trailed behind the COE price for larger cars.
Mr Raymond Tang, honorary secretary of the Singapore Vehicle Traders Association said these are “signs of a healthier market situation” as it means that dealers have actual orders to fulfil, as opposed to chasing after Open category COEs in anticipation of future orders.
He reckons that consumers who really need a car may be coming to terms with the higher COE premiums, and thus are starting to come into the market for both new and used cars.
Mr Ng Choon Wee, group commercial director at Komoco Motors, said the large number of unsuccessful bids would roll over into subsequent tenders, meaning that premiums would not come down as dealers have to deliver the cars.
The next tender exercise in September is three weeks away, one more than the usual two-week interval. The longer gap has typically led to higher premiums, as dealers have more time to collect orders.
Mr Nicholas Wong, Kah Motor’s general manager, said that under the current situation where the supply of COE is so low, motor dealers are faced with either “bleeding to secure the COE or facing cars being stuck in storage".