SINGAPORE - Certificate of Entitlement (COE) premiums for larger cars surged past $90,000 in the latest bidding exercise on Wednesday (Feb 23).
Premiums for cars above 1,600cc and 130bhp rose to $93,590, 8.7 per cent above the $86,102 in the previous exercise.
Open category COE, which can be used for all vehicle types except motorcycles, followed closely. It hit $93,102, which was 7 per cent above the previous $87,000.
The last time premiums in these two categories breached the $90,000 level was in 2013.
This was the first bidding exercise after Finance Minister Lawrence Wong announced higher taxes for luxury cars during his Budget speech last Friday. This takes effect for all cars registered with COEs obtained from this exercise onwards.
The new tiered additional registration fee is targeted at higher-end cars with an open market value (OMV) in excess of $80,000. The OMV refers to the approximate cost of the car before taxes. The majority of cars sold in Singapore are not expected to be affected by the new tier.
Mr Ron Lim, head of sales and marketing at Tan Chong Motors, said the surge in premiums for open and large car categories came as a surprise. Observers had expected last week’s tax announcement to dampen demand.
Ms Wong Siew Lee from parallel importer Garage R attributed the high premiums to the low COE quota, likening the situation to a shrinking pie that is just “too small to feed the number of players in the market”.
She added: “If I don’t secure my COEs to deliver cars this time round, it will likely be even more expensive in March.”
Premiums for small cars up to 1,600cc and 130hp rose to $63,000, a 3.7 per cent increase from $60,761.
Commercial vehicle COE ended at $46,501, 5.7 per cent above the $44,001 achieved in the last exercise.
Motorcycle COE premiums continued their sustained high to hit $10,589, up 5.8 per cent from the $10,010 before.
Mr Fude Poh, general manager of S.1 Motoring, a large motorcycle retailer group, also pointed to the low quota. “There were 950 motorcycles registered in January this year, and just 847 pieces of COE available for bidding that month. Clearly, the quota is not enough,” he said.
S.1 Motoring has 14 branches in Singapore. Mr Poh said the 90 COEs it obtained this time round - out of the 420 available - are not sufficient to fulfil the demand from these outlets.
For the car categories, motor traders expect the overall quota to be lower than last year. Thus, they reckon that COE premiums will not come down any time soon.