COE rates dip across the board, except for smaller cars
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The Category A premium which is used for smaller, less powerful cars and electric vehicles bucked the trend to post a 0.83 per cent rise.
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SINGAPORE – Certificate of entitlement (COE) prices ended mostly lower in the latest tender on Wednesday.
Only the premium for Category A, which is used for smaller, less powerful cars and electric vehicles (EVs), bucked the trend to post a 0.83 per cent rise from $96,206 a fortnight ago
The COE price for cars with engines larger than 1,600cc or more power than 130bhp, as well as EVs with power output that is above 110kW adjusted down by 2.48 per cent from $121,000 to $118,002.
The premium for the Open category COE, which can be used for any vehicle type except motorcycles but ends up mostly for bigger cars, ended 1.63 per cent lower at $121,000 from $123,000.
The commercial vehicle COE price finished 1.1 per cent below the previous $83,140, to end at $82,223.
The COE premium for motorcycles also fell, to end at $10,090 – marking a 5.78 per cent dip below the $10,709 posted before.
Motor dealers had expected premiums to fall further, given how quiet their showrooms were in the past two weeks.
One dealer believes that the relatively strong showing in the category for smaller cars may have been influenced by the arrival of more EVs with maximum power output that falls below the 110kW threshold.
The fall in COE premium in the large car category was attributed to the combination of weak demand for cars, as well as dealers using their old Open category COEs, which are transferable, to register customers’ cars.
Just 217 bids were received on Wednesday for Open category COEs, down from 312 bids two weeks ago, suggesting that traders are not in a hurry to stock up on them.
Kah Motor general manager Nicholas Wong noted a surge in bids moments before the exercise closed at 4pm. This is typical behaviour of fleet companies seeing an opportunity to secure COEs at a lower price, he said.
There will be one more tender exercise under the current COE three-month period of May to July.
Industry insiders expect the supply of COEs to increase in the coming quota period, although they are wary about predicting a fall in COE premiums.
The main determinant in calculating COE supply is the average monthly number of vehicles taken off the road over a rolling four-quarter period prior, with a one-month gap for calculation. So the average 12-month deregistration rate up to June will drive the supply for the August-October period.
Monthly car deregistrations in April and May were higher than what was seen between January and March.
Data for June has yet to be released, but dealers are cautiously optimistic that there will be more COEs for tender for the August to October period. Some also point to the one-time adjustment announced in May
Dealers that The Straits Times spoke to estimated that there would be between 50 and 100 more COEs each month across the small and large car categories, with the former getting more.
Mr Wong believes that any positive impact on premiums from having any more COEs for bidding will be diluted by demand from the fleet buyers, adding that there is a lot of “latent demand” for cars.
On Wednesday’s COE results, Mr Neo Nam Heng, who chairs diversified motor group Prime, said: “Consumers should not rush in to buy a car now after the slight fall in COE premiums because this would just push prices up again.”
