COE prices drop across all categories

Premiums for certificates of entitlement (COEs) fell across all categories in the latest bidding exercise yesterday.

The premium for cars up to 1,600cc and 130bhp ended at $68,699, 5.9 per cent lower than the $72,996 from the last exercise.

For cars larger than 1,600cc or more powerful than 130bhp, the COE premium is now at $90,002 - 8.5 per cent below the last exercise's $98,389.

The COE premium for commercial vehicles has gone down 5.3 per cent to $52,002, from $54,901.

For motorcycles, the COE price continued to edge downwards to end at $9,801. This represents a 6.7 per cent fall from the previous round's $10,503.

Open category COE, which can be used to register any type of vehicle except motorcycles, fell by 4.2 per cent to $95,801 from $99,999.

Yesterday's bidding exercise is the last one under the current quota period, which is from February to April.

The Land Transport Authority (LTA) announced last week there will be 14.3 per cent more COEs available for bidding from May to July than in the current period.

The increase will be spread across all types of COEs except for the one used by larger cars. That category will be cut by 4.2 per cent.

The overall supply of 11,951 COEs is still low when compared with the 16,010 COEs for the same period last year. But the slightly more generous total quota that applies from the next exercise was seen as a significant influence behind the latest bidding results.

In previous tender exercises, the bulk of the bids was received from 3.40pm or so. Yesterday, COE prices for all categories, other than the one for commercial vehicles, started moving upwards only after 3.50pm. The price increments were also more gradual than usual.

Mr Ng Choon Wee, commercial director at Komoco Motors, said the bidding behaviour reflected the weak new car market driven by the prevailing high COE premiums.

From next month, the COE category for smaller cars, which typically has lower premiums than the larger car category, will include electric vehicles (EVs) with power output of up to 110kW.

Hyundai is among those with EV models that will benefit from the revised categorisation. Since the announcement, the brand has pre-sold some of its EVs ahead of the revision taking effect. The company will be bidding in the next round to secure the needed COEs to put these cars on the road.

Other companies with applicable EV models are doing the same. Collectively, they will put pressure on COE prices from next month.

Last month, the LTA implemented revisions to the bidding process for motorcycle COEs, after prices hit an all-time high of $11,400 at the first exercise last month.

Increasing the bid deposit from $200 to $800, and halving the validity period for a secured COE from six months, seemed to have stopped the upward trend for motorcycle COE prices in subsequent tender exercises.

But Mr Rex Tan, president of the Singapore Motor Cycle Trade Association, said the lower COE prices in the latest tender is more a result of the larger supply of COEs for bidding in the next three months than a direct result of the revisions. He added that it is still too early to tell if the measures are having the desired effect.