COE prices edge up for cars but dip for others

Certificate of entitlement (COE) prices ended mixed in the latest tender yesterday, with premiums for cars creeping up slightly and that for others sliding.

The COE price for cars up to 1,600cc and 130bhp rose by 1.1 per cent to close at $46,009, and that for cars above 1,600cc or 130bhp rose by 1.1 per cent to finish at $47,000.

The Open COE premium, which can be used for any vehicle type but ends up mostly for bigger cars, closed at $47,510, up 1.8 per cent.

The premium for commercial vehicle COE slipped by 4.9 per cent to end at a three-month low of $44,213. Motorcycle premium dipped to $6,503, down 1.3 per cent.

Motor traders said buying sentiment remains cautious, especially for high-end cars. Bidding is expected to stay subdued in the next tender two weeks from now as more COEs are expected in the next quota period starting next month.

Mr Michael Lim, president of the Singapore Vehicle Traders Association, said he expects the new quota - effective May to July - to have "5 to 10 per cent more COEs on average".

Commenting on the results, he said the number of bids submitted remained constant and "there is still a big backlog". But because "people are waiting for the new (COE) allocation", bids were relatively restrained, with car premiums rising between 1.1 and 1.8 per cent.

Mr Lim, however, noted that the Cars@Expo retail fair slated on April 23-24 should drive up sales volume.

Motor traders also noted that 40 per cent of Open COEs were unused in the latest tender. The 237 COEs will be carried forward to the next tender. "If not for this, Open would have fallen," said Mr Ron Lim, general manager of Nissan agent Tan Chong Motors. "And those bidding for Category A (cars up to 1,600cc) could have made use of Open."

Industry observers said the unusually high percentage of unused Open COEs could be due to manipulation on the part of a bidder who wanted to keep the premium high. This could be because he had previously secured this COE at higher values, and the certificates might be fast expiring. Open COEs are valid for only three months, unlike the other car COEs, which are valid for six months.

Christopher Tan

A version of this article appeared in the print edition of The Straits Times on April 07, 2016, with the headline 'COE prices edge up for cars but dip for others'. Subscribe