COE prices end higher ahead of quota cuts

Certificate of entitlement (COE) prices ended higher across the board yesterday, ahead of a smaller quota next month.

The COE price for cars up to 1,600cc and 130bhp rose by 7.1 per cent to finish at $43,501, the highest since November 2017.

The premium for cars above 1,600cc or 130bhp rose by 2.2 per cent to close at $50,100, the highest since December 2017.

The price for the Open COE, which can be used for any vehicle type except motorcycles but which ends up almost exclusively for bigger cars, rose by 4.9 per cent to finish at $51,900, the highest since May 2019.

The commercial vehicle COE price posted the biggest jump of 14.2 per cent to end at $40,999, the highest since December 2017.

Motorcycle premiums rose by 1.2 per cent to close at $7,589.

For the February-April quota period, there will be 12.8 per cent fewer COEs for car buyers and sellers. The quota for commercial vehicles will see the sharpest drop of 30.5 per cent.

Besides the sharp cut in quota, motor traders said a new emissions scheme for commercial vehicles starting in April will see most, if not all, diesel models attracting a $10,000 tax surcharge. Hence sellers are rushing to clear stock ahead of this.

But Mr Neo Nam Heng, chairman of diversified motor group Prime, said consumers should not rush to buy because a rise in COE prices will negate whatever tax savings they are hoping to get by buying a vehicle earlier.

"Don't fall for the fear tactics," he advised consumers.

Mr Neo also noted that some brands are slashing prices to move stock.

"This is dumping, and it is not sustainable," he said. "What happens when you stop giving these huge discounts?"

Others said the arrival of more Category A cars (up to 1,600cc and 130bhp) will put pressure on Cat A premiums. These cars, including the BMW 116i and Mercedes-Benz GLA180, command higher margins, and allow their sellers to bid more aggressively for COEs.