COE prices end mostly flat except for motorcycles
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The price of COEs used for smaller, less powerful cars and electric vehicles (EVs), ended lower by 1.85 per cent from $97,000 to $95,202.
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SINGAPORE – Certificate of entitlement (COE) prices ended mostly flat in the latest tender exercise that closed on Wednesday.
The price of COEs used for smaller, less powerful cars and electric vehicles (EVs) ended lower by 1.85 per cent from $97,000 to $95,202.
The COE premium for cars with engines larger than 1,600cc or more power than 130bhp, as well as EVs with power output that is above 110 kilowatts, ended at $118,001, lower than the previous tender by a dollar. The premium for the Open category COE, which can be used for any vehicle type except motorcycles but ends up mostly for bigger cars, climbed 0.92 per cent higher at $122,110 from $121,000.
The commercial vehicle COE price finished 0.27 per cent below the previous $82,223, to end at $82,001. The COE premium for motorcycles nudged up to $10,501 – marking a 4.07 per cent hike from the $10,090 posted before.
The Land Transport Authority (LTA) announced last Friday that there would be more COEs available from August to October. Some dealers said this has dampened demand for cars in the past weekend as consumers want to see the effect on COE premiums before deciding.
Mr Chong Kah Wei, managing director of Mazda and McLaren at the Eurokars Group, believes that the relatively better showing for Open category COEs may be from dealers who are still working to hit their sales target for the month.
Being transferrable, such COEs can be used to register cars for customers immediately, instead of waiting for the next tender exercise, which is not for another three weeks.
While the total number of bids received at the latest tender was roughly similar to previous exercises, 197 bids were entered for the two types of car COEs in the last 10 minutes or so to the close of the tender.
Industry watchers attribute such bidding behaviour to fleet buyers because dealers which have to deliver customer cars would enter their bids early – and revise them as the tender progresses – rather than risk not securing a COE.
Ms Sabrina Sng, managing director of Polestar, Lotus and insurance at dealership group Wearnes Automotive, said that consumers expecting more COEs being available for bidding in the future – and lower COE premiums as a result – may have to wait longer.
She said that typically the owner of a car that is reaching its 10th year and due to be deregistered will start shopping for a replacement before the car is scrapped.
This means that there can be a lag of three to six months between the demand for a new car and the supply of a COE that comes from an existing vehicle being scrapped.
In other words, demand for cars and COEs will go up before more COEs come into the market.
Some motor traders believe that the measures introduced by LTA in the past months, which include the revision to the COE supply calculation made in January, as well as the one-off adjustment announced in May to bolster supply over several quarters, will have a calming effect on COE premium movements.
This is because there would not be any sharp increases or reductions in the COE supply from quarter to quarter. As such, fluctuations in COE prices will also likely be contained within a narrower band.
Mr Ng Lee Kwang, board adviser of Goldbell Corporation, said dealers prefer COE prices to “creep” than have big swings because “if the COE price drops drastically this round, everyone will wait for the next big drop rather than move in to seal the deal”.
