COE prices for big cars at five-month high

Certificate of entitlement (COE) prices ended mixed in the latest tender yesterday - the last exercise before a new, slightly smaller quota kicks in next month.

The COE price for cars up to 1,600cc or 130bhp finished 5 per cent lower at $32,309. For cars above 1,600cc or 130bhp, it closed 1.1 per cent higher at $41,805.

The premium for the open COE - which can be used for any vehicle type except motorcycles, but ends up mostly for bigger cars - closed 2.5 per cent higher at $42,020.

While the increases were small, they have pushed both premiums for bigger cars to their highest in five months.

The commercial vehicle COE price ended 1.9 per cent lower at $26,001. The motorcycle premium finished 2.3 per cent higher at $3,889.

Motor traders expect premiums to hover at these current levels, with marginal movements up or down - thanks to a smaller-than-expected dip in supply in the November to January quota. The quota for car COEs, for instance, will shrink by only 1.9 per cent in the next three-month period.

Mr Neo Nam Heng, chairman of the diversified Prime group, said the latest results were within industry expectations. He said Category A (cars up to 1,600cc) remains weak, while Category B (cars above 1,600cc) has been fuelled by the renewed vigour of parallel importers.

After a slump last year, parallel importers - who source their cars from overseas dealers instead of manufacturers - have seen a rebound in sales.

The Straits Times understands that this has largely been on the back of more models garnering a favourable banding on the Vehicular Emissions Scheme, which metes out rebates or penalties based on a car's tailpipe pollutants.

 

"Parallel importers are a big force in Cat B," Mr Neo said. "The recent weakening yen has also given those who bring in Japanese cars more margin to bid for COEs."

Christopher Tan

A version of this article appeared in the print edition of The Straits Times on October 24, 2019, with the headline 'COE prices for big cars at five-month high'. Print Edition | Subscribe