COE prices for cars mostly unchanged; premium for commercial vehicles up 2.9%

SINGAPORE - Certificate of entitlement (COE) prices for cars stayed largely unchanged, while the premium for commercial vehicles rose by 2.9 per cent at the latest tender exercise on July 23.

This comes after premiums

rose across the board a fortnight ago

.

At $101,102, the premium for a Category A COE, meant for smaller and less powerful cars and electric vehicles (EVs), remained unchanged from the previous exercise.

The premium for a Category B COE, meant for larger and more powerful cars and EVs, was $119,101, decreasing by a marginal 0.4 per cent from $119,600.

The price of an Open category (Category E) COE was $120,000, 1.3 per cent higher than the $118,500 at the previous exercise. Open category COEs can be used to register any vehicle type other than motorcycles, but are almost always used for bigger and more powerful cars.

The commercial vehicle (Category C) COE climbed 2.9 per cent from $66,689 to $68,600.

At $9,511, the price of a motorcycle (Category D) COE went up by 1.3 per cent from $9,389.

A COE is needed to register a vehicle in Singapore and is usually included in the price of a vehicle.

The latest tender exercise is the last one under the current three-month COE quota period. The authorities are expected to announce the number of COEs available for tender from August to October soon.

Mr Neo Tiam Ting, director of Think One, a company that deals in commercial vehicles, said demand for COEs has increased after the Early Turnover Scheme (ETS) for small vans and buses ended on March 31. The scheme, introduced in 2013, encourages the early replacement of older and more pollutive vehicles.

Without the ETS, businesses have to bid for a fresh COE instead of being able to transfer the COE of an eligible vehicle that they already own to a new one by paying a fee.

Mr Neo expects demand for commercial vehicle COEs to get another bump when the ETS for heavy commercial vehicles ends on Dec 31, propping up the COE price.

For passenger cars, Mr Jason Lim, managing director of Eurokars Auto BMW, said the dealership has focused on selling larger cars with more aggressive offers after the premium for Category A COEs rose by $2,978 to end at $101,102 at the previous tender. This is because the hike in the Category B premium was relatively less significant than in Category A.

While he declined to give details, he said more Category B models were sold than two weeks ago.

Mr Raymond Ng, managing director for Eurokars EV, said sales for its MG cars have been good following the previous tender exercise, noting that while COE premiums are “on the high side”, they are still lower than the prices in May.

Some dealers may be holding on to Open category COEs to register cars sold in the final days of July to meet monthly sales targets, said Mr Ng. Or, noted Ms Corinne Chua, managing director of Volvo at Wearnes Automotive, they may be accumulating them ahead of the longer three-week gap between bidding exercises from Sept 17 to Oct 8.

Open category COEs are transferrable and can be held for up to three months.

Mr Keith Pang, a company director at Alpine Group, which distributes American sports car Corvette, said the Open category price of $120,000 could reflect where traders expect the Category B premium may be at in the short term.

“However, this may shift quickly depending on market sentiments and the upcoming (COE) quota announcement,” he added.