COE prices for most cars slip a bit

Customers at a used car showroom at Turf City.
Customers at a used car showroom at Turf City.PHOTO: ST FILE

Fall would have been greater if not for longer break between tenders, industry players say

Certificate of entitlement (COE) premiums ended mixed in yesterday's tender as an enlarged quota cushioned a surge in buying interest.

The premium for cars up to 1,600cc and 130bhp slid 0.7 per cent to close at $57,089 and that for cars above 1,600cc or 130bhp dipped 0.1 per cent to finish at $62,101.

The price of the Open COE, which can be used for any vehicle type but ends up being used mostly for bigger cars, was hardly changed at $61,010 - just $9 more than its previous close three weeks ago.

Motor industry players said premiums would have fallen more this round if not for the longer-than- usual break between tenders.

The previous bidding exercise was three weeks ago, instead of the usual two. This has allowed car dealers more time to collect orders.

Usually, a bigger order bank would translate into higher premiums. But a bigger supply of certificates in the current quota period helped to mitigate this effect.

"Prices would have dropped if not for the three-week gap," said Mr Steve Poh, group managing director of diversified motor dealer Motorway. He added that buying interest is strong, as "you can get a new car for under $100,000 now".

Others said people going away during the week-long school holiday, and political rallies in the run-up to the General Election tomorrow may have diluted showroom traffic.

Even so, Mr Poh said "there is already a lot of backlog (of orders), with some based on a $50,000 COE".

Hence, he said, while premiums are on the downtrend, they are unlikely to go below $50,000 this year.

"Companies are also chasing numbers as they have to meet manufacturers' sales targets by year-end," he added.

Meanwhile, the commercial vehicle COE price crept up by 0.6 per cent to end at $46,801. The motorcycle COE price rose by 6.5 per cent to hit a five-month high of $6,512.

A version of this article appeared in the print edition of The Straits Times on September 10, 2015, with the headline 'COE prices for most cars slip a bit'. Print Edition | Subscribe