COE prices rise across all categories except motorcycles; Cat B premium up 3.2% to $116,670

SINGAPORE – Certificate of entitlement (COE) prices rose across the board, except for motorcycles, in the latest exercise on June 18.

The price of a Category B COE – meant for larger and more powerful cars and electric vehicles (EVs) – rose by 3.2 per cent to $116,670, from $113,000 recorded at the

previous tender on June 4

.

In Category A, meant for smaller and less powerful cars and EVs, the premium was $98,124, an increase of 1.2 per cent from $96,999 at the last exercise.

The COE prices for cars crept up after two consecutive rounds of declines.

The price of an Open category (Category E) COE was $116,889 – 2.6 per cent higher than the $113,900 at the previous exercise.

Although Open category COEs can be used to register any vehicle type other than motorcycles, they are almost always used for bigger and more powerful cars.

The commercial vehicle (Category C) COE premium was $65,000, climbing 4.8 per cent from $62,000 in the previous exercise.

The motorcycle (Category D) COE premium went against the trend, falling 4.4 per cent from $9,000 to $8,600.

COEs give people the right to own and use a vehicle in Singapore, and these certificates are usually included in the price of the vehicle.

Overall, 4,207 bids were received across all categories – 4 per cent higher than two weeks ago.

Motor dealers told The Straits Times that they expected COE premiums for cars to increase in the latest exercise, given that prices dropped in the past two rounds.

Mr Ng Choon Wee, commercial director of Komoco Motors, which distributes Hyundai, said potential car buyers may have taken the opportunity to make their purchases at a time when COE premiums were slightly lower than in preceding tenders.

Some brands also held roadshows after COE prices dipped in the last round, and secured a substantial number of orders, Mr Ng added.

Ms Corinne Chua, managing director of Volvo at Wearnes Automotive, also observed higher showroom traffic over the past two weeks after COE premiums dropped, adding that interest levels were “not too bad”.

But Mr Nicholas Wong, chief executive of Honda agent Kah Motor, is of the view that the increase in premium for Category A was largely owing to motor dealers’ desperation to put cars on the road – either from fulfilling a backlog of orders or securing COEs in advance.

This is because the price for Category A COEs rose even though the number of bids received for the category remained almost the same – at 1,647 bids, compared with 1,691 bids in the June 4 exercise.

Mr Wong said this suggested that the pressure on pricing was too high, even in a weak market where the number of bids did not increase significantly.

Looking ahead, Mr Ng said it is likely that premiums will continue to trend upwards in the next exercise.

He predicted that the Category B price may go up to $120,000 in the next exercise, as the 382 excess bids for the category in this tender were more than double that in the previous exercise.

Noting that Category A premiums in May’s bidding exercises closed at $103,009 and $102,501, he said he expects the price to climb past the $100,000 mark, as there is a longer three-week gap till the next tender on July 9.

Mr Wong, however, said the results in the next exercise would still depend on the aggressiveness of motor dealers, and he anticipates softer demand – and hence lower premiums – because of the school holidays.