SINGAPORE - Certificate of entitlement (COE) premiums ended higher in all categories at the latest tender exercise on Wednesday (July 20), with the Open category setting a new high for the second time in a row.
The premium for the Open category COE, which tends to be used for larger cars, ended at $114,001, a 3.1 per cent increase from last round's $110,524.
Premiums for cars with engines above 1,600cc or 130bhp, as well as electric vehicles (EVs) with power output above 110 kilowatts rose by 2 per cent from $107,800 to $110,003.
For smaller and less powerful cars and EVs, COE premiums went up by 1.2 per cent from $78,001 to $78,899.
The commercial vehicle COE premium went up from $54,001 to $54,889, a hike of 1.6 per cent.
The price of motorcycle COEs rose by $21 from $10,889 to $10,910.
The latest tender exercise is the last one under the current three-month quota period.
Even higher COE premiums may be on the horizon, say motor dealers, who anticipate a significant reduction in the supply of COEs for August to October.
Industry watchers attribute this expectation as the main driver behind Open COE premiums breaking the record again in the tender exercise.
At the previous tender exercise that closed on July 6, the premium in this category was $110,524, surpassing the record set in 1994.
Unlike the two COE types for cars that must be tagged to owners, Open COEs are transferrable. As they can be held for three months before they have to be used, such COEs would become even more valuable if there is a drop in supply of COEs for the August to October period.
An executive from a premium German brand dealership said motor traders would be determined to secure whatever COEs they need in this round in order not to pay even more for them in the coming months.
When the exercise closed on Wednesday afternoon, a total of 834 bids were received in the category of COEs for smaller and less powerful cars, down from 900 submissions recorded previously. This suggests that the dealers may not have many orders to fulfil.
The bidding in this category of COEs also progressed relatively slowly in the last hour of the tender exercise. It was only in the final two minutes or so that the price jumped by more than $2,000.
Mr Ng Choon Wee, commercial director for Komoco Motors, suggested it was likely that the final push came from fleet operators and not car dealers looking to register customer cars.
Motor traders who need COEs would not risk putting in a large volume of bids so near to the end of the tender exercise. If they are late and fail to secure the COEs, they would not be able to deliver cars to their customers. Fleet operators, on the other hand, may act at the last minute because they spot an opportunity to nab a potentially cheaper COE.
