SINGAPORE - The supply of certificates of entitlement (COE) will drop by 11.5 per cent for the three months from August to October under a revised counting method aimed at reducing fluctuations.
In all, there will be 3,526 COEs each month spread across five categories, said the Land Transport Authority (LTA). This is down from 3,982 COEs available each month from May to July.
The COE quota under the previous computation method for the August to October period would have been 9,394 instead of 10,581 – a 21.4 per cent cut instead of the announced 11.5 per cent reduction from the previous three-month period.
In the category for internal combustion engine cars with up to 1,600cc and below 130bhp, as well as fully electric vehicles with up to 110 kilowatt of power, there will be a monthly supply of 1,086 COEs, a reduction of 11.3 per cent from the current quota period.
For cars with larger engines or more power, there will be 939 COEs, 10.8 per cent down from the current period.
The supply of commercial vehicle COEs is reduced by 19 per cent to 166 COEs monthly for the August to October period. This category has received the most severe reduction among all the types of COEs.
There will be 1,008 COEs for motorcycles, a cut of 10.1 per cent from the 1,121 COEs available monthly in the May to July period.
In the Open category, which can be used for all types of vehicles except for motorcycles, the quota is reduced by 13.7 per cent from 379 COEs each month to 327 COEs.
The figures are based on an updated calculation method which LTA announced along with the new quota.
The main determinant of the COE supply is the deregistration rate.
The revised method of calculation for the coming three months is based on 50 per cent of the number of deregistrations in the previous six months instead of taking the deregistrations from the previous three months alone.
LTA said that the new method for computing the COE quota available for bidding reduces the quarter-to-quarter volatility of the COE supply while being more responsive in returning the COEs of deregistered vehicles to the bidding pool.
As reported earlier, motor traders have expected the quota to be reduced.
In anticipation of a further rise in premiums, motor dealers have been rushing to secure as many COEs as possible in the recent tender exercises to register customer orders as well as to secure Open category COEs, which are valid for three months.
COE premiums have been going up - in the latest tender exercise on Wednesday, the premium for the Open category COE hit a record high of $114,001.
A motor dealer said that while the reduction in COE quota may not be as severe as anticipated, premiums will still be going up.
Since February 2018, the vehicle growth rate has been set at zero per cent for all categories of COEs except for commercial vehicles, with their numbers allowed to grow at the rate of 0.25 per cent per year. This policy runs until January 2025.