SINGAPORE – Certificate of entitlement (COE) prices for commercial vehicles ended at a historic high at the close of the tender on Wednesday, while the premium for smaller cars finished close to an all-time high.
COE premiums for cars up to 1,600cc and 130bhp and electric cars up to 147bhp closed 3.8 per cent higher at $90,589. This is a whisker away from the all-time high of $92,100 recorded in January 2013, which had been followed by cooling measures from the authorities.
COE prices for commercial vehicles chalked the biggest increase of the day of 7.2 per cent to hit a new record of $81,802.
The other categories ended lower. COE premiums for cars above 1,600cc or 130bhp or electric cars above 147bhp closed 1.3 per cent lower at $113,881. The Open category, which can be used for any vehicle type but ends up almost exclusively for bigger and more powerful cars, closed 2.2 per cent lower at $114,009.
The motorcycle COE premium ended 4.5 per cent lower at $12,589.
The spike in commercial vehicle COE prices raised eyebrows among motor traders. Trade sources said the rush to register electric and petrol light commercial vehicles ahead of a reduction in tax incentives for such models was largely responsible for pushing up prices.
Speculators are also said to be taking advantage of the smaller COE quota to push up the resale value of Early Turnover Scheme (ETS) papers. ETS is an incentive scheme where fleet owners who switch to newer, cleaner models get a COE concession.
“By driving up the COE, these speculators will be able to charge more for the ETS papers they have on hand,” a senior manager of a listed motor firm said. “The number of ETS papers are a lot more than COEs available. So they will stand to gain more even if they have to hold on to the high COE.”
Industry players are also pointing to the seasonal rush to meet year-end sales targets. Competition between the two BMW agents is also widely seen to be driving up prices in Category A (cars up to 1,600cc), as the most popular BMW models are in this category.
Ms Jasmmine Wong, chief executive of Inchcape Greater China and Singapore, said: “Many premium brands traded hard in Category A. Bidding by private-hire operators is another reason. But the key culprit is the smaller quota.”
Despite the aggressive bidding from the private-hire segment, hundreds of unhired cars – some brand new – are parked in commercial buildings across the island. This oversupply phenomenon – where vehicle suppliers risk huge losses each day a vehicle is unhired – dates back to 2014, when Uber started expanding its fleet regardless of demand. The American ride-hailing firm has since exited Singapore but thousands of the cars it registered are still here.