SINGAPORE - The bid deposit for motorcycle certificates of entitlement (COE) will be raised to $800, from $200 previously, and the validity of a secured COE will be halved to three months.
The Land Transport Authority (LTA) on Monday (March 14) announced these changes to the bidding process for motorbike COEs after years of lobbying from various quarters and record high premiums.
This will take effect from the second tender exercise in March starting next week.
The authority said the move was "to encourage prudent bidding behaviour".
Motorcycle COE prices have been soaring to new highs in recent years, reaching another all-time high of $11,400 at the latest tender last Wednesday. It was consistently below $3,000 before 2014, and below $1,000 before 2006.
Industry players have said repeatedly that speculative trading and hoarding by big dealerships were largely responsible for the sharp and relentless climb in prices. As bid deposits are forfeited when a dealer fails to register a motorbike with a secured COE, they have suggested a higher bid deposit to deter this behaviour.
For car COEs, the bid deposit is $10,000.
The shorter validity period of three months is also seen as dampening speculation, as bidders have a shorter time to source for genuine buyers.
LTA said it will also mean unused COEs will be returned to the bidding pool "more quickly".
The Singapore Motor Cycle Trade Association had suggested raising the bid deposit to $2,000, and reducing the validity period to one month.
Association president Rex Tan said it welcomes the changes, but added that they may need to be monitored and reviewed.
“Based on the current prices and situation, maybe even higher deposits or shorter validity is required,” said Mr Tan.
“If implemented a year ago, I think it would have made a significant difference, and prices would not have reached this ridiculous level,” he added.
Various MPs have also lobbied for changes over the years.
Last October, Aljunied GRC MP Faisal Manap proposed that motorbike COEs should be split into three different sub-categories according to their engine capacities, and that a balloting system similar to that for Build-To-Order flats be applied for smaller motorcycles.
In response to the Workers’ Party MP, the Ministry of Transport (MOT) said tweaking the COE system could have knock-on effects and potentially unintended consequences on buyers.
During the debate on MOT’s budget in Parliament last week, several MPs, including Bukit Panjang MP Liang Eng Hwa, highlighted the impact of high premiums on those who depend on motorcycles to make a living and asked if the ministry could step in.
Motorbike riders are keeping their fingers crossed that the new measures will cool COE premiums.
Social worker Rahim Vadia, 27, said: “Hopefully this will stop all the mass biddings by dealers... and prices can come down.”
Mr Rahim said he is looking to upgrade his 200cc KTM Duke to something bigger, but has been put off by the high premiums.
“But the interesting thing is that after having owned this motorbike for 1½ years, I can sell it at the same price which I paid for it – solely because of the rise in COE premium,” he added.
Analyst Robin Low, 47, said his current motorcycle’s COE will expire by the end of the year, and he has been shopping for a new ride since the middle of last year.
“I guess I’d be comfortable if the COE price came down to around $5,000, because the motorbike I’m looking at is also around $5,000,” he said. “Right now, the COE price is much higher than the motorbike.”
Mr Low added: “I gave up my car five years ago because of high COE prices. Now I’m faced with high COE prices again.”