Motorcycle COE premiums hit $11,751, second tender in a row to reach all-time high; other categories down

Motorcycle COE premiums ended with a hike of 1.4 per cent, while all other COE prices dipped. PHOTO: ST FILE

SINGAPORE - Motorcycle certificate of entitlement (COE) prices hit a new record for the second tender in a row on Wednesday even as the premiums slipped for all other categories.

Motorcycle COE premiums, which hit a record high of $11,589 at the last round, ended at $11,751, a hike of 1.4 per cent. This is more than double the price of a basic motorcycle like the Yamaha Aerox 155, which costs under $4,700 before COE and insurance.

In the category for cars with up to 1,600cc and 130bhp, as well as fully electric vehicles (EVs) with up to 110 kilowatts of power, premiums went down from $84,000 to $80,501 - a decrease of 4.2 per cent.

For larger and more powerful cars and EVs, the COE price ended at $95,856, which is 11.3 per cent below the $108,051 posted in the last tender exercise. This is the first time since May this year that the price for this type of COE is below the six-digit mark.

The COE price for commercial vehicles dipped to $65,991 from $67,001, marking a decrease of 1.5 per cent.

Open category COEs, which can be used to register any type of vehicle except motorcycles, are priced at $105,001, 2.1 per cent below the previous price of $107,201.

This year, motorcycle COE prices first broke the record in March when it hit $11,400. 

Changes introduced by the Land Transport Authority to the bidding process in March seem to have helped bring down premiums for a while. But prices started climbing again in the second tender exercise in May. 

The latest COE price on Wednesday is nearly 24 per cent above the $9,490 price recorded in May. 

A motorcycle industry insider, who declined to be named, said that more companies are coming into the motorcycle leasing business in 2022.

This is seen as one of the strong contributors to the demand for motorcycle COEs as the newcomers need them to build up their offerings. 

Mr Rex Tan, president of the Singapore Motor Cycle Trade Association, said there are simply not enough COEs to meet the strong demand for motorcycles, especially from those doing deliveries. 

Category Current COE premium ($) Previous COE premium ($)
A - Car (1,600cc & below) 80,501 84,000
B - Car (above 1,600cc) 95,856 108,051
C - Goods vehicle & bus 65,991 67,001
D - Motorcycle 11,751 11,589
E - Open 105,001 107,201

While there are delivery riders who buy their own motorcycles, renting is also common. This is to avoid having to commit to a big down payment and servicing a loan. 

Vroom Leasing, for example, has customers who rent motorcycles for up to three years instead of buying the vehicle. The company also has corporate clients who lease motorcycles for their employees. 

Mr Willy Tan, spokesman for GigaRider, said the company is also seeing more demand from riders who lease motorcycles as a cheaper alternative to using cars, which have become even more expensive.

GigaRider started operations in January 2022 with 20 new motorcycles. It now has 100 motorcycles in its fleet, all of them new. A Yamaha Sniper T155, which is suitable for making deliveries, costs $30 a day to rent for a minimum of three days. This is roughly comparable with the market rate.

He said the company would likely have to raise rental rates by around 10 per cent by the first quarter of 2023 for its corporate clients, as the motorcycle COE premium continues to rise.

Other motorcycle companies are also planning to raise their rental rates for the same reason.

Car dealers had expected COE premiums in their categories to fall during this round. They said that even after COE prices went down at the tender exercise two weeks ago, customers were not coming to the showrooms, suggesting that there would not have been many orders taken.

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