Certificates of entitlement (COEs) premiums for cars continued to creep upwards in the latest tender yesterday, fuelled by fresh demand from private-hire players.
The premium for cars up to 1,600cc and 130bhp inched up 0.03 per cent to hit a four-month high of $26,309. The COE price for cars above 1,600cc or 130bhp posted the biggest gain of 4.4 per cent to reach a 10-month high of $36,961.
The price of open COEs, which can be used for any vehicle type except motorcycles but end up mostly for bigger cars, rose 2.6 per cent to $37,620 - also a 10-month high.
The commercial vehicle COE premium crept up 0.4 per cent to hit a four-month high of $27,010, and has stayed above the premium for smaller cars for a few months now.
Motorcycle premium bucked the trend yesterday to end 2.4 per cent lower at $3,602.
Motor traders said the upward trend in car COE prices - in particular, premiums for bigger cars - is fuelled by parallel imports and private-hire players.
Mr Neo Nam Heng, chairman of diversified motor group Prime, said: "Parallel importers are starting to come back, and most of the models they sell produce more than 130bhp. Even small cars like the Honda Fit Hybrid and Honda Shuttle Hybrid make more than 130bhp."
He added that almost all new private-hire cars are hybrids and fall under COE Category B (cars above 1,600cc or 130bhp).
"Private-hire companies are renewing their fleets," Mr Neo said.
"And if the car is not a hybrid, no one wants to drive it. Hybrids give double the mileage of normal petrol cars."
The Straits Times understands that rental companies in partnerships with ride-hailing firms such as Grab and Gojek will be adding at least 2,000 new cars to their fleets in the next few months.