SINGAPORE - The supply of car certificates of entitlement (COE) will dip by 6.6 per cent in the next three-month quota period starting in August.
In its regular quota announcement on Wednesday (July 14), the Land Transport Authority said the monthly average will be 1,605 COEs for cars up to 1,600cc and 130bhp, and 1,541 COEs for cars above 1,600cc or 130bhp.
The monthly supply of Open COEs, which can be used for any vehicle type except motorcycles but which end up mostly for bigger cars, will be 394.
The total of the three works out to be 3,540 per month, or 6.6 per cent less than the 3,792 available under the current quota.
Commercial vehicle buyers and sellers will have a bigger contraction of 26.8 per cent, with the monthly average falling from 314 to 230 COEs.
Motorcycle COE supply will likewise drop by 27.6 per cent to 889 pieces, from 1,228 currently.
Motor dealers said the shrinkage is not unexpected, but reckon the contraction in car COEs was mitigated by the surge in revalidation of COEs made from 2016.
This is because those who revalidated after 2016 may also have decided to scrap their cars early.
The COE supply is determined mainly by the number of vehicles deregistered in the preceding three months, and cars with five-year COE revalidations cannot be further extended and must be deregistered.
Some observers, however, wonder how the latest shrinkage could have happened, given that car deregistrations in the April-June period were noticeably higher than in the preceding three months.
The LTA pointed out that this was because COEs carried over from the suspension of trading in April-June 2020 - during the so-called circuit breaker period - would have already been redistributed by this month. Hence, the new quota period starting next month no longer has this component.
Motor dealers said the shrinkage in car COEs is unlikely to affect premiums significantly.
But the story is different for commercial vehicles and motorcycles. With their COE quotas slashed by more than a quarter, premiums are set to head northwards.
Mr Neo Nam Heng, chairman of diversified motor group Prime, said: "The impact on commercial vehicles will be great, especially for end-users in this difficult period."
He said "it would be good" if the authorities can consider raising the emission rebate for commercial vehicles. Currently, light commercial vehicles that are environmentally cleaner are accorded tax rebates of either $30,000 or $10,000.