All COE prices up despite higher quotas

SINGAPORE — Certificate of Entitlement (COE) premiums for cars rose across the board at the end of yesterday’s bidding exercise, even though more COEs have been made available starting this month.

The premium for small cars (1,600cc and below) continued to climb, recording the eighth consecutive increase, to close 2.12 per cent higher at S$75,556. Three weeks ago, it was S$73,989.

COEs for big cars (1,601cc and above) increased by 1.59 per cent to S$77,600, up from S$76,389 previously. In the Open category, where COEs can be used for any vehicle type but end up being mainly for large cars, premiums increased by 1.55 per cent to S$77,989 from S$76,802.

The premium for commercial vehicles once again reached another record high, increasing 4.94 per cent to S$68,251, while that for two-wheelers increased by 4.67 per cent to S$1,792.

Motor traders attributed the continued surge in COE premiums to the three-week break from the previous bidding exercise, as this meant pent-up demand and a longer order-collection period.

The Managing Director of CarTimes, Mr Eddie Loo, said the increase in premiums, which came after more COE quotas were released to buyers, reinforced the belief that the supply has “marginal impact” on demand, which “is still very strong”.

Mr Loo also pointed out that the number of bids received for both Category A and B rose “by about 100” from that of the previous bidding exercise, signalling that demand has not waned.

The small car category received 754 bids in this latest bidding exercise, as compared to the 621 received in July’s second bidding exercise. For the large car category, 682 bids were received this round, 108 more compared to the 574 received previously.

“So, for example, Cat B COE (supply) increased by 77, but the bids received increased by 108. This also shows that the bids received increased more than the increase in supply,” Mr Loo said.

Mr Ron Lim, General Manager of Nissan agent Tan Chong Motor, attributed the increase to new luxury makes — for both small and big cars — being launched in the market, such as the BMW 5 Series for bigger cars and the smaller Mercedes CLA range.

Mr Raymond Tang, Honorary Secretary of the Singapore Vehicle Traders Association (SVTA), also felt potential car buyers have started to eschew used cars after the 60-day reprieve on car loans ended in June, fuelling the demand for COEs.

He said: “Consumers who are able to afford (it) now prefer to buy new cars instead of used cars, because they feel that, since the new and the used are subjected to the same type of curbs, they might as well buy their cars new.”

Mr Tang also confirmed that the SVTA will be meeting the Monetary Authority of Singapore on Tuesday to put forth the used-car industry’s proposal to raise the car loan limit to 80 per cent of the purchase price, with the repayment period stretched to eight years. The association will also be presenting statistics showing that the 60-day loan curbs reprieve had a “cooling effect” on COE premiums.

A spokesperson from the central bank said: “The MAS has received an appeal from the SVTA and will be meeting them in due course to better understand the state of the used-car industry.”