Motorcycle COEs hit new high as car premiums remain flat

SINGAPORE – Certificate of Entitlement (COE) prices for cars remained flat across the board in the latest bidding exercise that ended today (April 22), with car dealers attributing it to buyers holding back in anticipation of  the large supply of COEs that would be made available next quarter.

However, COE premiums for motorcycles hit a record high at S$6,801. Those for the Open Category, which can be used for all vehicle types but tend to be snapped up by big cars, rose to a 12-month high at S$79,500. 

For small cars in Category A (up to 1600cc & 97kW), premiums dipped 0.22 per cent to S$67,601. Premiums for big cars in Category B (above 1600cc or 97kW) closed at S$78,001, a slight increase of 1.81 per cent. 

COE prices for commercial vehicles in Category C plunged 17.19 per cent – the first drop since February -- to close at S$53,001.

Car dealers noted that COE premiums for cars have remained largely consistent with fluctuations of less than 2 per cent from the previous exercise. Drivers are adopting a “wait-and-see” attitude in anticipation of the surge in COE quota from May to July, car dealers said.

Last week, the Land Transport Authority (LTA) announced that 19,912 COEs will be released during the next quarter – 41 per cent more than the February to April period. 

“People are holding back already because of the new announcement of the bumper crop of COEs coming in for the next quarter,” said Mr Jeremy Soh, director of used-car trader Ricardo Cars, today. “People who are bidding this round are the ones who are still clearing the backlog,” he added.

Mr Neo Tiam Ting, general manager of Think One Automobile and Trading, suggested that these bidders could also be rushing to buy vehicles before stricter regulations for rebates and surcharges under the Carbon Emissions-Based Vehicle Scheme (CEVS) kick in on July 1.

The scheme is aimed at encouraging the purchase of low-carbon-emission vehicles.

Meanwhile, dealers attributed the dramatic fall in commercial vehicle premiums to the upcoming doubling of quota in this category. The new monthly supply of Category C COEs will be 736 – almost twice the monthly supply now. 

“The next bid, I suppose it’ll come down further,” said Mr Neo. 

Dealers were surprised that motorcycle COE premiums surged by 7.75 per cent, a new high.

Mr Wilson Phoon, director of A. S. Phoon, said: “I’m shocked. It’s beyond expectations, especially with the coming 15 per cent increase in the monthly supply (of COE quotas for motorcycles). It’s probably because demand is a lot higher than the supply right now.”

On the whole, dealers expect premiums to dip across all categories in the upcoming exercises.

Mr Eddie Loo, CarTimes’ managing director, said: “Prices are expected to drop due to the (upcoming) increase in quota, and because the economy is not fantastic.”