COE quota up 20% for May to July, led by commercial vehicles category

SINGAPORE — A bumper crop of Certificates of Entitlement (COE) will be up for bidding in the next three months, with the supply for commercial vehicles in particular jumping almost seven-fold.

In contrast, the quota for cars will dip by 5.6 per cent, based on numbers released on Wednesday (April 12) by the Land Transport Authority (LTA).

Overall, the quota will be 20 per cent higher, compared with the previous quarter, with an average of 10,568 certificates available each month between May and July.

The number of certificates for Category A (up to 1,600cc and maximum power output not exceeding 97kW) will decrease 7.5 per cent to 3,797 each month.

The supply for Category B (above 1,600cc or maximum power output above 97kW) will dip 2.7 per cent to 2,641 each month.  

On the sharp spike in the quota for Category C (goods vehicles and buses), the LTA explained that it was because of the large number of de-registrations in the preceding quarter, which in turn came about because of  the high number of COEs renewed in 2007 as a result of a shortage in the supply of new Euro IV diesel goods vehicles.

COE prices for commercial vehicles have hovered around the S$40,000 range, but even with the increased quota, analysts and market observers said they did not expect premiums to drop.

“The supply came from de-registration, which means there is an equally large number of vehicle owners out there looking to replace their vehicles,” said Singapore University of Social Sciences senior lecturer Walter Theseira.

“Normally purchases will be spread out, but they couldn’t be spread out 10 years ago because there was no stock of vehicles meeting the emissions requirements in Singapore. So they were purchased all at once, and got de-registered all at once.”

Yong Lee Seng Motor managing director Raymond Tang noted that there were a lot of commercial vehicles nearing their 10-year validity period this year.

“Some are reaching the 20-year mark, and some have another two years before reaching 20 years. It all depends on whether (the owners) will scrap their vehicles,” he said.

For motorcycles, the supply of certificates will increase by 30 per cent, following the Budget announcement in February that a portion of the motorcycle de-registrations would no longer be channelled to the Open Category.

Premiums for motorcycles hit a historic high of S$8,081 at the close of the COE exercise last month, after higher taxes kicked in for bigger bikes, which observers noted could have forced some prospective buyers to look at lower-end models or to renew their current rides.

In the latest bidding exercise on Wednesday, COE prices for motorcycles fell by 6 per cent to S$7,589.

Mr Wilson Phoon, director of motorcycle dealer AS Phoon, felt that there was “panic buying” in the earlier COE exercises because of the tax changes.

In the next three months, observers do not expect the greater supply of COE for motorcycles to have significant impact on prices since the increase was due to a recategorisation.

COE prices remained largely unchanged for the other categories except for goods vehicles and buses, which dipped 2.4 per cent to S$45,906.

NUMBERS AT A GLANCE:

Cat A (Cars up to 1600CC & 97KW): S$52,000 (up from S$51,765)

Cat B (Cars above 1600CC OR 97KW): S$54,405 (up from S$54,000)

Cat C (Goods vehicles and buses): S$45,906 (down from S$47,036)

Cat D (Motorcycles): S$7,589 (down from S$8,081)

Cat E (Open category): S$54,556 (up from S$54,501)