COEs dip slightly, ‘unlikely to go lower before July’

SINGAPORE — Certificate of Entitlement premiums for cars have dipped in the second bidding exercise involving a bumper crop of COEs, which have been made available for the May to July quarter.

But the drop, while expected, is not significant and unlikely to go any further before July, say motor traders. This is due to car traders rushing to clear their stocks before the revised Carbon Emissions-Based Vehicle Scheme (CEVS) kicks in on July 1, and high demand for replacement cars.

Traders also do not expect prices to reflect the increase in quota any time this year. 

At the end of today’s bidding exercise, Category A premiums (cars up to 1,600cc and 97kW) fell 2.91 per cent to S$66,590 from S$68,589 previously. Category B premiums (above 1,600cc and 97kW) fell 3.35 per cent to S$75,002, from S$77,600.

The drop in premiums for motorcycles and the Open Category was minimal.

Motorcycle premiums fell 0.17 per cent to S$6,501 from S$6,512. COE prices for the Open Category, which can be used for any vehicle type but end up being used mainly for cars, fell 0.004 per cent to S$78,001 from S$78,004.

Bucking the trend were premiums for commercial vehicles, which rose 3.8 per cent to S$52,001, from S$50,098.

Fewer bids were received for most categories, compared to the previous exercise which saw a surge in the number of bids. For example, there were 2,351 bids in Category A, compared with 2,891 previously.

In all, 5,095 bids were received for the 3,369 COEs on offer, compared to 5,974 bids received at the previous exercise. Of these, 3,323 were successful.

RTMT Motor director Ricky Tay said the number of bids is likely to go up as the next two bidding exercises are “final chances for people to secure COEs and register their car before end-June in order to enjoy the old CEVS”. 

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

Mr Tay said dealers probably did not want to “go all out” during the latest  exercise as that would push up prices and alert the market on the size of the backlog of orders. 

This means the pressure will still be there next month, and premiums will hover around the current figures, he said, adding that any easing in prices could only be seen after July.

CarTimes’ managing director Eddie Loo said the dip was just a natural reaction after COE prices reached the peak point at which consumers can accept for a Category A car. Anything more than S$70,000 is something consumers tend to rebuff, he added. 

Singapore Vehicle Traders Association honorary secretary Raymond Tang said he does not expect a big drop in premiums until year-end because the replacement market — people buying a car after scrapping their old one  — is still strong and there are still plenty of orders.

The decline in bids this time round “is quite dangerous”, because it means dealers did not enter those bids. Given that they still have to clear their orders, the next two bidding exercises may see a spike, Mr Tang said.