Glitch in bidding platform may have caused COE premiums to dip, say dealers

SINGAPORE — A 20-minute glitch reportedly prevented several dealers from submitting their bids in this week's Certificates of Entitlement (COE) bidding exercise, and could have been a reason why car premiums saw a significant dip.

The glitch took place just before bidding closed at 4pm on Wednesday (July 4), which saw COE premiums tumbling to eight-year lows.

Four dealers contacted by TODAY said they had experienced difficulties submitting their bids via Maybank's channel for the open bidding system.

Mr Raymond Tang, managing director of Yong Lee Seng Motor, was among those hit by the glitch and said there was not enough time for affected dealers to send fresh bids through another bank.

When asked, a Maybank spokesman acknowledged that there was "a short period of intermittent technical issue", but maintained that it was "resolved before the COE bidding closed".

The spokesman did not address TODAY's queries on the duration of the glitch and its magnitude.

Asked about the glitch, an LTA spokesperson said: “LTA did not observe any issue with its online COE bidding system on its end.”

Motor traders can only submit their bids through DBS, UOB or Maybank. A S$10,000 deposit is required for each COE bid for vehicles in Categories A, B, C and E, while a S$200 deposit is needed for motorcycles in Category D.

A dealer who did not want to be named said that while such glitches are not new - at least two were reported in 2005 and 2015 - a high number of failed bids will affect COE premiums.

Cartimes' managing director Mr Eddie Loo, who was not affected by the glitch, explained that it was a common practice for motor dealers to submit their bids at the last hour.

Mr Loo said: "We usually submit our bids at around 3.45pm because we need to know how much other (dealers) are bidding. Some customers also get their loans approved at the last hour, and we can only bid when their loans are approved.

"There will be panic if dealers cannot submit their bid. Because some dealers can submit 30 bids (at one go), which is S$300,000. That is a lot of money."

Dealers told TODAY that they had expected a dip in COE prices this week, but were surprised by the extent of the drop.

Category A (cars up to 1600cc and engine power not exceeding 97kW) premiums plummeted by 27 per cent to S$25,000 from S$34,110 in the previous bidding exercise, marking the lowest level since March 2010 when premiums were S$21,421.

Similarly, large cars (cars above 1600cc or 97kW) also saw premiums dipping 9 per cent from S$33,900 in the previous bidding exercise to S$31,000 – the lowest since March 2010, when the premium was S$25,190.

In other categories, goods vehicles and buses saw COE premiums decreasing by nearly 3 per cent to S$31,092, while motorcycle premiums went down by about 5 per cent to S$6,514, compared to S$6,889 in the previous bidding exercise.

For the Open category, which can be used for any types of vehicles, premiums went down by nearly 10 per cent to S$31,001.

In 2005, The Straits Times reported that about 50 bids from five traders failed to register following a glitch in the COE bidding system, leading to compensation demands by at least two motor traders.

Mr Albert Yap, director of car dealership BuyCar, said these glitches could have financial "consequences".

"Some customers may want their cars by a certain time and if a glitch happens, we may not be able to fulfil the commitment," added Mr Yap, who was not among those affected on Wednesday.

"There may be a breach of contract (between the trader and customer), so there will be consequences."