Higher COE quota from Nov to Jan, but greater supply ‘to be offset by increased demand’

SINGAPORE — There will be a higher supply of Certificates of Entitlement (COEs) over the next three months, led mainly by increases in the quotas for small cars and motorcycles.

Overall, there will be an average of 10,046 COEs available each month between November and January — 9 per cent more than the average monthly supply between August and this month, the Land Transport Authority (LTA) said on Thursday (Oct 18). 

However, industry players said the higher COE supply for small cars and motorcycles will be offset by increased demand from buyers, and this could drive up the respective premiums.

Over the next three months, the average number of COEs for motorcycles each month will go up by 34.7 per cent, from 1,639 to 2,207.

There will be 3,631 COEs available monthly for cars under Category A (cars up to 1600cc and engine power not exceeding 97kW), up from 3,328.

COE quota for the open category, which can be used for any types of vehicles except motorcycles, will go up slightly from 1,055 to 1,079.

In contrast, the monthly COE supply for Category B (cars above 1600cc or engine power not exceeding 97kW) will be reduced marginally from 2,529 to 2,471.

The monthly COE quota for Category C (Goods vehicles and buses) will also be reduced from 674 to 658.

The overall supply consists of replacement COEs from vehicles deregistered between July and September, among other factors. A total of 28,290 vehicles were deregistered during this period, including 10,890 small cars, 7,399 bigger cars and 4,328 motorcycles.

Car and motorcycle dealers whom TODAY spoke to said they expect an uptick in sales.

Mr Raymond Tang, managing director of car dealer Yong Lee Seng Motor, predicts a spike in small car sales, given the upcoming Cars@Expo motorshow on Oct 27 and 28.

“This is the time that consumers can come (and buy), rather than wait till next year,” he said.

In the latest COE bidding which closed on Wednesday, premiums for small cars fell by 10 per cent to S$25,556, down from S$28,457 in the previous bidding exercise. The COE premium for small cars is the second lowest this year, just above the S$25,000 recorded on July 4.

While Mr Tang felt that the expected surge in sales would have little impact on COE premiums in the near future, CarTimes Automobile managing director Eddie Loo said the premiums will likely go up as early as next month.

This is because parallel importers have managed to bring in a new batch of Honda Fits, Shuttles and Vezels which will be eligible for the S$10,000 Vehicle Emissions Scheme rebate. This would eventually drive up COE premiums, Mr Loo said.

With the higher COE supply, Mr Wilson Phoon, the director of motorcycle dealer A S Phoon,  expects more buyers for motorcycles, which have become more affordable in recent months.

After peaking at S$8,451 on Feb 7, COE premiums for motorcycles have been on a steady decline, reaching a low of S$3,951 on Wednesday.

Correspondingly, the price of a Class 2B motorcycle has fallen from at least S$12,000 to about S$8,000 for example, Mr Phoon said.

With the cheaper premiums, he also expects more existing motorcycle riders to renew their COE when it reaches the end of its 10-year lifespan, instead of having their motorcycles scrapped. This, in turn, could cause future COE quota for motorcycles to fall, as fewer de-registered COEs are added, he noted. 

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