Cat A COE price rises 4.6%; Cat B premium dips for fourth time in a row

SINGAPORE – The certificate of entitlement (COE) premium for smaller cars rose 4.6 per cent at the latest tender exercise on Dec 4 after a $10,000 fall two weeks ago, while the price of a certificate for bigger cars continued to drop.

Category D for motorcycles recorded the largest fall of 9.1 per cent to $7,878,

from $8,669 on Nov 20

.

At $94,000, the price of a Category A COE, used to register smaller, less powerful cars and electric vehicles (EVs), was 4.6 per cent higher than the $89,889 recorded in the previous exercise.

This marks the first time the Category A COE premium has increased in 1½ months, after it fell for three consecutive tender exercises.

For Category B COEs, meant for larger, more powerful cars and EVs, the premium dipped for the fourth consecutive tender exercise, down 2 per cent to $103,010, from $105,081.

The premium for an Open category (Category E) COE ended at $104,001, 3.3 per cent lower than the $107,501 recorded two weeks ago. These certificates can be used to register any vehicle type other than motorcycles, but are almost always used for bigger and more powerful cars.

The price of a Category C certificate for commercial vehicles closed at $70,289, 1.9 per cent higher than the $69,000 from two weeks ago.

A COE is needed to register a vehicle for use in Singapore.

Some dealers told The Straits Times that the rebound in the Category A COE price was not unexpected, given the significant drop of $10,000 in the previous tender.

Mr Ng Choon Wee, commercial director of Hyundai distributor Komoco Motors, said he observed an uptick in sales after the last exercise. Many buyers, who were on the fence about their car purchases, started returning to the showrooms, he added.

This resulted in increased demand for Category A COEs, pushing the premium up, said Mr Ng.

However, he foresees that buying sentiment will remain weak in the next two weeks because of the holiday season, when many people will be abroad, and uncertainty over how an upcoming injection of 20,000 COEs may affect premiums.

In October, the Land Transport Authority said it would inject

up to 20,000 COEs over the next few years,

as travel patterns have evolved.

Some buyers may also find the rebound in the Category A COE price “less attractive” and “harder to digest”, added Mr Ng.

Mr Soh Ming, managing director of motor dealer Volt Auto, noted that buyers’ interest in new car models also fuelled demand for Category A COEs in the latest tender.

Ms Corinne Chua, managing director overseeing Volvo at motor group Wearnes Automotive, attributed the fall in the Category B COE price to showrooms remaining “quite quiet”, with prospective buyers of larger cars still waiting to see how the extra COEs will be allocated.

She added that customers waiting for COE prices on the whole to drop may be disappointed.

This is because many prospective car buyers are also holding off their purchases and planning to buy their cars in February, which could trigger a surge in premiums if bids come rushing in. The extra COEs will be injected across vehicle categories, starting in February.