SINGAPORE - Certificate of entitlement (COE) prices rose across the board on March 6, except in the category for bigger, more powerful cars, which recorded a drop of $990.
The COE category for smaller, less powerful cars registered the biggest increase of 8.1 per cent to end at $83,000, from the $76,801 posted two weeks ago.
For bigger, more powerful cars, the COE premium was $96,010, down 1 per cent from $97,000.
The premium for Open category COEs, which can be used for any vehicle type other than motorcycles but end up almost exclusively for bigger, more powerful cars, closed at $95,010, up 1.1 per cent from $94,006.
As such COEs are transferrable and can be held for three months before being used to register vehicles, the price is viewed as a reflection of the industry’s forecast of market demand.
Motor dealers said the slight increase of $1,004 suggests that the trade is not expecting COE prices to surge significantly in the immediate term.
The COE premium for motorcycles ended 5.5 per cent higher at $9,400, up from $8,911. For commercial vehicles, the COE rose 3.6 per cent to $75,599, from $73,001.
At the previous exercise on Feb 21, COE prices fell across the board, except in the commercial vehicle category.
Premium brands such as BMW and Mercedes-Benz, which have models competing in the COE category for smaller cars, have held roadshows at shopping malls in recent weeks.
Mercedes-Benz, for example, advertised savings of “up to $30,000” for an event that ended on March 3. Such promotions would have fuelled demand for COEs, nudging up premiums.
Mr Jason Lim, managing director of Eurokars Auto BMW, said orders for smaller and less powerful cars “remain strong”, citing promotions dangled by various dealerships over the March 2 and 3 weekend.
He said that overall, the trade will need at least a tender exercise or two to deliver the orders taken during this period at the showrooms as well as the promotional events.
This means that the premium for the small car category may stay at the current levels until April or so.
Representatives from Hyundai dealer Komoco Motors and Kah Motor, which distributes Honda cars, say the jump in COE premiums for smaller cars may also have been driven by car rental companies that are refreshing or expanding their fleet.
Overall, the number of bids received during this exercise – at 1,866 for this category of COEs – was similar to what was observed in the previous four rounds in 2024.
Ms Sabrina Sng, a managing director at multi-franchise group Wearnes Automotive, hopes that the latest $990 dip in the COE premium for larger and more powerful cars is a sign that they will stabilise for the rest of the three-month quota period that ends in April.
The gap in premiums between the two car COE categories stands at $13,010, which is the closest it has been since August 2021, when the difference was $10,812.
In 2022 and 2023, the gulf between the premiums of the two COE categories tended to be closer to $30,000.
Ms Sng, who is in charge of insurance, electric vehicle (EV) brand Lotus and sports car maker Polestar, said the arrival of more EVs that qualify for small car COEs has driven up premiums in the category.
On top of adding to the demand for such COEs, EVs tend to attract more tax incentives than mass-market internal combustion engine cars. This lowers the cost of the EVs, giving the dealer more margin to bid for COEs.
The EV Early Adoption Incentive, for example, grants such vehicles up to $15,000 in rebates on vehicle taxes.
Following the latest rise in COE premium for smaller cars, dealers are expecting to hike prices for vehicles in this category immediately by between $3,000 and $6,000.
