COE prices for cars rise as others continue slide

SINGAPORE — After tumbling for several rounds, Certificate of Entitlement (COE) prices for cars rebounded today (Aug 5), with big car premiums surging ahead of Open Category premiums.

Premiums for Category B cars (above 1,600cc or 97kW) climbed upwards from S$58,109 to S$60,789 — an increase of 4.61 per cent. Prior to this, COE premiums had been falling since April, and reached a two-year low in the previous bid.

In contrast, Open Category premiums — which are for all categories but are mainly snapped up by big-car drivers — dropped 3.69 per cent from S$60,101 to S$57,885, remaining at a four-year low.

Category A cars (up to 1,600cc and 97kW) saw premiums increase by a marginal 0.57 per cent from S$55,889 to S$56,209. COE prices for small cars had been sliding since May.

Motor traders had attributed earlier falls to motorists adopting a “wait-and-see” attitude in hope of further declines. But with the clock ticking away and premiums hitting a sweet spot, some motorists have decided to make a move, resulting in premiums edging up in this exercise, said traders.

“A lot of people have been waiting, and their car is almost going to be scrapped. They have no choice now. Either they buy a new car or a second-hand car,” said Mr Neo Tiam Ting, general manager of Think One Automobile & Trading.

“As for those who intend to buy a new car, they think the price is good now, as compared to before,” he said.

Today’s bidding exercise was the first for the August to October period, which sees a total of 21,845 COEs available — 9.7 per cent more than in the preceding three months.

Even as the COE supply increases, orders have also continued to trickle in, said Mr Raymond Tang, first vice-president of the Singapore Vehicle Traders Association. “After the last two (exercises), car showrooms have seen a lot of customers come flooding in,” he said.

There were 2,446 bids for Category A COEs, compared with 1,966 bids received in the previous exercise. For Category B, there were 1,634 bids, up from 1,218 bids previously.

Meanwhile, commercial-vehicle COE premiums fell 1.4 per cent from S$50,002 to S$49,302. Motorcycle premiums followed suit, falling 1.76 per cent from S$6,312 to S$6,201.

CarTimes Automobile’s managing director Eddie Loo also noted that it was unusual for COE prices in the Open Category to be lower than that of Category B.

This was last seen in January, but the difference between both categories, which was around S$100, was less significant. Currently, the premiums differ by about S$2,900.

Mr Loo believes this was sparked by motorists hoping to capitalise on the fact that Category B premiums had fallen below S$60,000 in the previous exercise and swooping in to bid.

When asked if the start of the seventh lunar month, which falls on Aug 14, would affect COE prices in subsequent bids, Mr Neo said it might have some impact.

“Last time, people will look for a good date to register cars. Some don’t like to bid during this period,” he said, citing superstition.

However, Mr Tang felt mindsets have changed, and the younger generation have no qualms over registering their cars during this month.

Traders also had mixed views over the future movement of COE prices, with some believing the increased supply would cause premiums to dip, while others pointed out that a massive backlog of orders would lead to premiums inching upwards.