Motorcycle premiums to rise as more switch from cars, traders say

SINGAPORE — Despite the quota for motorcycle Certificates of Entitlement (COEs) edging up over the next three months, motorcycle traders expect premiums — already at record levels — to remain high, or rise further.

There will be 713 COEs allocated monthly from next month, a 9 per cent increase from the previous three months, but the demand is likely to outstrip this, they said.

COE quotas are determined by the number of deregistered vehicles. In 2005, the annual COE quota for motorcycles was 12,780. Last year, it was 8,021. Meanwhile, premiums for motorcycles more than doubled from 2011 — when they ranged from S$1,500 to S$2,600 — to between S$4,400 to S$6,600 last year. In the latest COE bidding exercise last week, bidding for motorcycle COEs closed at a record S$6,889.

Singapore Motor Cycle Trade Association president Tony Yeo said he expects COE prices for motorcycles to increase as the quota is “insufficient” compared to demand. He pointed out that many rely on motorcycles for their trade, such as ice-cream sellers, courier riders, and food and beverages delivery riders.

“These are the people who need the vehicle. It’s actually part of the tools of their work,” he added.

Mr Wilson Phoon, director of motorcycle dealer AS Phoon, added he has observed an increase in the demand of motorcycles since the middle of last year. This could be due to car owners who decided to switch to motorcycles as it is cheaper, while there has also been an increase in F&B delivery businesses.

The increase in quota from next month might see premiums “soften a little”, but not in a significant way, he said.