Certificate of Entitlement (COE) premiums closed mostly higher in the latest bidding exercise on 9 April, suggesting car prices in Singapore will likely remain elevated in the coming weeks.
COE Premium Increases Across Most Categories
For Category A COEs, which are used to register smaller cars with engine capacity of 1,600cc and below with horsepower not exceeding 130bhp including electric vehicles (EVs), premiums rose to $97,724. This marks a 3.4 per cent increase from the previous tender’s $94,502 on 19 March.
Category B COEs, meant for larger and more powerful cars and EVs (110kW and above), saw premiums climb to $117,899, up 0.9 per cent from $116,890 in the last exercise.
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Open category COEs (Category E), which can be used for any vehicle type except motorcycles but are typically used for bigger cars, increased marginally to $117,002, just $11 higher than the previous $116,991.
Motorcycle (Category D) premiums rose 4 per cent to $9,889 from $9,511.
Commercial vehicle (Category C) premiums were the only category that bucked the upward trend, dropping 1.9 per cent to $68,782 from $70,089.
A total of 4,734 bids were received in this tender exercise, with only 2,882 COEs available across all categories.
Market Dynamics and Consumer Behavior Impacting COE Demand
Motor dealers attributed the rise in premiums partly to the three-week gap since the previous tender exercise—a week longer than usual—which gave them more time to collect orders and increased demand for COEs.
The two car COE categories received 3,362 bids collectively, representing a 6.8 per cent increase from the 3,147 bids in the previous exercise.
There were 1,511 unsuccessful bids in these categories, compared to 1,263 in the last round.
According to The Straits Times, Ms Corinne Chua, managing director of Volvo Cars at Wearnes Automotive, noted that customers who had delayed purchases while waiting for the Land Transport Authority (LTA) to release more COEs have started returning to showrooms.
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This follows LTA’s January announcement that the overall COE supply for February to April would be 8 per cent higher than the previous quarter, with plans to introduce up to 20,000 additional COEs across vehicle categories over the next few years.
Mr Raymond Ng, managing director of Eurokars EV, predicted that unsuccessful bidders will likely try again in the next tender exercise closing on 23 April, aiming to secure COEs before The Car Expo event on 3 May and 4 May.
This large-scale event, organized by SPH Media, is anticipated to boost car sales and increase COE demand in subsequent tender exercises.
However, Mr Ng Choon Wee, commercial director at Komoco Motors, which distributes Hyundai, reported a drop in showroom visitors following US President Donald Trump’s announcement of sweeping duties that sparked fears of a trade war and global recession.
“The near future could be tough for motor dealers as consumers might watch their spending,” he added.
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The high COE prices have also affected consumer behavior in other ways. Some vehicle rental firms reported about 30 per cent more business this Hari Raya compared to last year, with high costs driving families away from car ownership toward renting on an ad hoc basis.
In March, the LTA introduced measures to stabilize the supply of private-hire cars, including an immediate requirement for the disclosure of a vehicle’s history for all newly registered, converted or transferred private-hire cars.
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