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COE premiums remain flat
PREMIUMS for certificates of entitlement (COEs) were flat in the first bidding exercise of June, as prospective buyers took a wait-and-see attitude amid expectations of a larger quota in a couple of months. Only one COE category registered a tiny increase; the others were all slightly lower.
Category A, for cars below 1,600cc or 130 hp, fell S$590 to S$66,000; Cat B, for cars above 1,600cc and 130 hp, slipped just S$2 to S$75,000. Cat E, the open category which currently tracks Cat B, dropped more sharply, slumping S$2,200 to S$75,801.
Meanwhile, Cat C for goods vehicles was S$1,101 lower at S$50,900. Cat D for motorcycles inched up S$8 to S$6,509.
The director of a popular dealership said sales since the previous COE tender two weeks ago had levelled off.
"Many people are postponing their purchases because they see that COE prices are trending downwards - and they expect prices to continue softening, with a new and bigger COE quota from August," he said.
Calling this group of people bargain hunters, the director said they are seeking better savings, even with the tighter Carbon Emissions-based Vehicle Scheme (CEVS) kicking in from July 1.
The new CEVS rebates and surcharges to be levied next month are said to have been factors behind a rush to register cars before the deadline in the past few months. This spike in new car demand had resulted in an increase in COE premiums higher than the CEVS savings.
"The CEVS story is now over," said the director. "Those who were concerned about CEVS have already got their cars or are getting them this month."
Going forward, he described the market as entering "a new phase of buying".
He added: "You can see that from the less-aggressive bidding during the tender (on Thursday). I believe COE prices are peaking."
The sales manager of a small European dealership said that talk of an impending general election could be another reason for slower car sales.
"I don't know why, but when there are rumours about an election, everything seems to slow down. It is as if people think the election goodies will include more COEs."