Car COE premiums bounce back up again

Singapore

PASSENGER-CAR COE (Certificate of Entitlement) premiums bounced back up again after falling significantly a fortnight ago, although they still ended below the year's highs.

In the final bidding exercise of 2016, Category A - for cars below 1,600cc and 130 hp - rose S$1,751 to S$49,751, while Cat B - for cars above 1,600cc or 130 hp - jumped S$4,880 to S$51,109.

Cat E - the open category which currently tracks Cat B - inched up S$379 to S$50,389.

But Cat C - for goods vehicles - fell S$1,709 to S$49,500, while Cat D - for motorcycles - was marginally lower, down S$12 to S$6,101.

Two weeks ago, the Cat A and B premiums had fallen below the S$50,000 mark, after having stayed stubbornly above that level for most of the second half of 2016.

The big-car premium's dip then of S$6,772 even took it below the small-car premium.

Still, those were not the year's lows.

In 2016, the Cat A premium ranged from a low of S$43,000 in the second half of February, to a high of S$55,200 in the second half of June.

Cat B, on the other hand, dipped to S$38,620 in early February and soared to S$57,903 in early August.

Mirroring Cat B, the Cat E premium's intra-year extremes were S$44,001 in early February and S$58,201 in early August.

Nicholas Wong was not surprised by Wednesday's COE results. "It was expected," said the general manager of authorised Honda distributor Kah Motor. "It's like a roller-coaster. Whenever it goes down, it will go back up. And when it goes up, it will come down again."

Mr Wong added that the Cat A premium is likely to stay in the current range for some time. "The Cat A premium is stable, and should hover one or two thousand dollars above and below the S$50,000 level," he said.

As for Cat B, he said he noticed some prospective buyers were "still holding back" because they believe the premium can soften some more.

"There are still many people out there who are waiting for premiums to fall further," he explained. "At every level, you will attract a different group of customers. The more COE premiums drop, the more bookings there will be. It's all about affordability."

The sales director of a mid-sized Japanese dealership also said Wednesday's COE results were not unexpected.

Declining to be named, he said: "The sharp fall in the previous tender attracted more buyers, so I wouldn't call it a wild swing."