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Year-end spike in big car COE premium
THE big car premium spiked but the small car premium softened in Wednesday's bidding exercise for certificates of entitlement (COES) - the penultimate tender for the year.
Category A, for cars below 1,600cc or 130 hp, slipped S$800 to S$67,089, but Cat B, for cars above 1,600cc and 130 hp, jumped S$1,499 to S$74,389.
Cat E, the open category which currently tracks Cat B, rose S$3,004 to S$76,904, while Cat D for motorcycles was S$21 higher at S$4,210.
Cat C, for goods vehicles, was S$5,000 lower at S$60,001. This category appeared to be taking a breather after shooting up in four straight sessions; it had been below S$50,000 in September.
The increases had been a response to the severe reduction in COE supply because of the success of the Early Turnover Scheme (ETS). Under ETS, buyers pay a pro-rated COE premium instead of bidding for a COE.
But it was the passenger car market that caused a stir among some distributors. Few had foreseen Cat E's S$3,004 jump, although many had expected the big car premium to appreciate because of the year-end rush to meet sales numbers and performance targets.
The managing director of a luxury dealership said: "This is the second-last bidding exercise of the year, so some distributors are hoping to do as much window-dressing as possible."
He added: "But I was surprised that Cat E went up by so much. There could be a speculative element."
With Cat E COEs being transferable, he suggested that some dealers may be stocking up on them; in the event of last-minute car purchases, the Cat E COE can be used for immediate registration.
"That is why the bidding for Cat E may have been more aggressive," he said.
As for Cat A, he believed the tolerance level of this category has been reached.
Referring to Cat A buyers as those who are more price-conscious and looking for bread-and-butter models, he said: "They are not willing to pay as much for a COE as a Cat B buyer. Anyway, they expect more COEs in the pipeline next year, so why not wait a while more?"