COE premiums breach S$150,000 for the first time
Derryn Wong
CERTIFICATE of entitlement (COE) prices broke new ground with the price for Open category COEs exceeding S$150,000 for the first time and the premium for Category B reaching another record high.
Category E, the Open category, which can be used to register any type of motor vehicle except motorcycles, increased by 5.1 per cent or S$7,360 to S$152,000.
This is the first time the price of any COE has reached the S$150,000 mark, and exceeds the previous record of S$144,640 which was set in September’s second round of bidding.
Prices for Category B rose 3.6 per cent or S$5,113 to S$146,002. This is also a new high, exceeding the previous record of S$140,889 set in September’s second round of bidding.
Category B is the category for cars with engines of more than 1,600 cc in capacity or with more than 97 kilowatts (kW), or for electric vehicles (EVs) with more than 110 kW.
Unlike other COE types, Category E COEs have a three-month validity period and are typically used as a buffer or extension of Category B, which is usually the highest priced non-Open COE type.
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The price for Category A fell 1 per cent or S$1,000 to S$104,000. The Category A COE applies to mainstream cars with engines up to 1,600 cc in capacity and with less than 97 kW, or for EVs with less than 110 kW.
Prices for Category C, applicable to commercial vehicles and buses, increased 2.5 per cent or S$2,099 to S$85,900.
Prices for Category D, used for motorcycles, increased 1.5 per cent or S$156 to S$10,856. COE premiums for passenger vehicles, especially Category B and E, have set new records throughout August and September.
For Category A, the Land Transport Authority (LTA) announced a one-time boost of 300 COEs for October in anticipation of greater demand, raising the quota per round to around 780.
This “absolutely” helped Category A avoid reaching another new record, said Nicholas Wong, the general manager for Honda distributor Kah Motor.
“It shows what sort of price pressure is facing COE premiums now. The quota was increased by 21 per cent, but the price only dropped around 1 per cent. Three hundred additional COEs for the month is just not enough to lower prices at this level,” he said.
Wong also pointed out that the bids received for Category A increased significantly – up 20 per cent to 1,039 bids compared to 864 bids the previous round – reflecting the pent-up demand for cars.
Other industry players said that reductions to existing rebates and regulation changes that come into effect on Jan 1, 2024, were also fuelling demand as buyers look to avoid price increases.
In 2024, passenger vehicles sold in Singapore will also need to pass type approval under the stricter Worldwide Harmonised Light Vehicles Test Procedure (WLTP).
Multiple industry players told The Business Times that some car dealerships are focusing on offloading existing stock that was approved under current procedures and cannot be sold here come 2024.
The maximum rebate for EVs under the EV Early Adoption Initiative (EEAI) will drop to S$15,000 from S$20,000, while the updated Vehicular Emissions Scheme (VES) will see the rebate for vehicles classified under the A2 band reduced to S$5,000 from S$15,000.
“We can’t be certain where COE prices go, but come January, there is no doubt that the prices of some cars will go up because of those two reasons,” said the sales manager of a Japanese car dealership.
“WLTP is also more strict, which means fewer cars will qualify for VES rebates. This is across the board, so it’s also private-hire vehicle fleets that are anticipating the price increases – and they are continuing to expand their fleets,” said the manager.
Post-Covid demand for ride-hailing and ride-sharing services have seen the number of private-hire vehicles increase to 78,106 as at August 2023, up from 72,632 at the end of 2022.
According to the LTA, point-to-point (P2P) trips (taxis and ride-hailing) increased 18 per cent to 613,000 trips in July 2023 from 517,000 trips in 2020, with the authority slated to conduct a regulatory review of the P2P transport sector framework in 2024.
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