COE premiums for passenger cars hit 2024 high; mainstream car premium crosses S$100,000
Cost of categories A, B and E reach new highs as premiums rise across the board; car show, bidding break drive demand
CERTIFICATE of Entitlement (COE) results for October’s first round of bidding saw the mainstream and large passenger car categories set new highs for 2024 to date, as premiums for all vehicle categories rose.
The premium for Category A rose 5.4 per cent or S$5,275 to S$103,799.
This marks the first time the category has breached the S$100,000 mark in 2024, with the previous high of S$98,524 set in September 2024’s second round of bidding.
It was last at a similar level a year ago: S$106,000 in October 2023’s second round of bidding.
The Category A COE applies to mainstream cars that have engines of up to 1,600 cubic centimetres (cc) in capacity or with up to 97 kilowatts (kW) of power, or for electric vehicles (EVs) with up to 110 kW of power.
The premium for Category B rose 5.5 per cent or S$6,001 to S$116,002.
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This is also the category’s highest level in 2024 so far, eclipsing the previous high of S$112,000 set in January’s second round of bidding.
Category B is the category for larger or more expensive cars with engines of more than 1,600 cc in capacity or that have more than 97 kW, or for EVs with more than 110 kW.
Category E, the Open category which can be used to register any type of motor vehicle except for motorcycles, increased by 2.6 per cent or S$2,896 to S$116,000.
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It also set a new 2024 high, exceeding the previous high of S$113,104 set in September’s second round of bidding.
Category E is typically used to register vehicles from Category B, which is consistently the most expensive category, so its premiums shadow Category B’s.
Prices for Category C, applicable to commercial vehicles and buses, increased 1.4 per cent or S$1,009 to S$75,009.
Prices for Category D, used for motorcycles, rose 1 per cent, or S$101, to S$10,001.
Quality buyers
Ng Choon Wee, commercial director for Hyundai distributor Komoco Motors, said that the spike in demand and rise in premiums “were expected” due a three-week break in bidding plus a major car show, The Car Expo, which took place from Oct 5 to 6.
COE bidding occurs on the first and third Mondays of each month, which means that the gap between some bidding rounds is three weeks, instead of two, and premiums typically increase afterwards as dealers have more orders to clear.
Sabrina Sng, managing director for Lotus, Polestar and insurance at dealership group Wearnes Automotive, noted that orders were generally strong, while Ng added that most brands had met their sales volume expectations at the show.
Jason Lim, the managing director of Eurokars Auto, a dealer for BMW, told the The Business Times that sales for his dealership were “good” and that he had expected a COE premium increase as well.
Ng noted that more buyers were willing to sign the dotted line this time around.
“There was less of a crowd than April,” he said, referring to the show’s earlier iteration from Apr 13 to 14, “but there were more quality buyers this time.”
“Buyers who had been toeing the line might have been more motivated to buy a car after the meagre increase in COE quotas,” added Wearnes’ Sng.
The COE quotas for the next three-month period were released before the show, on Oct 4, with Category A quota increasing by 5.6 per cent to 6,190 and Category B quota rising 2 per cent to 4,060.
Sng noted that while the COE supply is expected to increase over the next few years as deregistrations (the main contributor to passenger car COE supply) ramp up, it is closely related to demand and difficult to predict.
She said that 2015 and 2016 were strong years for car sales, and that “these owners are all now waiting to see if COE premiums will drop before buying”.
“But supply needs to increase significantly to make a difference and there is a lot of pent-up demand, which can be unpredictable. Right now, with COE supply increasing minimally, there is no reason for (the premiums) to drop,” she added.
In the short term, Komoco’s Ng pointed out, a higher number of unsuccessful bids for categories A and B could signal that demand will remain strong for the next bid, although they may soften in November when the quota gets bigger, especially for Category A.
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