COE prices kick off 2024 with over 20% tumble for passenger car categories
Derryn Wong
CERTIFICATE of Entitlement (COE) prices for January’s first round of bidding saw premiums for passenger car categories fall. Premiums for all other categories, except motorcycles, also fell.
The price for Category A, for mainstream cars, fell 23.5 per cent or S$19,990 to S$65,010.
The Category A COE applies to mainstream cars with engines up to 1,600 cubic centimetres (cc) in capacity or with up to 97 kilowatts (kW), or for electric vehicles (EVs) with up to 110 kW.
Prices for Category B fell by almost the same proportion – 22.7 per cent, or S$24,991 to S$85,010.
Category B is the category for cars with engines of more than 1,600 cc in capacity or with more than 97 kW, or for EVs with more than 110 kW.
The significant decreases for Categories A and B mean that passenger car COEs have returned to price levels not seen since early 2022.
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Category A’s price is the lowest it has been since February 2022’s second round of bidding, at S$63,000. Category B’s price is the lowest since January 2022’s second round of bidding, at S$82,001.
Prices for Category C, applicable to commercial vehicles and buses also fell, by 2.6 per cent or S$1,824 to S$67,599.
The price for Category D, for motorcycles, was the only one to go up, rising 1.2 per cent or S$112 to S$9,114.
Category E, the open category used to register any type of motor vehicle except for motorcycles, dropped by 10.1 per cent or S$12,000 to S$106,399.
Price spike expected for January’s second round
Car dealers The Business Times spoke to said that the drop in COE premiums was expected, as it was in line with the seasonal slow-down of the car trade.
“Seeing COE prices at this level is certainly a refreshing sight, but an expected one,” said Charmain Kwee, executive director of multi-brand dealership Eurokars Group.
She added that dealerships typically see less traffic between December and early January and less car-buying activity in general, so taking this round’s results as indicative of COE prices going forward is “probably not accurate”.
Sabrina Sng, managing director for Lotus, Polestar and Insurance at dealership group Wearnes Automotive, said that the first bidding round of a new year usually brings a drop in COE prices because there are very few days to collect new orders.
She also said that car dealers usually clear as many of the previous year’s orders as they can in order to improve total registration figures – a key performance indicator – for that year.
Both Kwee and Sng pointed out that COE price pressure is normally reduced in the period preceding the Singapore Motorshow, as buyers tend to hold back in anticipation of deals or promotions. This year’s edition of the show runs from Jan 11 to 14. January’s second round of COE bidding starts on Jan 15 and ends on Jan 17.
But dealers said they expect that this combination of relatively low COE prices now, a major sales event looming, and pent-up demand could trigger an increase in prices in January’s second round of bidding.
Ng Choon Wee, commercial director of Hyundai distributor Komoco Motors, said: “With the slow first round and the Motorshow next week, COE prices are sure to go up in the next round – it’s just a matter of how much.”
Eurokars’ Kwee said: “Because COEs can be priced based only on the last round of bidding, and nobody can accurately predict the prices, buyers and dealers can only try and ‘buy on the dip’ to secure a lower COE.”
Elevated COE prices tend to put a brake on car sales as buyers delay car purchases to wait for the price to come down.
“When COE prices were around S$85,000 for Category A, and S$110,000 for Category B, those were considered very high prices from a consumer’s perspective. Now that they’ve come down some more, they could reach a certain level of acceptance among those who have been waiting to buy a new car,” said Ng.
Dealers are cautiously optimistic about COE prices for the rest of the year, given that the supply of COEs looks set to improve on the back of more cars hitting the 10-year and 15-year mark, when de-registrations take place.
Acting Minister for Transport Chee Hong Tat said in Parliament on Nov 6 that the government would continue to add more COEs from guaranteed de-registrations throughout 2024 to bolster supply.
Komoco’s Ng said: “I think for the rest of the year, aside from January, COE prices will come down some more.”
Wearnes’ Sng said: “I don’t think S$150,000 COEs will come back, but whether COEs stay at this level remains to be seen.”
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