Premium car COE prices hit record high of S$121,000, other categories remain largely stable
CERTIFICATE of Entitlement (COE) prices for June’s second round of bidding ended with stable, mixed results for all categories, although the premium car category, Category B, hit a record high of S$121,000.
COE prices for Category A, the category for mainstream cars with engines up to 1,600cc in capacity and with less than 97 kilowatts of output, fell 1.8 per cent or S$1,795 to S$96,206.
Prices for Category B, the category for cars with engines of more than 1,600cc in capacity or with more than 97 kilowatts of output, increased 0.3 per cent or S$298 to S$121,000, a new record for the category.
Prices for Category C, applicable to commercial vehicles (CVs), increased 1.6 per cent or S$1,339 to S$83,140.
Prices for Category D, used for motorcycles, fell 2.7 per cent or S$292 to S$10,709.
Category E, the open category which can be used to register any motor vehicle except motorcycles, increased by 1.8 per cent or S$2,111 to S$123,000. One automotive industry figure The Business Times spoke to expressed mild surprise at Category B’s new record this round, while another said it was not entirely unexpected.
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The general manager for a Japanese car brand dealership said that Category B was “totally out of control”. They had expected a mild price drop this round, after encountering “weak retail” following the price rises from June’s first round of COE bidding.
The sales manager of an East Asia car brand said: “I think the continued demand for luxury cars means the support level of this Category B premium is there. Without (an increase) in COE quota, prices will continue at this level.”
They pointed out that Category B had already almost touched record price levels in earlier rounds, closing at S$120,889 in April’s first round of bidding and S$120,702 in June’s first round of bidding.
In contrast, Category A has exhibited almost the opposite behaviour, and stayed below the S$100,000 level.
While there is some overlap in the form of luxury cars that qualify for Category A COEs, they said that Category B is still very much a luxury category, hence the approximate S$25,000 price difference between the two.
Category A has breached the S$100,000 mark only twice this year – in April’s second round of bidding and May’s first round of bidding – they pointed out, while Category B has not dipped below that mark since October 2022’s first round of bidding, when it was at S$95,856.
For CVs, the 1.6 per cent increase in Category C price now means that there has been four consecutive rounds of price increases, from S$75,334 in April’s second round of bidding.
The sales manager for a brand dealership that sells both passenger cars and CVs said that a relatively high Prevailing Quota Premium (PQP) could be a contributing factor.
PQP is the moving average of COE prices for the past three months, and is used to calculate the price of renewing a COE after 10 years. It is also the number used to determine the COE price for a CV that is bought under the Early Turnover Scheme (ETS).
With a higher PQP, the cost for CV owners to obtain a COE through ETS can in some cases be higher than bidding for it conventionally, he said.
But with prices for March – where the Category C COE was at its highest level this year – no longer part of PQP calculations in July, that could lead to CV owners utilising the ETS rather than bid for COEs directly, leading to a drop in prices.
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