COE premiums dip across the board, except for small cars
CERTIFICATE of entitlement (COE) premiums slipped across most categories for the first round of bidding in December, with mainstream cars in Category A being the only exception.
Premiums for Category A rose 3.6 per cent or S$3,019 to S$88,020, rebounding from the 11.2 per cent drop during the last tender in November. The category applies to mainstream cars with engines of up to 1,600 cc in capacity and with less than 97 kW of power, or for electric vehicles (EVs) with less than 110 kW.
Meanwhile, premiums for larger cars slipped lower in the latest cycle, reversing from the sharp increases during the second bidding last month. Category B COE premiums fell 3.9 per cent or S$5,236 to S$130,100. The category covers cars with engines of more than 1,600 cc in capacity or with more than 97 kW of power, 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, also fell in the latest bidding, with premiums slipping to 1.2 per cent or S$1,614 to S$133,388. Category E COEs are typically used to register Category B cars.
Category B COE premiums saw volatile movements in the past two COE biddings last month, first plunging by S$40,000 on Nov 8 after news of a COE quota increase. But premiums rebounded by S$25,335 at the next tender on Nov 22.
Ron Lim, head of sales and marketing at Nissan distributor Tan Chong Motor, noted that the strong rebound in the last round led to a slowdown in retail demand, as evidenced by almost 300 fewer bids submitted this tender.
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Meanwhile, Ng Choon Wee, commercial director for Hyundai distributor Komoco Motors, said prices are still hard for buyers to accept. He does not expect a spike in prices heading into the final bid for this year.
“Overall, the market is still weak as COE is still high despite it coming off the all-time high,” he added, noting that both Categories A and B received fewer bids compared to two weeks earlier. “Consumers are still reluctant to commit to a capital purchase, especially since cars are considered a depreciating asset.”
Ng noted that the increase in Category A COE premiums may have been limited as some dealers have run out of stock. He added that those with immediate stock may have been cutting prices to secure sales to take advantage of the current Vehicular Emissions Scheme (VES) to register cars this year.
The VES grades cars into bands, depending on how much they pollute, and hands out penalties or rebates accordingly. In 2024, rebates available under the VES for cars in the A2 band would be reduced to S$5,000 from S$15,000.
Tan Chong’s Lim said: “Buyers are now left with one more tender to lock in the VES incentives for this year but stock could be very limited as most dealers have almost finished paring down their stock that are going to be affected by the VES changes.”
COE prices for commercial vehicles and motorcycles also fell in the latest bidding cycle. Prices for Category C, applicable to commercial vehicles and buses, decreased 3.9 per cent or S$2,888 to S$71,001. Motorcycle COE premiums in Category D slipped 1.4 per cent or S$143 to S$9,858.
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