COE premiums crash as market hits ‘near standstill’; mainstream car category dips 10%, large cars down 13%
Category B leads the fall, with a decline of S$16,888 to S$115,001
[SINGAPORE] Certificate of Entitlement (COE) premiums posted a steeper-than-expected drop in November’s first round of bidding as the car market continues to back away from recent highs, said industry observers.
Premiums for all car categories fell significantly, with the mainstream car category continuing to ease from record highs seen in early October.
Noting that COE premiums have been “climbing and climbing”, Octagon Motors Group managing director Ng Lee Kwang said the declines were “expected”. “It has reached a point where consumers simply reject (this price level),” he added.
The premium for Category A fell 9.8 per cent or S$11,998 to S$110,002, marking the category’s biggest drop in recent years.
Category A applies to cars that have engines of up to 1,600 cubic centimetres (cc) in capacity or with up to 97 kilowatts (kW) of power, and electric vehicles (EVs) with up to 110 kW of power.
Category A premiums had climbed since June, setting new records in September and the first round of bidding in October with a peak of S$128,105. This was driven by increased demand for EVs ahead of a reduction of government incentives come 2026, which was announced on Sep 8.
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The latest bidding result marks the second consecutive drop for Category A, after a dip in October’s second round to S$122,000 from S$128,105.
Category B posted the biggest decrease in this round, falling 12.8 per cent or S$16,888 to S$115,001. The category covers larger, more powerful cars with engines of more than 1,600 cc in capacity or that have more than 97 kW, and EVs with more than 110 kW.
Category B rose almost in tandem with Category A in September and October, topping out at S$141,000 – approaching but not breaking the existing record of S$150,001 set in October 2023.
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Category E, the open category which can be used to register any type of motor vehicle except for motorcycles, decreased 11 per cent or S$14,990 to S$121,010.
Category C, applicable to commercial vehicles and buses, fell 1 per cent or S$801 to S$76,000.
Category D, used for motorcycles, dipped 8.4 per cent or S$789 to S$8,600.
Slow ride, take it easy
Observers said business slowed in recent weeks as COE premiums were simply too high for consumers to accept, and because the increase in premiums far exceeded the forthcoming reduction of EV rebates.
Anthony Teo, managing director of BYD distributor and dealer Vantage Automotive, said premiums were “simply too high”, causing the market to slow down. “We expected a reduction in premiums, but (the drop was) more than we expected,” he added.
“I think (buyers) who really wanted to go ahead with their purchases would have already done so in previous rounds, so that is why premiums dropped.”
Ng Choon Wee, commercial director for Hyundai distributor Komoco Motors, said that car sales had come to a “near standstill” since October’s first round, when Category A hit a new record.
“The drop was expected as there was simply no interest from buyers, despite the drop after the previous bidding round, as COE premiums were still on the very high side,” he said.
“In fact, it’s still high even after today’s drop, which is quite big.”
He added that buyers have realised the increase in premiums now exceeds the impending reduction in EV incentives.
For instance, the Tesla Model 3 RWD 110kW will receive a maximum combined rebate of S$30,000 in 2026, down S$10,000 from the current sum of S$40,000.
Meanwhile, the Category A premium has climbed S$20,216 since September’s first round concluded on Sep 3, before the reduction was announced.
Concurring, Octagon’s Ng said that while car dealers are “offering big promotions and discounts” to drive sales, consumers are “just not biting” because COEs are too high.
“On a premium of S$122,000, it is still more than S$1,000 a month just on the COE alone,” he added. “People will wonder: ‘Why should I chiong (rush) in?’”
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