COE supply for Feb to April up by 3.4% to 3,144 per month; first rise after 2 quarters of decline

The supply of certificates of entitlement (COEs) will rise by 3.4 per cent for the period between February and April 2023, the first increase after two quarters of decline.

Overall, there will be an average of 3,144 COEs available for bidding spread across the five categories each month during this quota period, said the Land Transport Authority (LTA) on Friday (Jan 20). This is up from the monthly average of 3,040 COEs for the November 2022 to January 2023 period.

With the increase, COE premiums look set to slip.

This is the first increase in COE supply following two consecutive quarters of falling supply, which came after a new method of calculation – aimed at reducing fluctuations – was introduced in July 2022. This method was used to calculate the August to October 2022 supply.

The quota for February to April 2023 is set using a second revised method of calculation, which was announced on Friday.

The supply of COEs is now based on the average number of vehicles taken off the road over four quarters, or 12 months. For the February to April 2023 period, the quota is based on deregistrations between January and December 2022.

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The LTA said that this latest method of calculation will “further reduce the quarter-on-quarter volatility of COE supply”.

In July 2022, the formula was revised to be based on the average number of deregistrations over a six-month period, instead of using just the figure for the past three months. This method of calculation was applied to just two quota periods: August to October 2022 and November 2022 to January 2023.

Between February and April 2023, in the category for cars with engines up to 1,600cc and less than 130bhp, as well as electric vehicles (EVs) with up to 110 kilowatts of power, there will be 1,010 COEs available monthly. This is up by 10.4 per cent from the average of 915 in the previous quota period.

For larger and more powerful cars and EVs, there will be 860 COEs available for bidding each month, 5.3 per cent more than the 817 available before.

Open category COEs, which can be used to register any type of vehicle other than motorcycles, will dip in supply. On average, there will be 259 such COEs available for tender each month, down 11 per cent from 291 before.

As Open category COEs are mostly used to register larger cars and EVs, this reduction affects the overall supply of COEs for such cars. Taken together, there are 1,119 COEs which can be used for large cars and EVs. This works out to be an increase of just under 1 per cent over the 1,108 COEs available in the previous quota period.

The supply of COEs for commercial vehicles will be cut most significantly.

For the new quota period, there will be an average of just 86 such COEs each month, down 37.2 per cent from the 137 before.

The main reason for the reduction is likely the popularity of the Early Turnover Scheme (ETS), where commercial vehicle owners who switch older and more pollutive vehicles for newer ones do not have to surrender the COEs or bid for a new one. In the calculation for the February to April 2023 period, there were 1,872 commercial vehicles that were taken off the road via the ETS.

There will be 929 motorcycle COEs available on average each month. This is up by 5.6 per cent from the 880 before. THE STRAITS TIMES

See how COE premiums have fluctuated over the years with BT’s COE tracker.