COEs: Large car category reaches new 2025 high of S$123k as some dealers ‘caught off guard’
Car dealers had to play catch up after holding back in preceding rounds as larger COE quota increase did not materialise, say observers
[SINGAPORE] The Certificate of Entitlement (COE) premium for larger, more powerful passenger cars (Category B) has reached a new high for the year, as the premiums for all categories, except for motorcycles, went up.
According to observers, some dealers needed to bid aggressively to secure certificates after holding back in preceding rounds on the assumption that the COE supply would continue its growth trend.
In the first round of COE bidding for August, the premium for Category B rose 3.7 per cent or S$4,397 to S$123,498, exceeding the previous 2025 record of S$121,501 set in January’s first round of bidding.
The Category B COE applies to larger, more powerful cars with engines of more than 1,600 cubic centimetres (cc) in capacity or with more than 97 kilowatts (kW) of power, or for electric vehicles (EVs) with more than 110 kW.
The COE premium for mass-market cars, Category A, was stable: It rose 0.9 per cent, or S$907, to S$102,009.
The Category A COE applies to cars that have engines of up to 1,600 cc in capacity or with up to 97 kW of power, or for electric vehicles (EVs) with up to 110 kW of power.
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The Category C premium, for commercial vehicles and buses, grew 2 per cent, or S$1,401, to S$70,001.
Category E, the open category which can be used to register any type of motor vehicle except motorcycles, saw its premium go up 1.9 per cent, or S$2,334, to S$122,334, edging close to the 2025 record of S$123,000 set in January’s first round of bidding.
The motorcycle category, D, was the only one to post a dip. It was down 3.4 per cent, or S$322, at S$9,189.
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Caught off guard
Industry observers told The Business Times that the recent increase in COE quotas was less than expected, and this may have caused some dealers to bid more aggressively.
Ng Choon Wee, the commercial director of Hyundai distributor Komoco Motors, said: “The (COE quota) increase was too small, nowhere near enough to meet demand, so some dealers may have been caught unawares.”
The latest COE quota supply update for the period August to October saw overall supply increasing 2.6 per cent compared to the preceding three-month period to 18,701. Supplies of Category A and B were both up 1 per cent at 7,586 and 4,737, respectively.
However, the May-July period’s supply increase was greater – overall COE supply increased 6.4 per cent, with Category A up 10 per cent at 7,511 and Category B up 5 per cent at 4,689.
The increase for February-April was also more significant: 8.2 per cent overall, 10.3 per cent for Category A and 10 per cent for Category B.
The COE quota is revised every three months, with the quota announcement typically made in the last month of each period.
As reported by BT, car dealers may have bid conservatively in the second round for July which ended on Jul 23 on the expectation of an increased quota, which was announced on Jul 28. Passenger car premiums for that round were largely flat.
“Since they probably held back on bidding, they needed to bid aggressively to secure more certificates this time around so they can fulfil their orders,” said Ng.
Nicholas Wong, CEO of authorised Honda dealer Kah Motor, said : “They were waiting for more quota, but they read the market wrongly, and there were still a lot of backorders from July.”
Ng said that the dealers may have assumed that the quota would increase in similar proportions every three-month period, given the government’s stance on the matter.
In March, then senior minister of state for transport Amy Khor said the authorities will continue to increase the COE quota for cars and commercial vehicles every quarter until the supply peaks from 2026, echoing earlier statements in 2024 from the Ministry of Transport.
“A 1 per cent increase is less than expected, but it is still an increase. But it is clear that demand is still very strong and that’s why COE premiums will remain high,” said Ng.
Both Ng and Wong added that car demand had been strong in recent weeks.
Ng pointed out that many brands have rolled out SG60 promotions and showroom traffic and sales had both increased in the past two weeks.
“The top five car brands are still in stiff competition, and I think private hire car fleets are still taking COEs opportunistically when they can,” said Wong.
But for the coming weeks, it is not likely that COE premiums will be going south.
“I think part of what contributed to Category B’s increase is dealers looking at the quota and thinking: “Premiums are not going to come back down, and in fact, might go even higher. So I’d better get what I can now.”
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