Commercial vehicle COE likely to breach S$100,000; mainstream car premiums to remain elevated

[SINGAPORE] Industry observers predict new highs for commercial vehicle Certificate of Entitlement (COE) premiums this year.

Strong demand for mainstream cars, meanwhile, is expected to keep premiums for that segment high.

Ryan Woon, CEO of EcoSwift, the agent for China commercial vehicle brand Sany in Singapore, believes Category C premiums “will hit S$100,000 for sure”.

“The demand for (these certificates) is strong and some of my clients are bidding to ensure they get their vehicles,” he added.

This comes as the premium for Category C – used to register commercial vehicles – reached a new high of S$94,000 in June’s first round of bidding on Thursday (Jun 4), exceeding the previous record of S$92,223 set in May’s second round of bidding.

New high for Category C coming?

Woon, whose company sells mostly heavy commercial vehicles, said that some of his clients were bidding in the last COE auction in the S$98,000 to S$100,000 range – substantially above the final result of S$94,000.

“Once they put bids of that magnitude in, that can be considered quite aggressive and shows how eager they are to replace or obtain vehicles,” he added.

A general manager of a dealership for a China commercial vehicle brand told The Business Times that “industry talk is indicating S$100,000 as the next realistic level, (and) dealers are all assuming it will be there soon”.

BT previously reported that Category C has been on the uptrend for the past year or so.

This is a result of rising demand for electric heavy vehicles (EHVs) with the introduction of incentives, high diesel fuel prices, and overall demand for vehicles to service infrastructure development and commercial needs.

Noting that COE premiums – including for Category C – “remain elevated”, a Land Transport Authority (LTA) spokesperson said that registrations of EHVs and electric buses “have picked up” since January.

The spokesperson added that this “may be due to the increasing take-up of the Heavy Vehicle Zero Emissions Scheme”, which offers S$40,000 per EHV, and up to S$30,000 for an accompanying charger.

EHV take-up in the first two months of 2026 was up 10 times year on year.

Neo Tiam Ting, director of commercial vehicle dealership Think One, said a S$100,000 Category C premium is “possible”, given the incentive for EHVs and there being “quite a number of EV lorries and trucks available in the popular 10-footer and 14-footer truck market”.

But observers are mixed on whether the category will stop at that point.

The dealership’s general manager, for one, believes that it “will still be on an uptrend”. “There is limited supply of Category C COEs, so everyone is bidding up,” he said.

He pointed out that pressure falls on buyers of smaller commercial vehicles, who may have no choice but to stump up the cash. “Because you need it for your business, and (when the COE expires) you need to change the vehicle... Renewal of the COE doesn’t make sense because the premium is very high.”

Woon thinks S$100,000 will be the tolerance level in the coming weeks, adding that smaller commercial vehicles and larger, more expensive heavy commercial vehicles are both bidding in the same category.

“Once you reach S$100,000 for a COE premium, the smaller vehicles are harder to justify and for smaller businesses to finance,” he said.

Category A for “action”

The mainstream car category – A – has been on the rise for months. But it has not set a new record, despite flirting close to the category’s all-time high of S$128,105.

On Thursday, Category A was up 1.4 per cent or S$1,780 at S$126,009. Observers expect it to remain stable for now as the backlog of orders from The Car Expo, a major automotive show, are cleared.

The LTA spokesperson also cited the show as a contributor to sustained demand and elevated premiums.

Adelene Tan, managing director of BYD distributor and dealer Vantage Automotive, said: “We did not expect major increases in this round and for bidding to be quite conservative – and that’s because the price is too high; S$128,000 is the barrier.”

Brisk car sales at The Car Expo, which took place from May 9 to 11, could take “two to three rounds” to clear, she said.

Industry sources said that China brands, including BYD and Chery, racked up healthy sales at the show.

“We outsold our target by quite a bit,” Tan added. “It was the highest single order book from a car show for BYD in Singapore.”

When a sales agreement for a car is signed, a dealer typically takes a few bidding rounds to secure the COE at the agreed price, after which the car can be registered and delivered to the customer.

But even with the backlog cleared, demand could easily spike since the most popular and in-demand car models – mainstream EVs such as those from Tesla, BYD and more – are crowding Category A.

“Category A is where all the action is,” Tan said.