Fall in COE prices across board suggests car, commercial vehicle premiums hitting resistance level

[SINGAPORE] Certificate of Entitlement (COE) premiums for passenger cars and commercial vehicles have reached a price ceiling after months of increases, said industry observers.

This came as premiums for Category A (mainstream cars), Category B (large and luxury cars) and Category C (commercial vehicles) dipped in June’s second round of bidding on Wednesday (Jun 17).

“With today’s bidding result, there is some resistance, as the market is exhausted after so many rounds of COE premiums rising,” said Keith Oh, president of the Automobile Importer & Exporter Association (Singapore).

All three categories have been on a general uptrend in 2026 and two peaked in June’s first round of bidding: Category C set a new record of S$94,000, while Category A rose to S$126,009, coming close to its all-time high of S$128,105.

For categories A and C, it was the first notable dip since February.

2026’s premium climb eases

Oh said that the market had found its upper level in the previous round and backed away as a result.

“There is a psychological barrier for Category A, for example. Its highest level was around S$128,000 and it’s not easy to breach that; there is a resistance level,” he said.

The result is that those vying for COEs – dealers or consumers – bid more conservatively this time around.

Ron Lim, head of sales and marketing at Nissan distributor Tan Chong Motor Sales, said that bidding pressure had eased for both passenger car categories and Category C in recent rounds.

“Dealers have been cautious in trying to minimise excessive or aggressive bids that roll over,” he said. “The total number of bids has also come down in the last few rounds.”

This coincides with slower sales in passenger cars in the past two weeks, which he attributed to the June school holidays and a major car show in May.

“Footfall dropped significantly, which is normal for June. But there is little incentive for buyers to visit showrooms if premiums are as high as they were in June’s first round,” said Lim.

“Also, after The Car Expo in May, the bulk of dealers’ car order backlogs has likely been cleared.”

No plunge coming

However, observers said that fierce competition and a longer-than-usual break between bidding rounds could break the current resistance level.

Nicholas Wong, the CEO of authorised Honda dealer Kah Motor, said the open category’s relatively high premium – S$129,002 – compared with A and B indicates market expectations that car premiums may go up in the coming round.

“The open category is almost the same as it was in June’s first round of bidding,” he said. “That indicates to me an expectation that car premiums will not drop – and there is a three-week break before the next round.”

COE bidding occurs on the first and third Monday of each month, which means there is usually a gap of two weeks between bidding rounds.

Occasionally, however, there are three weeks between rounds. This means more time for dealers to build up a backlog of orders.

Chong Kah Wei, the managing director of Eurokars Auto, a dealer for BMW, said that a high open category premium “simply indicates dealers need (those COEs) to meet their end-month registration numbers”.

“Also, normally with a three-week break, the expectation is that premiums are going to go up,” he added.

An open category certificate may be used to register vehicles of any type except for motorcycles, and is often used as an alternative to passenger car COEs, or to “bank in” a premium in the expectation that it will rise in future.

Observers expect this to happen in the next round as fierce competition for sales still rages, especially in Category A.

The demand for popular electric vehicle brands such as BYD, Tesla and Chery has driven the premium up this year, to the point where it has exceeded Category B, in an inversion of typical results.

“Category A is the mainstream, so that is where all the competition is going to happen,” said Chong, who noted that while BMW had a sales hit with its new iX3, this did not cause Category B premiums to spike.

BMW launched the iX3 in Singapore on Jun 5. A major step for the company, the model is now the most popular EV in its segment in Europe, and its first allocation for Singapore has sold out.

“The word I would use is ‘relentless’,” said Kah Motor’s Wong.

“Looking at the total competitive market scenario, everyone is pushing for market share. There are now 60 players, compared to around 40 before 2021,” he noted.

“I wish I could say premiums will drop next round. But the sheer amount of competition out there, especially in Category A, means it will rebound for sure.”