COE bidding: Mainstream car premium spikes 9.2% to S$92,850
Price for large-car category down 1.4% at S$109,598; other categories post varied increases
THE Certificate of Entitlement (COE) premium for the mainstream car category posted a 9.2 per cent or S$7,850 rise to S$92,850 in February’s second round of bidding.
Results for other categories were mixed: Motorcycles and commercial vehicles posted notable increases, while the large car and open categories saw small changes.
The mainstream car category, A, applies to cars with engines of up to 1,600 cubic centimetres (cc) in capacity or with up to 97 kilowatts (kW) of power, or for electric vehicles (EVs) with up to 110 kW of power.
The premium for Category C, used to register goods vehicles and buses, rose 4.3 per cent or S$2,683 to S$65,189.
Category D, used for motorcycles, was up 6.1 per cent or S$502 at S$8,791.
The premium for Category B fell 1.4 per cent or S$1,506 to S$109,598. Category B is for larger, more powerful cars with engines of more than 1,600 cc in capacity or that have more than 97 kW of power, or for EVs with more than 110 kW of power.
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Category E, the open category which can be used to register any type of motor vehicle except for motorcycles, was up S$2 at S$110,002.
Rebound
Dealers who The Business Times spoke to said that lower premiums from February’s first round of bidding, as well as sales promotions, helped increase showroom traffic and increase buying, which drove up the premiums for Category A.
Cars are typically sold as a package consisting of the vehicle and the COE, with pricing based on the last round of bidding.
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Earlier in February, Category A’s price declined to S$85,000, its lowest price in nearly a year; the premium for Category B was down almost 5 per cent at S$111,104.
Jason Lim, the managing director of BMW dealer Eurokars Auto, said that after the significant drop in February’s first round of bidding, many dealers adjusted their pricing to suit and ran promotions as well.
“Low COE levels mean lower sticker prices, so naturally, dealers tried to capitalise on this and get a good start to sales for the year,” he added.
Nicholas Wong, the chief executive officer for authorised Honda dealer Kah Motor, noted: “Many dealers were trying to push traffic and sales. After a quiet period over the last two rounds, including Chinese New Year, the market is back.”
A spike was thus expected.
“It’s normal for COEs. As soon as it gets better, it then gets worse,” he said, adding that this spike shows that there is still a lot of pent-up demand for cars in the market, especially for those in Category A.
He pointed out that the level of oversubscription for Category A was double, compared with the 1.4 bids per quota in the previous round. Total bids received for the category increased almost 160 per cent to 2,290.
The result, he added, was a “total rebound”, since it almost erased the dip from February’s first round of bidding for Category A and returned it to near late January’s premium of S$93,601.
Hire purchase
Dealers said that the latest COE results do not reflect the effects of the recently updated rules on private-hire cars (PHCs).
On Wednesday (Feb 19) morning, the Land Transport Authority stipulated that PHCs which are newly acquired by businesses have a mandatory three-year lock-in period, during which the cars must remain classified as PHCs, and may be transferred only to other businesses, not to individuals.
The move could constrain how such companies bid for COEs, as they will no longer be able to sell such PHCs as second-hand cars at their whim. This was earlier a key advantage for owners of PHC fleets, compared to those of taxi fleets.
Eurokars Auto’s Lim said: “The latest bidding results are affected mostly by the low level of the preceding round. We will not see the true effect of the new rule for a few rounds more at least.”
Wong said: “My feeling is that when COE prices are high, PHC fleet buyers bid less or stay away. The effect is yet to be seen in this round, but, moving forward, (the change) may help.” LTA said in a social media update that car leasing companies won 6 per cent of Category A COEs and 8 per cent of Category B COEs in this round.
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