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COE premiums flat as buyers go into wait-and-see mode

Cat A inches up S$602 to S$56,001 while Cat B slides S$1,811 to S$58,190

Most dealers had expected passenger car premiums to move in a narrow range, so they were not surprised by Wednesday's results for the first bidding exercise in October.


CERTIFICATE of Entitlement (COE) premiums were largely flat in the first bidding exercise for October, with the so-called "big car" category slipping by about a couple of thousand dollars amid economic concerns and the upcoming COE quota, dealers said.

COE Category B, for cars above 1,600cc or 130 horsepower (hp), slid S$1,811 to S$58,190; Cat E, the open category which currently tracks Cat B, shed S$2,499 to S$58,801.

On the other hand, Cat A, for cars below 1,600cc or 130 hp, inched up S$602 to S$56,001.

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Meanwhile, Cat C for goods vehicles fell S$399 to S$44,890, and Cat D - for motorcycles - was marginally lower by S$43 at S$6,201.

Most dealers had expected passenger car premiums to move in a narrow range, so they were not surprised by Wednesday's results.

Nicholas Wong, general manager of authorised Honda distributor Kah Motor, said the rise in Cat A was due to the lower premium from the preceding tender.

Two weeks ago, Cat A dropped by about S$1,700 to the S$55,000 level, thus luring some buyers back into showrooms and subsequently boosting the Cat A price.

Mr Wong said: "But the number of new orders didn't go up a lot, so the increase is only a few hundred dollars."

Still, he sees firm demand in the small-car segment.

He said: "The market is still strong for Cat A, but less so for Cat B."

This is because the demand for Cat B is mainly from business people, who may be worried about the softening economy and are holding back on vehicle purchases.

However, with the difference in the Cat A and B premiums now small - only about S$2,000 - orders for Cat B models could start coming in.

The managing director of a luxury dealership said many people are also waiting for news about the new COE quota for November 2015 to January 2016 - the one which they expect to be bigger.

The announcement of the next quarterly quota is due soon.

He said: "Those who can afford to buy have already bought new cars to replace their old cars."

Those still in the market for a new car, on the other hand, may have slightly tighter budgets, he added.

"So they are hoping that the new quota will bring more COEs and hence, lower premiums," he said.