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COE premiums mostly higher in latest bidding exercise
CERTIFICATE of entitlement (COE) premiums were mostly higher in the latest bidding exercise on Wednesday, with the exception of the motorcycle category, where the premium dipped.
The COE for Category A, for cars up to 1,600cc and 97 kW, rose from S$64,900 to S$67,889, while that of Category B (for cars above 1,600cc or 97kW) increased from S$70,890 to S$72,890.
The premium for the open category rose from S$71,300 to S$73,900, while the premium for goods vehicles and buses climbed from S$63,701 to S$65,001.
The premium for motorcycles dropped to S$4,189 from S$4,290 previously.
Ron Lim, the general manager of Tan Chong Motor sales, said the figures from the latest round of bidding surprised on the upside.
"Basically, the market seems to be slowing down, but some dealers are probably getting aggressive in their bids," he said, adding that this could be due to the need to meet year-end numbers or commitments to their principals.
On the other hand, there is some hesitation on the part of buyers, as prices jump up in each round of bidding.
"It doesn't augur well for general consumers. Deregistrations are creeping up. There will be a lot of replacement demand," he added.
The COE premium for goods vehicles and buses gaining another S$1,300 to hit S$65,001 represents an increase of more than S$15,000 since Sept 17, when the premium for this category stood at S$49,889.
For the current quota, the numbers in Cat C (for goods vehicles and buses) were cut by a sizeable 45.2 per cent due to the success of the Early Turnover Scheme (ETS).
Under ETS, the owner of an existing goods vehicle does not have to bid for a COE but instead pays a pro-rated COE based on the prevailing quota premium. But every new vehicle registered under ETS means there will be one fewer COE available in the next quota.
The demand from those not eligible for ETS is causing upward pressure on Cat C premiums, Mr Lim pointed out.
"The quota is simply too little."
The current Cat C premium of S$65,001 at this point, however, is still below the level of roughly a year ago; back in October 2013, it shot past S$76,300.
The Land Transport Authority (LTA) received a total of 3,075 bids at the end of Wednesday's round of bidding. Of these, 1,973 were successful.