You are here

COE quota to go up by 9.7% for August-to-October period

The good news continues, with a 9.7 per cent rise in the Certificate of Entitlement (COE) quota for the next three months.


THE good news continues, with a 9.7 per cent rise in the Certificate of Entitlement (COE) quota for the next three months.

For those who had been hoping for a bigger spike, some dealers are telling them not to be disappointed because the COE supply should carry on expanding in the near future.

The upcoming August-to-October quota will have a total of 21,845 COEs, or 7,281 each month.

Of these, Category A, for so-called small cars, will get 3,373 COEs monthly, or an 18.2 per cent increase from the previous May-to-July 2015 quota.

Cat B, for bigger cars with engines greater than 1,600cc or 130 hp, will have 2,112 COEs per month, or a 13.8 per cent hike.

Cat E, the open category which currently tracks Cat B in terms of COE premium, will have 722 COEs monthly, posting the biggest increase among the categories with a 34.0 per cent jump.

Cat D for motorcycles is to be allotted 710 COEs a month, an 8.7 per cent rise.

But Cat C, for goods vehicles and buses, will suffer a big cut; it will be halved to 364 COEs monthly, or a 50.5 per cent reduction.

The COE quota is calculated based on replacement COEs from vehicles deregistered in the preceding three-month period between April and June 2015; the adjustments for changes in the taxi population, replacement of commercial vehicles under the Early Turnover Scheme (ETS) and expired COEs; and the provision for a 0.25 per cent per annum vehicle growth based on the vehicle population as at Dec 31, 2014.

Three months ago, a rise in the scrap rate had resulted in the current May-to-July quota reaping a substantial 41.1 per cent increase from the preceding February-to-April quota.

Neo Nam Heng, chairman of the Prime Motor group of companies, said the reason for the smaller climb this time comes from many car owners choosing to keep their ageing cars on the road "until the very last day", so this has not translated into deregistrations which are recycled into COEs.

"But you can be sure that COEs will increase every quarter because each car only has a 10-year life span," he said.

The next round's higher number of Cat A, B and E COEs will be "enough to weigh on COE prices", added Mr Neo.

The market is expecting a 10 per cent adjustment in passenger car premiums, he said.

He is unsurprised by the sharp fall in commercial vehicle COEs.

"The Cat C quota dropped because commercial vehicle owners did not scrap their vehicles in April, May and June. They are waiting for Aug 1."

Between Aug 1 this year and July 31, 2017, a bigger pool of diesel commercial vehicles will be eligible for the ETS, as the scheme is being expanded to include owners of diesel vehicles with Euro II/III emissions standards. Some 59,000 vehicles, or about 40 per cent of the total Cat C diesel vehicle population, will benefit.

ETS was introduced in April 2013 for Pre-Euro/Euro I Cat C diesel vehicles to encourage the replacement of old and more pollutive diesel vehicles with cleaner Euro V models to help reduce vehicular emissions of PM2.5.