COE premiums for larger vehicles fall while smaller car premiums rise slightly
In the latest round of Certificate of Entitlement (COE) bidding for December 2023, premiums for most vehicle categories saw a decline, with Category A being the notable exception.
Category A, which includes mainstream cars with engines up to 1,600 cc or electric vehicles (EVs) with less than 110 kW of power, saw a 3.6% rise, increasing by S$3,019 to S$88,020. This increase marked a rebound after a sharp 11.2% decline in premiums during the previous November tender.
On the other hand, Category B, which includes cars with engines over 1,600 cc or EVs with more than 110 kW, saw a 3.9% drop, with premiums falling by S$5,236 to S$130,100. Similarly, Category E, the open category used to register any type of motor vehicle except motorcycles, decreased by 1.2%, dropping S$1,614 to S$133,388.
The Category B premiums have experienced fluctuations in recent bidding rounds, particularly following an announcement about an increase in the COE quota. Following a sharp S$40,000 drop on November 8, premiums surged by S$25,335 on November 22. This volatility led to slower retail demand, with fewer bids being submitted in the most recent tender, as observed by Ron Lim from Tan Chong Motor.
Despite the slight uptick in Category A premiums, some dealers are still facing challenges with high COE prices, which are keeping consumers hesitant to commit to purchases. Ng Choon Wee of Komoco Motors commented that many buyers are finding current prices difficult to accept, especially considering that cars are depreciating assets.
The final tender of the year could see further changes in the market, with potential price adjustments tied to the Vehicular Emissions Scheme (VES), which offers rebates based on a car’s emissions. These incentives will be reduced significantly in 2024, potentially influencing Category A sales, as Tan Chong noted that stock limitations might drive dealers to lower prices to secure sales before the year ends.
In addition, Category C (for commercial vehicles) and Category D (for motorcycles) also saw price reductions, with premiums in Category C falling by 3.9% to S$71,001, and Category D premiums dropping by 1.4% to S$9,858.
