Certificate of Entitlement (COE) premiums for Category A cars closed the lowest in more than eight years during the latest bidding exercise. Cars in this category fell by over $9,000 and closed at $25,000.
Why Did it Close So Low?
While it came as a surprise, many experts predict that the low COE price will be a one-time thing. Experts also expect all the COE prices to make a rebound in the next couple of rounds.
The fall in prices over the last few months can be attributed to the dark clouds that hung over the market. Ever since the Vehicular Emissions Scheme (VES) was introduced this year, demand for vehicles has been low. Which meant that there was also a lower demand in COE premiums.
However, we don’t expect the premiums to fall even more. That’s because many players in the market have cleared their old stock to make way for new cars. These new cars will adhere to the VES rules and qualify for more rebates.
The clearer understanding of VES rules and rebates by all parties will see more people willing to take the plunge on a new car. Which means a higher demand. The increase in demand will naturally lead to an increase in COE premiums.
Additionally, with the latest exercise producing the lowest COE premiums, it’s likely that people will see it as a perfect time to get a car.
All Premiums Fell
Cars in Category B fell to $31,000 from $33,900. And Open Category COEs closed at $31,001 from $34,400.
Motorcycle premiums closed at S$6,514, down from S$6,889.
The COEs for commercial vehicles, which include goods vehicles and buses, fell to S$31,092 from S$32,001 in the latest bidding exercise.
There was a total of 5,580 bids were received but only 4,239 COEs available.