The latest Certificate of Entitlement (COE) bidding exercise in Singapore has brought significant relief to vehicle buyers, with COE prices dropping across all categories. The Jan 22 tender marks the last exercise of the current quota period, and the upcoming increase in COE supply from February is expected to further influence market dynamics. Here’s an in-depth look at the price changes and what they mean for buyers and the automotive industry.
Key Highlights from the Jan 22 COE Bidding Exercise
- Significant Price Drops
- Motorcycles (Category D): Prices saw the steepest drop, falling by 14.2% to S$7,721 — the lowest since May 2023.
- Small Cars and Electric Vehicles (Category A): Premiums dipped slightly by 0.1% to S$93,601, from S$93,699.
- Large Cars and EVs (Category B): Prices decreased by 4% to S$116,625, down from S$121,501.
- Open Category (Category E): Premiums dropped by 6.4% to S$115,112, compared to S$123,000 previously.
- Commercial Vehicles (Category C): Prices fell by 3.6% to S$65,476, from S$67,891.
- Market Trends and Insights
- The total number of bids in the Jan 22 exercise was 3,895, with 2,715 COEs available, reflecting lower bidding activity compared to earlier tenders.
- Motor traders attribute the reduced demand to the upcoming Chinese New Year holiday period and the anticipation of a higher COE supply from February.
Upcoming COE Supply Increase: What to Expect
The Land Transport Authority (LTA) announced an 8.2% increase in COE supply for the February to April 2025 period, with quotas across most categories seeing significant boosts:
- Overall Quota: Rising from 15,834 to 17,133 COEs.
- Category A, B, C, and E Quotas: Set to grow by approximately 10%.
- Category D Quota: Remaining unchanged.
This increase aligns with the government’s plans to progressively release 20,000 additional COEs in the coming years to accommodate growing vehicle demand and the transition to the ERP 2.0 system for traffic congestion management.
Expert Opinions on COE Trends
- Cooling Demand for Larger Cars and EVs: Motor traders report reduced interest in Category B vehicles after premiums reached a 13-month high of S$121,501 in early January. This decline also affected Open Category COEs, traditionally dominated by larger car registrations.
- Impact of the Singapore Motorshow: Industry players, including Mr. Raymond Ng of Eurokars EV, noted that deals made during the Singapore Motorshow could drive higher demand for COEs in the next bidding rounds. However, holiday closures may temporarily dampen activity.
- Motorcycle Market Dynamics: Dealers like Yew Heng Group cited limited registration periods and holiday closures as reasons for reduced motorcycle COE bidding, contributing to the sharp price drop.
What This Means for Buyers
- Timing is Key: With COE prices dipping and a higher supply expected, prospective vehicle buyers might benefit from waiting until the February quota period to make their purchases.
- Motorcycle Bargains: With Category D premiums at their lowest since May 2023, now could be an opportune time for motorcycle buyers to lock in favorable prices.
- Impact of Upcoming Quota Changes: Buyers should stay informed about bidding trends as increased COE availability could stabilize or even reduce premiums further, depending on demand.
Tips for Navigating the COE Market
- Monitor Quota Announcements: Keep an eye on LTA updates about COE supply adjustments.
- Leverage Showroom Promotions: Take advantage of post-motorshow deals or festive discounts offered by dealerships.
- Consult Industry Experts: Seek advice from motor traders or authorized dealers for insights into future price trends.
