The latest Certificate of Entitlement (COE) bidding exercise in Singapore on February 5, 2025, saw a significant drop in premiums across most categories, with the exception of motorcycles. Category A, covering smaller and less powerful cars and electric vehicles (EVs), recorded the steepest decline, dropping by 9.2% to $85,000. This marks the lowest premium for the category since March 2024.
Meanwhile, motorcycle COE premiums defied the trend, increasing by 7.4% to $8,289. The fluctuation in COE prices is influenced by multiple factors, including changes in quota availability and market demand.
COE Price Changes on February 5, 2025
Category A: Smaller Cars and EVs
- New price: $85,000
- Previous price: $93,601
- Decrease: 9.2% (-$8,601)
- Lowest since March 2024 ($83,000)
Category B: Larger and More Powerful Cars and EVs
- New price: $111,104
- Previous price: $116,625
- Decrease: 4.7% (-$5,521)
Category C: Commercial Vehicles
- New price: $62,506
- Previous price: $65,476
- Decrease: 4.5% (-$2,970)
Category E: Open Category (For Any Vehicle Except Motorcycles)
- New price: $110,000
- Previous price: $115,112
- Decrease: 4.4% (-$5,112)
Category D: Motorcycles
- New price: $8,289
- Previous price: $7,721
- Increase: 7.4% (+$568)
Factors Behind the COE Price Drop
1. Increased COE Quota
The February 5 exercise marks the start of the new three-month COE quota period (February–April 2025), during which 8.2% more certificates are available compared to the previous period (November 2024–January 2025). With more COEs up for grabs, bidding competition has eased, leading to lower premiums.
2. Post-Chinese New Year Slowdown
Motor traders attribute the drop in bids to the recent Chinese New Year holiday, which resulted in showroom closures and fewer business days. Many potential buyers were also traveling, delaying their purchase decisions.
3. Wait-and-See Approach by Buyers
Industry experts suggest that some buyers have postponed purchases to observe COE trends in the new quota period before committing to a car. As a result, demand was lower in this bidding round.
How the COE Price Drop Affects Car Buyers
Lower Car Prices Expected
With COE prices falling, car dealers are expected to lower vehicle prices accordingly. However, not all dealers may reduce prices by the full extent of the COE decline, as some anticipate a rebound in COE premiums in the next bidding round.
More Opportunities for Buyers
Potential car buyers looking to replace older vehicles or purchase a new car may find this an opportune moment to enter the market. The lower COE costs could make vehicle ownership more affordable.
Market Predictions: Will COE Prices Continue to Drop?
Industry experts believe that COE prices may fluctuate in the coming months. While the current increase in quota has provided relief, demand is expected to pick up again as buyers return to showrooms. Additionally, any economic or policy changes affecting vehicle ownership could impact future COE trends.
Conclusion
The February 5 COE bidding exercise saw a significant drop in premiums across most categories, providing some relief to car buyers. However, with market dynamics constantly shifting, it remains to be seen whether COE prices will continue on a downward trend or rebound in the coming months. Buyers are advised to stay updated on future bidding exercises and market trends before making a purchasing decision.
