In the latest Certificate of Entitlement (COE) bidding exercise, premiums showed a mixed trend:
- Category A (smaller cars) rebounded with a 4.6% increase, closing at S$94,000 after a significant dip of S$10,000 in the previous round.
- Category B (larger, more powerful cars) continued its downward trend, dipping 2% to S$103,010.
- Category C (commercial vehicles) rose by 1.9% to S$70,289.
- Category D (motorcycles) saw the sharpest drop, falling 9.1% to S$7,878, its lowest since May 2023.
- Open Category (Cat E) premiums, often used for larger cars, decreased by 3.3%, closing at S$104,001.
Key Factors Influencing COE Prices
- Rebound in Category A Prices
- The sharp S$10,000 drop in the previous round spurred demand, with undecided buyers returning to showrooms.
- Interest in newer car models also contributed to the rise.
- Continued Drop in Category B Premiums
- Showroom activity for larger cars remained quiet.
- Prospective buyers are awaiting the impact of the 20,000 additional COEs set to be injected starting February 2025.
- Motorcycle COEs Plummet
- At S$7,878, the motorcycle COE price hit its lowest in over a year, reflecting reduced demand.
Impact of Upcoming COE Injection
The Land Transport Authority (LTA) announced in October that 20,000 additional COEs would be progressively injected from February 2025. This decision was influenced by:
- Improved traffic management: Enabled by the ERP 2.0 system, which optimizes road usage.
- Post-pandemic travel patterns: Increased remote work has reduced overall vehicle mileage.
Transport Minister Chee Hong Tat clarified in Parliament that the injection is not linked to potential distance-based charging, though ERP 2.0 could support such measures in the future.
Dealer Insights and Market Outlook
- Dealers React to Category A Rebound
Mr. Ng Choon Wee of Komoco Motors noted an uptick in sales following the last round’s drop, leading to increased demand. However, he expects weaker buying sentiment during the holiday season. - Category B Buyers Remain Cautious
According to Ms. Corinne Chua of Wearnes Automotive, prospective buyers are waiting for clearer insights on how additional COEs will be distributed. - Potential February Surge
Many buyers may delay purchases until February, potentially triggering a spike in premiums due to increased bidding competition.
COE Trends Moving Forward
The upcoming COE injection and continued adjustments to traffic management policies will significantly shape the market. Buyers are advised to stay informed about future bidding trends, especially as the additional COEs are gradually introduced.
