COE price trend over the past quarter: October to December 2023 vs July to September 2023
The worst is finally over for now, it seems.
Before going into finer detail about what has transpired over the past quarter, let's look at the numbers first. With the spikes and dips averaged out over the October to December period, COE premiums still climbed by 5% for Cat E compared to the previous quarter, whereas Cat B rose by a gentler 1.7%. Conversely, Cat A experienced a not-insignificant 5.7% fall - marking the first quarter-on-quarter decline since October 2021.
But as we wipe the sweat off our brows and heave a collective sigh of relief, it would be remiss to forget the unfathomable heights scaled by COE premiums climbed within the past quarter.
Wind the clock back to late September, where multiple rounds of extra supply injections didn't appear to be alleviating the situation. Then, it finally happened: In late October, premiums in Cat B crossed the $150,000 line, following in the footsteps of the open Cat E (which, concurrently, had risen further to $158,004). Those in Cat A also reached an all-time high of $106,000.
As we all know, however, the situation has since taken a positive turn.
A wider strategy change announced by the government, dubbed the cut-and-fill approach, has brought premiums back down to earth - even appearing to trigger one of the largest absolute falls in history. Consequently, the picture is now the rosiest that it has been in a few quarters: Cat A is at $85,000, Cat B, at $110,001 and Cat E, at $118,388. While these are still not reasonable figures by any measure, it's also worth pointing out that premiums haven't been this 'low' since February.
What's to come next? The rush to lock in orders prior to both the GST-rise and the revision in VES rebates should be subsiding as we step properly into 2024 - but it's still highly possible that we'll see their effects spilling over into the next few bidding rounds. In tandem, yet another sales booster is around the corner: The 2024 Singapore Motor Show, set to hit Suntec Convention Centre next Thursday.
Still, the authorities seem fairly confident that the new tack it has taken to bolster COE supply will help to keep the lid on price increases well into 2025. That brings us to the next section…
Vehicle de-registrations only - there's no telling exactly how much COE supply will increase in February, given the cut-and-fill approach
For the past two-and-a-half years, we've tried to piece a picture together for how COE prices might fare in the coming quarter, by first projecting how supply would change.
LTA's calculation methodology from the outset has never been straightforward; while de-registrations do indeed largely influence the supply pool, the taxi population, and commercial vehicles under the Early Turnover Scheme are also contributing factors. Still, with the right figures put into place, statistical forecasting for the upcoming quarter's supply was feasible, and relatively reliable.
None of that holds anymore (at least not for the foreseeable future) with the cut-and-fill approach.
Whereas keeping pace with the LTA's methodology revisions - and even making logical deductions based on the previous one-time adjustment - still allowed us to conduct some level of meaningful forecasting previously, it is now impossible to know exactly how many COEs the LTA will inject on top of what is being returned to the supply pool by de-registrations.
As such, the only dataset that can give us an indisputable understanding of how the car market has been tracking now come from de-registration figures.
To recap, the LTA currently relies on the moving average of de-registrations over the past year - compared to over the past quarter previously - to determine the baseline supply pool of COEs for the upcoming quarter. This is then added on to the number of COEs taken from the coming years based on the cut-and-fill approach.
By extrapolating data from January to November out across 12 months, numbers indicate that the overall rolling average of de-registrations for the January to December 2023 period will be higher than that in the previous 12-month period (October 2022 to September 2023).
The increase in de-registrations should be led by the passenger car categories, with the figure for Cat A rising 8% from 3,772, and the figure for Cat B rising by a slightly lower 5%, from 2,894 previously.
Conversely, the figure for Cat C (commercial vehicles) is estimated to dip by 10%. De-registrations from all three categories ultimately contribute to the supply pool in the open Cat E.
Without any extra intervention by the LTA, the overall increase in de-registrations is likely to have resulted in a boost to the COE quota in the upcoming quarter.
New car pricing: September to December 2023
Sgcarmart does its best to use a pool of popular models from authorised dealers to analyse the general price trends of new cars.
The cooling off of COE prices appears to be taking effect on car prices on the whole as well. And while some of our dealers have pushed prices back upwards again after they landed at their lowest in November (based on our observations at least), cars now look far less expensive than they did back from July to September.
Based on our sample, there was a significant 6.1% dip in new car prices over the past quarter, when compared to the tri-monthly average between July to September 2023. Worth noting, too, is that this is the first quarter-on-quarter fall we've witnessed since we started tracking prices in 2021.
Interestingly, COE prices actually haven't fallen as sharply during this period - suggesting that dealers may have jumped at the sign of the market's cooling off to draw more customers into showrooms.
For example, the price of a Volkswagen Golf Life Plus was reduced by $20,000 back in late November, while the Cat B-classified Toyota Corolla Cross was listed for $35,000 less in the same period. (Both instances followed the historic COE price fall in November.) For the first time this year, BMW's 116i hatch also no longer costs more than $200,000.
Nonetheless, getting to this point took some time - and also saw prices reaching dizzying heights. The evergreen Toyota Corolla Altis in Elegance trim - our benchmark for family sedans in Singapore - was listed at $178,888 on 19 October 2023.
Most popular used cars: September to November 2023
Over the three-month period between September 2023 to November 2023, these were the five most listed used cars on Sgcarmart.
| Model | Year of registration | Average depreciation (approx.) |
| Honda Vezel 1.5A X | 2016 | $15,921/year |
| Mazda 3 1.5A Sunroof | 2016 | $13,126/year |
| Mercedes-Benz C-Class C180 Avantgarde | 2017 | $22,724/year |
| Honda Civic 1.6A VTi | 2018 | $15,960/year |
| Toyota Corolla Altis 1.6A Elegance | 2016 | $16,175/year |
We would have loved to be proven wrong when we previously suggested that the annual depreciation figure for the 2016-registered Honda Vezel 1.5A X might soon vault across the $16,000 line. But as COE premiums skyrocketed in October, so too did this become a reality in September.
Thankfully, prices appear to have slid slightly across the market in the months since (though one should never grow desensitised to the shock of witnessing such depreciation figures for seven-year old cars).
As at November, the volume of listings still remained high; there were more than 350 listings for the 2016 Honda Vezel, and close to 200 listings for 2016-registered Mazda 3s across the three-month period.
But if we are to trust the government's assurance that COE supply "will continue to increase in 2024 before reaching the peak supply period from 2025", we may see a further cooling off in the new car market yet, and in turn, more palatable used car prices.
Don't forget to check our past three COE analyses below!
Oct '23: COE quota forecast to remain level come November
COE Analysis July '23: COE supply forecast to rise in August
