COE premiums climb in September
In the most recent 23 September COE bidding exercise, COE premiums increased for Cat A and Cat E, while premiums fell slightly for Cat B compared to the first bidding round in September. Across the board, however, COE prices have all gone up compared to August.
Premiums for Cat A, for cars up to 1,600cc in engine capacity and with an output of no more than 130bhp, increased by $738 (2.0%) and ended at $38,504 this bidding round. Cat A premiums have risen for four consecutive bidding sessions, and now stand at 19.3% above the 12-month trailing average.
In Cat E, the open category, premiums increased by $211 (0.5%), closing at $41,001.
According to Nicholas Wong, General Manager of Kah Motor, "There were higher than usual total bids in the past couple of months, but these numbers are dropping steadily due to fulfilment of orders and cancellation for some dealers. New orders have not increased since then."
COE supply projected to increase by 8% for Nov-2020 to Jan-2021 period
For Cat A, COE supply is projected to increase 1% from the monthly average of 1,967. For Cat B, COE supply is projected to increase by 17% from the monthly average of 1,729. For Cat E, COE supply is projected to increase by 8% from a monthly average of 903.
Mr. Wong added, "Deregistration has picked up compared to the previous quarter, and this could be a sign that we will be getting a slightly bigger quota in November."
While the COE supply is expected to increase slightly for the upcoming quarter, the continued outpacing of bids compared to the available quota will likely see COE premiums continue in its upward trend.
New car buying interest falls
Alvin Khoo, 41, Musician, tells us, "I was in the market for a new car before COVID-19 hit. However, with these uncertain times, I don't know if I'll even have a job in the next month. Holding back on big ticket items like a car purchase is what I'm going to do for quite a long time to come."
Jonathan Tan, 33, Marketing Assistant Manager at a healthcare firm, also tells us, "The new car market is pretty exciting with a whole slew of different models available to choose from. I believe that it's a buyer's market now because of just how competitive it is out there. But my reservations remain the same, with cost of COE the biggest reason for taking a 'wait and see' approach."
If this suppressed consumer interest continues, it will place some downward pressure on COE premiums across the board.
Minimal new car price adjustments amongst dealers
More than 60% of dealers, including brands such as BMW, Hyundai and Mazda, did not adjust their new car prices for both Cat A and Cat B models.
Some other dealers did make some price adjustments. Kia and Renault increased prices for Cat A cars by $1,000, while Nissan and Subaru increased Cat B car prices by $1,000 and $4,000 respectively. Only MINI reduced the prices of its Cat B cars by $1,000.
This article was updated on 29 Sep 2022.
