COE premiums rise across the board

In the most recent 18 November COE bidding exercise, COE premiums increased across the board for all car categories.

Premiums for Cat A, for cars up to 1,600cc in engine capacity and with an output of no more than 130bhp, increased by $1,700 (4.7%) and ended at $37,690 this bidding round. Premiums for the category now stand at 11.9% above the 12-month trailing average.

Premiums for Cat B, for larger cars with more than 130bhp or engine displacements larger than 1,600cc, increased by $1,168 (5.4%) and ended at $41,101, the second highest this year. This climb sees the premium for this bidding round settling into the 85th percentile of the 12-month trailing average, 9.6% higher than the average premiums of the last 12 months.

In Cat E, the open category, premiums rose by $2,003 (5.1%), closing at $41,503, raising them to an all-time high for 2020.

COE supply projected to decrease in the next quota period

Based on statistical forecasting using latest data released by the LTA and adjusting for the return of quota from the suspended April to June bidding exercises, the quota for the upcoming next Feb-2021 to Apr-2021 is expected to decrease by 11% for passenger cars (excluding commercial vehicle and motorbikes). This is extrapolated from the lower vehicle deregistration figures in Oct-2020.

For Cat A, COE supply is projected to decrease by 7% from the monthly average of 1,925. For Cat B, COE supply is projected to decrease by 4% from the monthly average of 2,014. For Cat E, COE supply is projected to decrease by 34% from a monthly average of 926.

Passenger car deregistration in October decreased by 2% compared to September. As a result, monthly passenger car deregistration in October is 7% lower than the monthly average from the past three-month period.

While the COE supply has expanded slightly for this current quarter, the continued outpacing of bids compared to the available quota will likely see COE premiums continue its upward trend.

New car buying interest falls, expected to rebound in December

In November, there has been a drop in showroom enquiries, based on SGCM's monitoring of sales enquiries to new car dealers. Compared to the previous month, sales enquiries in November fell by 10%.

"With the COE on my car set to expire in June 2021, my wife and I have been looking around for a new car for a few months now. However, amidst the uncertainty of the current COVID-19 situation, we're taking our time with deciding on whether or not to get a new car," says 37-year old Sales Manager, Ben Lee.

While new car buying interest in November may have fallen, it is unlikely to place any downward pressure on COE premiums. Demand will likely go up in December, with year-end sales and promotions across most brands expected to drive up car buying interest.

Jack Lee, 31, Assistant Business Development Manager, tells us, "I've had my eye on the new Honda City, and right now I'm waiting to see what year-end sales are available in December. Hopefully, there are good deals to be had, and I will likely take that opportunity to replace my current car."

New car prices increase for most dealers

After the latest COE bidding, new car prices mostly went up across a selected panel of new car dealerships monitored by sgCarMart. With COE premiums going up across the board, a rise in new car prices is to be expected.

For Cat A models, nine dealers increased prices, with brands like Honda, Renault and Volkswagen increasing Cat A model prices by at least $2,000.

For Cat B models, 12 brands increased new car prices, with Kia, Skoda and Toyota all increasing prices by $2,000.

The only brand that did not make any price changes across both Cat A and B was Hyundai.

This article was updated on 29 Sep 2022.