Certificate of Entitlement (COE) premiums for cars ended higher across the board in the latest tender yesterday on the back of three factors, reported The Straits Times.
First, price cuts after the last tender two weeks ago - which saw premiums plummeting - increased buying interest. Second, a revised Carbon Emission-based Vehicle Scheme (CEVS), announced last month, will see fewer cars qualifying for rebates, and more cars attracting surcharges, when it starts in July. Third, the possibility of the Government holding back a percentage of COEs to flatten the peak-and-trough supply cycle. Such a move could potentially result in thousands of car-owning households no longer being able to own a car.
Singapore Vehicle Traders Association secretary Raymond Tang said Toyota's steep price cuts in response to Mercedes-Benz overtaking it to take the top sales spot in January triggered industry-wide discounts.
Many car dealers were also encouraging consumers to buy ahead of July's revised CEVS, which will see price hikes for several models. For instance, the Volkswagen Jetta will lose its $10,000 carbon rebate from 1st July. Companies are also trying to clear existing stock so as to revise their model lineup in response to the revised scheme.
Mr. Tang said, "The revised CEVS is the biggest factor for the COE increase. At the same time, there is uncertainty over whether the Government will hold back some COEs." As a result, car demand rose, especially for smaller models. The Land Transport Authority received 2,120 bids for Category A COEs (for cars up to 1,600cc and 130bhp), nearly double last month's figure.
