More COEs available from November

There will be more Certificates of Entitlement (COEs) for the next three-month quota period starting from November - something which is likely to keep premiums at the current low levels.

In its latest quarterly announcement on Thursday, the Land Transport Authority said that there will be 10,046 COEs a month from November to January - up 8.9% from the current monthly supply of 9,225. Car buyers will have 7,181 COEs a month - 3.9% more than now. The number includes Open COEs, which can be used for any vehicle type except motorcycles, but which usually end up being used for cars. Motorcyclists will get the biggest increase, with their quota expanding by 34.7% to 2,207 a month.

Motor traders attribute the increase in car COE supply to more cars being deregistered. COE supply is determined largely by the number of vehicles taken off the road in the preceding three months. Traders said the premature scrappage of newer cars bought between 2012 and 2016 - when car premiums were as high as $90,000 - was fuelling the quota growth. Now that premiums have plummeted to as low as $25,000, owners of these 'high COE cars' are scrapping them because their annual depreciation is much higher than new cars now.

For motorcycles, the sharp increase in COE supply is likewise driven by a surge in bike deregistrations. This came on the back of a recent government push to encourage riders to get rid of their older, more pollutive motorbikes. These riders were given monetary incentives to scrap their two-wheelers.

For businesses, COE for commercial vehicles will see a 2.4% shrinkage to 658 a month.