Strong demand persists for big cars

Just last week, the authorities have assured that no further tweaks will be done to the COE system in the near future. This may have caused car shoppers who have been waiting for premiums to drop to make their purchase before the prices continue to climb. In addition, buyers may have also come to terms with the high COE prices.

These factors could have caused demand for COE to remain strong, and prices to increase across all categories. 

At the end of today's session, premiums for Cat A, for cars up to 1,600cc in displacement and no more than 130bhp, ended at $78,602 - a difference of $1,603 or 2.03 percent.

Cat B COE premiums for larger cars with more than 130bhp or engine displacement larger than 1,600cc, ended 2.64 percent higher - amounting to $2,190 - at $82,900.

The Open Category or Cat E premiums ended at $84,001, with a hike of $2,001 from the previous tender - equivalent to 2.38 percent.

The government's push to tighten the vehicle supply bundled with lower COE premiums and high number of bidders could be possible reasons for the high premiums - and we believe the situation is unlikely to improve for the next few sessions.