Car buyers can look forward to lower prices in the coming months, on the back of a substantial increase in the certificate of entitlement (COE) quota, reported The Straits Times.
According to figures released by the Land Transport Authority (LTA) yesterday, there will be 11,298 COEs available to car buyers in the February to April period - 23 percent more than in the previous three months, and more than double the supply for the corresponding period last year.
The biggest beneficiaries will be those buying smaller cars, as the supply of Category A COEs (for cars up to 1,600cc and 130bhp) will be 41.3 percent bigger than now.Supply of Category B COEs (for cars above 1,600cc or 130bhp) will increase by nearly 27 percent.
Dr. Park Byung Joon, an urban transport management expert at SIM University, said the new quota should result in lower premiums for Category A 'for sure', and 'a little bit for Category B'. He envisaged Cat A premiums falling by more than 10 percent.
Mr. Ron Lim, General Manager of Nissan agent Tan Chong Motor, noted that the Category A quota is now 'pretty close to the magical number' of 1,000 COEs per tender, which he said would result in a meaningful drop in prices. He added that the enlarged supply is 'timely' because the Singapore Motorshow starting today is likely to lead to higher car sales.
Including certificates of entitlement for commercial vehicles and motorcycles, the February to April quota will have 14,114 COEs. This is 18.3 percent more than the previous three-month quota.
The new quota is the first with a reduced 0.25 percent cap on annual vehicle population growth. The cap has been lowered systematically in recent years - from three percent to 1.5 percent in 2009, then to one percent in 2012, and 0.5 percent in 2013 - as the Government addresses what it deems to be an unsustainable vehicle population growth rate.
The LTA said that the latest quota includes a smaller Open category, which is now made up of 10 percent of COEs from each of the other four categories, instead of the previous 15 percent. This is to address a vehicle population growth pattern that has been skewed in favour of cars.
