In a surprising turn of events, Certificate of Entitlement (COE) premiums across all categories witnessed a notable decline in the tender exercise held on Jan. 4, 2024. This development brings a breath of relief to prospective car buyers and industry enthusiasts alike.
Decrease in Category A and B COE Premiums
COE premiums for Category A and B experienced a substantial drop, reaching their lowest levels since February 2022 and January 2022, respectively. The decrease in premiums is a welcomed shift, indicating potential advantages for those eyeing smaller, less powerful cars (up to 1,600cc and 130bhp) and larger, more powerful vehicles (above 1,600cc or 130bhp).
Cat A: Significant Plummet in Premiums
For Category A, which encompasses smaller vehicles and electric cars with up to 110 kilowatts of power, the COE premium plummeted to S$65,010. This marks a remarkable 23.5 per cent decrease from the S$85,000 recorded just two weeks ago in the tender exercise on Dec. 20, 2023.
Cat B: Substantial Reduction in Premiums
Category B, catering to larger vehicles and electric cars with more than 110 kilowatts of power, witnessed its premium drop to S$85,010. This reflects a notable 22.7 per cent decline from the previous round’s premium of S$110,001.
Other Categories Witness Adjustments
Apart from Categories A and B, other COE categories also experienced adjustments in their premiums during this latest round.
Open Category: A Favorable Decrease
The premium for the open category COE price stands at S$106,388, presenting a 10 per cent reduction from the S$118,388 premium set in the previous tender. This decrease is likely to capture the attention of a broader range of buyers.
Commercial Vehicle COE: Slight Dip
The commercial vehicle COE premium saw a modest decline of 2.63 per cent, shifting from S$69,423 to S$67,599. While not as dramatic as other categories, this reduction still contributes to an overall positive trend.
Motorcycle COE: Incremental Increase
In contrast, the motorcycle COE premium increased by 1.24 per cent, reaching S$9,114 from its previous value of S$9,002. This minor uptick suggests a nuanced market response.
Background and Future Outlook
The backdrop to these changes lies in the record-high COE premiums observed in October 2023, particularly in Category B, where the premium reached an unprecedented S$150,001, and the Open Category premium peaked at S$158,004.
Despite the fluctuations, Singapore’s commitment to a zero-vehicle growth policy remains steadfast. To address current supply challenges, more COE quotas will be expedited from peak years, with a significant increase expected in the second half of 2024. Acting Minister for Transport Chee Hong Tat emphasized this strategy in Parliament on Nov. 6, foreseeing a substantial surge in COE supply for Categories A, B, and Open from 2026 to 2027.
In conclusion, the recent dip in COE premiums brings a promising outlook for the automotive market in Singapore. As the landscape evolves, prospective buyers can anticipate more favorable conditions in the coming years