Certificate of Entitlement (COE) premiums have once again climbed, with smaller cars in Category A hitting a near two-year high in the latest bidding exercise on 20 August. The latest spike underscores ongoing concerns about car affordability in Singapore, where demand continues to outstrip supply despite cooling measures.
For Category A – which covers smaller cars up to 1,600cc and 130bhp, as well as electric vehicles (EVs) producing up to 110kW – premiums closed at S$104,524. This represents a 2.5% increase, or S$2,515 more than the previous round’s S$102,009. The figure now stands just shy of the all-time peak of S$106,000 set in October 2023.
Industry observers note that strong demand for EVs, coupled with limited COE quotas, has kept Cat A premiums consistently high. Families and young professionals seeking entry-level vehicles are particularly affected, as affordability remains a pressing issue in Singapore’s car ownership landscape.
Premiums Rise Across Most Categories
Category B, which includes larger and more powerful cars above 1,600cc or 130bhp, as well as EVs with over 110kW of power, also saw a modest increase. Premiums rose to S$124,400, up S$902 or 0.07% from the previous exercise.
The Open Category – often dominated by premium car buyers and luxury EVs – climbed by 2.2% to S$125,001, up S$2,667 from before. This segment remains one of the most competitive, with buyers willing to pay a premium for flexibility since these certificates can be applied to any vehicle type (excluding motorcycles).
Meanwhile, the motorcycle COE saw some relief, dropping by 4.3% to S$8,809. On the other hand, Category C, covering commercial vehicles such as vans and lorries, rose by 3.1% to S$72,190, reflecting strong demand in the logistics and e-commerce sectors.
What This Means for Singapore Car Buyers
With COE premiums climbing, the overall cost of car ownership in Singapore is set to remain one of the highest in the world. For many middle-income families, the rising premiums could push them towards considering car-sharing services, public transport, or even postponing car ownership altogether.
Financial planners often advise potential buyers to evaluate long-term affordability, factoring in not just the COE but also loan repayments, road tax, fuel, insurance, and maintenance. For those leaning towards EVs, government rebates under the Vehicular Emissions Scheme and EV Early Adoption Incentive could help offset some of the rising costs.
Despite occasional fluctuations, analysts suggest that unless the government releases more COEs into the system, premiums are unlikely to see a sustained drop in the near term.