PREMIUMS for most Certificates of Entitlement (COEs) rose in the final round of bidding for 2024, with the large car category – B – spiking S$5,990 or 5.8 per cent to S$109,000.
December’s second round of COE bidding also saw the premiums for mainstream cars, the open category, and motorcycles rise as well, with only the commercial vehicle category posting a dip.
Category B is the category for larger or more powerful cars with engines of more than 1,600 cubic centimetres (cc) in capacity or that have more than 97 kilowatts (kW), or for electric vehicles (EVs) with more than 110 kW.
This result marks the category’s first increase in price after four consecutive drops, since October’s second round of bidding when it reached a high for the year at S$116,002. But it steadily dropped to S$103,010 in December’s first round of bidding.
Category E, the open category which can be used to register any type of motor vehicle except for motorcycles, increased by 4.8 per cent or S$4,991 to S$108,992.
Category E is typically used to register vehicles that fall under Category B, as the latter is almost always the most expensive type of COE.
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The price for Category A, for mainstream cars, rose 2.1 per cent or S$2,000 to S$96,000. This category applies to cars that have engines of up to 1,600 cc in capacity or with up to 97 kW of power, or for EVs with up to 110 kW of power.
Prices for Category D, used for motorcycles, increased 6.4 per cent or S$503 to S$8,381. In December’s first round, the category premium dropped to S$7,878, its lowest value for all of 2024.
Prices for Category C, applicable to commercial vehicles and buses, decreased 0.6 per cent or S$399 to S$69,890.
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Industry observers The Business Times spoke to said that the rise in passenger car COE premiums can be attributed to pressure on the part of dealers to register before the end of the year, as well as localised fluctuations in the wake of the government’s announcement of additional 20,000 COEs for 2025.
The general manager for the dealership of a mainstream East Asian brand said: “At this time of the year, a lot of people have targets to meet. While that’s true for the entire year, this is also the last round of bidding for 2024, so competition to get COEs to register cars before Dec 31 is more intense.”
Car brands are in competition with each other to post the best sales each year, and performance is typically derived from the number of cars registered in a calendar year. Registering a car for road use in Singapore requires a COE.
Competition between luxury brands BMW and Mercedes-Benz, which are typically among the top selling brands in the Republic, is the most intense.
Dealer BMW Eurokars Auto, for example, ran a promotion for this round of COE bidding, where it would refund the difference to the customer if the COE premium fell.
“We ran this to help us secure numbers and convince customers who are on the fence,” said Jason Lim, managing director of BMW Eurokars Auto.
The manager said that Category B’s fluctuation of a few thousand dollars is “quite normal” as it is the category for larger, more expensive cars. Dealers have a wider margin on these cars that can be used to obtain COEs.
As dealers are focused on converting orders taken into actual registrations, this also explains why COE prices went up, even though sales have been slower due to a softer market, with many potential customers away from Singapore on holidays.
“Everyone wants to deliver their cars before the end of the year,” said automotive consultant Vincent Ng. He added that the government’s announcement of an additional 20,000 COEs on Oct 29 caused fluctuations in what would otherwise have been a clear downtrend.
With both Category A and B hitting highs for the year in October, he said that such high prices would have already tested buyers’ willingness to spend.
“In the greater picture, 20,000 additional COEs are not that much, spread over all categories and a few years. But there was one round of significant price drop for Category A and now we’re back to craziness already,” he said.
