Car COE premiums surge over 20% in COE price rebound

SINGAPORE: On Wednesday (17 Jan), during the second bidding exercise of the year, Certificate of Entitlement (COE) premiums experienced a

Premiums for Category A cars, defined as those with engine capacities of 1,600cc and below and horsepower not exceeding 130bhp, closed at S$81,589 (US$60,690).

This marked a significant increase of 22.6% from S$65,010 in the previous exercise.

There was a substantial increase in the premium for Category B COEs, designated for larger and more powerful vehicle models, as it surged by nearly S$27,000 from the previous tender’s S$85,010 to S$112,000.

The Open category COE witnessed a 2.5% rise, closing at S$109,004, which was higher than the preceding value of $106,388.

In the Commercial COE segment, the premium experienced a marginal uptick of 0.6%, moving from S$67,599 to S$68,001.

Similarly, the Motorcycle COE premium saw a 2.1% increase, climbing from S$9,114 to S$9,309.

The COE quota for the November 2023 to January 2024 quarter saw an increment compared to the previous quarter, resulting in a total supply of 14,388 COEs.

Singapore LTA increases COE supply to combat record-high vehicle premiums

In early November last year, the Land Transport Authority (LTA) announced an increase in the supply of COEs, which are essential for vehicle ownership in Singapore.

An additional 1,614 COEs were said to be introduced into the pool from November 2023 to January 2024. This is on top of the reallocation of 1,895 COEs for smaller and larger cars from the guaranteed deregistrations.

The biggest boost is in the category for larger cars, with engines above 1,600cc or 130bhp, and electric vehicles (EVs) above 110kW, which will see an increase of 863 COEs. This is a 22.4 per cent increase, raising the total to 3,800 COEs available for this category.

For smaller cars and EVs with a power output of up to 110kW, there will be an additional 546 COEs, an 11 per cent increase leading to a total of 5,513 COEs.

Commercial vehicles will also see a boost with an additional 205 COEs, taking their total to 1,129 for the November to January period.

The LTA stated, “Potential buyers may want to take note that the COE quota for Categories A, B, and C will continue to increase in 2024 before reaching the peak supply period from 2025, while Category D quota in 2024 is expected to remain comparable to 2023’s.”

Responding to questions filed by Members of Parliament on 6 November, Acting Minister for Transport Chee Hong Tat emphasized the intention to reduce the peak-to-trough ratio by using a ‘cut-and-fill’ approach, which aims to alleviate supply fluctuations while still adhering to Singapore’s zero-vehicle growth policy.

Singapore’s zero-growth policy, designed to manage traffic congestion, bases the number of available COEs for bidding on the number of deregistered vehicles.