Certificate of Entitlement (COE) premiums have surged across most categories in the latest tender exercise on 18 September 2024. The open category COE hit a record high of S$113,104, marking a significant 5.8 per cent increase from the previous S$106,901. This rise reflects broader trends in the market, affecting various vehicle categories differently.
Background
The COE system in Singapore requires vehicle owners to bid for a certificate before they can register a new vehicle. This system is designed to control the number of vehicles on the road and manage congestion. The latest tender results indicate a general upward trend in COE prices, driven by limited supply and high demand.
Cat A
The COE premium for Category A, which includes smaller, less powerful cars up to 1,600cc and 130bhp, as well as electric vehicles (EVs) with up to 110 kilowatts of power, rose to S$98,524. This represents a 2.1 per cent increase from the S$96,490 recorded at the last tender exercise two weeks ago.
Cat B
For Category B, which covers larger, more powerful cars above 1,600cc or 130bhp, and EVs with more than 110 kilowatts of power, the premium climbed to S$110,001. This is a 3.5 per cent rise from the previous S$106,300 premium set at the last round.
Open category
The open category COE, which can be used to register any vehicle type excluding motorcycles but is predominantly used for larger, more powerful cars, saw the most significant increase. The premium reached S$113,104, a 5.8 per cent jump from the previous S$106,901. This marks the highest price recorded for this category in 2024.
Motorcycle and commercial vehicle premiums
The motorcycle COE premium ended at S$9,900, reflecting a modest 1 per cent increase from S$9,801. Meanwhile, the commercial vehicle COE premium remained relatively stable at S$74,000, just S$1 below the previous premium on 4 September.
Market implications
The rising COE premiums indicate a tightening supply and sustained demand for vehicles in Singapore. According to Mr Loo, a market analyst, “Premiums will go down only when the COE supply is restored, likely in 2024 or 2025.” This suggests that the current high prices may persist until more COEs are made available.
Future outlook
As COE premiums continue to rise, potential vehicle buyers may face increased financial pressure. The government may need to consider measures to balance supply and demand to prevent further price hikes. Additionally, the trend towards higher premiums could influence consumer behaviour, potentially increasing the demand for alternative modes of transport or more fuel-efficient vehicles.
The latest COE tender results underscore the dynamic nature of Singapore’s vehicle market, with significant implications for both consumers and policymakers.
