Certificate of Entitlement (COE) premiums have surged across all categories in the latest tender exercise on 4 September 2024. The premiums for smaller cars, larger vehicles, motorcycles, and commercial vehicles have all seen notable increases, reflecting a broader trend in the market.
## 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 significant rise in premiums, which could impact consumer behaviour and the automotive market.
## 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, has risen to S$96,490. This marks a 2.8 per cent increase from the previous tender’s S$93,900. The rise in premiums for this category suggests a growing demand for smaller, more efficient vehicles.
## 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 has increased to S$106,300. This is a 0.4 per cent rise from the previous S$105,889. The slight increase in this category indicates a steady demand for high-performance vehicles.
## Open category
The open category COE, which can be used to register any vehicle type excluding motorcycles but is predominantly used for larger cars, saw its premium rise to S$106,901. This is a 0.8 per cent increase from the previous S$106,001. The open category’s flexibility often makes it a barometer for overall market trends.
## Motorcycles and commercial vehicles
The motorcycle COE premium has also seen a significant rise, ending at S$9,801, which is a 5.3 per cent increase from the previous S$9,310. Meanwhile, the commercial vehicle COE premium increased by 2.2 per cent, from S$72,400 to S$74,001. These increases reflect broader market dynamics and the ongoing demand for both personal and commercial transportation options.
## Market implications
The rise in COE premiums across all categories could have several implications. Higher premiums may deter some potential buyers, leading to a slowdown in vehicle sales. However, it could also push consumers towards more affordable or alternative transportation options, such as public transport or car-sharing services. Additionally, the increase in premiums for commercial vehicles could impact logistics and delivery services, potentially leading to higher costs for goods and services.
## Future outlook
Looking ahead, the trend of rising COE premiums may continue if demand remains strong and the supply of certificates remains limited. This could further influence consumer behaviour and the automotive market in Singapore. Policymakers and industry stakeholders will need to monitor these trends closely to ensure a balanced and sustainable transportation ecosystem.
