The first Certificate of Entitlement (COE) tender on 5 May 2021 saw a decrease across most categories, with the exception of Category E prices that rose by a marginal 1.45%.
COE Bidding Results On 5th May 2021 (First Tender)
- Category A closed at $48,002, a $1,639 decrease from the previous round with 1,100 bids received.
- Category B closed at $60,001, a $1,189 decrease from the previous round with 1,244 bids received.
- Category C closed at $43,001, a $1,000 decrease from the previous round with 261 bids received.
- Category E closed at $63,002, a $902 increase over the previous round with 387 bids received.
Despite the marginal drop in prices for Categories A, B and C, prices for this first May tender remain relatively high. Category A and B prices are at their second highest peak since the start of 2021, while Category C prices appear to be declining back toward the sub $40,000 range. On the other hand, Category E prices are on a steady rise since the start of the year, with this tender’s price of $63,001 reaching a new high since the start of 2021, and higher than prices back in 2020.
What The Market Watchers Say
Given the volatility of the COE prices as of late, one can assume that prices could potentially keep on rising. Conversely, we may see a gradual drop as the demand for cars from 2020’s circuit breaker period wanes off. The high prices can also be attributed to the lowered number of cars for deregistration, despite the additional quotas from the circuit breaker suspension.
Comparing this tender’s results with the number of quotas a decade ago in May 2011’s first tender, the quotas for cars in Category A and B are significantly lower than that of the previous quarter of 2011. Looking back at the vehicle quotas in 2011, we foresee a potential drop in prices for Category A as the quotas gradually increase over the months, supplemented by the redistribution efforts. However for Category B, prices may remain highly volatile, with potential increases as there are more CAT B vehicle launches and releases happening as of late.
A director of a used car dealership (who wishes to stay anonymous) foresees a slight gain in the next round of bidding exercises, citing the drop in May’s first tender may be due to the high surge in the previous bid. “The past surging trend in COE has left dealers in a dilemma as to whether or not they should sell cars with guaranteed COEs. The unpredictability of the COE moves like a wave. After a big wave, there will be a withdrawal period before the next wave hits. Hopefully this wave subsides and prices begin to stabilise.”
Mr Jack Fu, Sales Director from Quantum Armour Pte Ltd, shares similar sentiments about the volatility of COE prices. He says, “The prices of COE are too unpredictable, and they directly affect the prices of new cars. Since most customers choose to buy cars with fixed prices, COE included, dealers have to deliver these cars regardless of the rise of COE prices, which in turn reduces the dealer’s profit margin. I think that COE prices in the next half of the year depends on the market trends for cars.”
While prices remain high as of now, we may still hold on to the hope that the surge of prices may subside as the rate of car purchases slow down. On the other hand, the second hand car market is beginning to gain more traction as buyers are constantly looking for alternatives that will get them the most bang for your buck. If you are in the market for a used car, you can head on over to our marketplace, where we have a wide selection of cars from over 300 dealers. You could also check out the new cars we have listed, in the event that COE prices reduce further.