The second Certificate of Entitlement (COE) tender on 20th January 2021 saw an increase across all categories. The highest recorded increase was for Category C of 13.26%, followed by Category A with a 6.88% increase. The COE bidding for January 2021 eventually closed with increased PQP for Categories A, B, and C ($38,137, $42,683, and $32,799 respectively).
COE Bidding Results January 2021 (Second Tender)
(Related Story: COE Bidding Results: January First Tender Analysis)
Category A closed at $43,501, a $2,595 increase over the previous round with 1,309 bids received.
Category B closed at $50,100, which is an increase of $1,099 over the previous round with 1,338 bids received.
Category C closed at $40,999, with an increase of $5,099 over the previous round, with 671 bids received.
Category E closed at $51,900, which is a $2,411 increase from the previous round, with a total of 705 bids received.
January 2021 COE Analysis
As expected, Category C had the largest change in COE price in January 2021. This is likely due to the upcoming Commercial Vehicle Emissions Scheme (CVES) slated to begin in April. This is in addition to the recent changes in the Vehicle Emissions Scheme (VES) in Singapore. The CVES will bring surcharges for vehicles registered after March that fall in the lower categories of up to $30,000. As such, many business owners are purchasing commercial vehicles to avoid being impacted by the CVES surcharges.
Additionally, the increase across all categories was anticipated with the recent announcement in a dip of COE quota from February. In order to secure COEs at lower prices, it is likely that car buyers and dealers are snapping up COEs before the quota decrease. This is because a decrease in quota would increase the gap in demand and supply for COEs, thereby inflating prices.
We can also attribute the increase to the pre-Chinese New Year (CNY) rush. With the festive season around the corner, dealers are attempting to clear old stocks so they can bring in new ones just in time for CNY. As such, we see a drastic increase in COE prices across all categories compared to the previous round.
Future COE Prediction
Upon reaching out to multiple dealers for their opinions on the future of COE prices, the majority have agreed that we can anticipate a further increase in the upcoming COE tenders. At the moment, there are many dealers trying to bid for the COE before the smaller quota starts next month, hence COE prices have increased from the previous bidding exercise. On top of that, there are a lot of outstanding cars yet to be delivered and dealers are trying their best to meet their customers’ expectations, so that could be another factor for the increase in COE prices.
Some have also speculated that it coincides with the CNY festivities and Singaporeans are spending their 2020 bonuses on cars. Therefore, newer models like the BMW 5 Series, Hyundai Elantra and Mercedes E-class would probably stoke buying interest further.
As the CVES scheme implementation date inches closer, we can expect drastic changes to Category C vehicles in the coming months. Coupled with the decrease in COE quota between February and April, it is likely that prices will only continue to rise. Furthermore, car buyers are banking on festive specials, promotions and/or limited-time offers from Parallel Importers and Authorised dealers with CNY approaching. Thus, we foresee an increase in demand from consumers too over the next two rounds of COE bidding.