The latest Certificate of Entitlement (COE) tender on 21st October 2020 saw prices increasing marginally for Categories A, B and C, with a marginal decrease in Category E prices, which is also the last round of bidding before the next three-month quota commences in November.
(Related Story: COE Bidding Results: October Analysis (First Tender))
Category A closed at $37,334, which is an increase of $800 over the previous round with 1,323 bids received.
Category B closed at $40,990, which is an increase of $300 over the previous round with 1,272 bids received.
Category C closed at $33,778, with an increase of $689 over the previous round, with 538 bids received.
Category E closed at $39,889, which is a $412 decrease over the previous round, with a total of 672 bids received.
This second round of October bids is relatively similar to the bid prices on the 7 th October, with marginal differences for all categories. The number of bids received has also remained relatively similar. As expected, Category C prices have increased, settling in at $33,778 which is an all-time high for 2020. This follows the increasing trend of Cat C prices in the last two months.
We may expect to see minor increases in Category A prices in the coming months, due to the lowered quota for November 2020 to January 2021. However, Category B prices may take a dip due to the increased quota available. Category E prices are on a decline too, and we may expect lowered prices in the coming months too.
FUTURE COE PREDICTIONS
Despite the slight increase in prices, Jason Lee, Sales Associate of Kart Motor claims the results doesn’t necessarily represent an increase in demand. Based on the figures referenced from July till August, demands were at the high side of 2,000+ bids. However, since the start of October, it has maintained a steady range between 1,500 to 1,700 and dropped to 1,200+ bids received this round.
Judging from the second bidding round in October, Lee deduced that there could be a case of more people renewing their COEs, as opposed to purchasing new cars, because the Prevailing Quota Premiums (PQP) came from existing quotas. He added that with lesser people scraping their cars, the lesser the quotas will be issued. Regardless, Lee believes it is still good news for used car dealers.
“I personally anticipated the COE demand to drop at year-end earlier this year and it has coincided with my hunch. So, I have advised my partners that we will slow down in acquiring used cars, especially those with high COEs, periods from 2011 till 2015. And also to selectively invest in 2016 till 2018 cars so that when the demand slows, we will not be affected that drastically.” he explained.
Similarly, Errick Yap, Co-founder of Performance Cars, agrees that COE prices should see a gradual decrease from December. Yap reckons that with slow economic growth, the numbers would eventually go down.
CONCLUSION: THE FUTURE OF COE PRICES FOR END 2020
The reveal of November 2020 to January 2021 COE quotas last month may stir some debate about the future of prices in the coming months. But whether you are thinking of getting a new or used car, visit our marketplace at UCARS, where we promise you can enjoy the best deals!