The Land Transport Authority (LTA) has recently announced the COE quota that will be made available for the upcoming May to July quarter. A combined 16,101 COEs across all categories will be made available during the May to July bidding sessions, averaging 5,334 COEs per month.
This May to July quarter sees an 8.1% drop in COEs compared to the quotas from February to April’s allocation. Comparatively, the COE quotas for February to April’s quarter was 17,511, which is a 12.2% decrease from the earlier quarter back in January. As such, this current drop is considerably minor. Nevertheless, COE prices may still be relatively high for the next bidding.
Here are the percentages for the new number of available quotas compared to the period ranging from August to October;
- COE quota for Cat A for May to Jul vs Feb to Apr 2021: -6.17%
- COE quota for Cat B for May to Jul vs Feb to Apr 2021: -14.1%
- COE quota for Cat C for May to Jul vs Feb to Apr 2021: -38.6%
- COE quota for Cat D for May to Jul vs Feb to Apr 2021: +13.4%
- COE quota for Cat E for May to Jul vs Feb to Apr 2021: -12.7%
- Overall average COE Quota for all categories: -8.6%
The overall dip is likely due to the lack of COEs in the market. There is still some surplus from the bidding exercises that were suspended in April, May and June of 2020 during the Covid-19 circuit breaker period. A total of 19,490 unused COEs were accumulated during that suspension.
One-third of the COEs had been returned for bidding from July 2020 to September 2020, and it was earlier announced that the remaining two-thirds will be returned from October 2020 to June 2021.
To distribute the last 2,890 COEs more evenly, the LTA will redistribute these quotas over three months from May to July 2021, instead of May and June 2021. All accumulated COEs will be returned by July 2021. This could potentially decrease the prices of COEs as the supply is increased.
People looking for vehicles in both category A and category B would likely have to pay an above-average price for their vehicles as the redistributed COEs lightens the high prices of the current bid.
For companies or individuals looking to buy commercial or good vehicles as LTA has made provision for 0.25% per annum growth based on the Category C vehicle population as of 31 December 2020. COE prices are likely to decrease but the Commercial Vehicles Emission Scheme (CEVS) may also set an unpredicted change to Category C COEs prices.
Category D quota increased the most at 13.4%, meaning buyers would get to enjoy lower COE prices. Category E prices would follow Category B closely as their quote and COE bidding prices are similar in the first April tender.