SINGAPORE – In the first Certificate of Entitlement (COE) bidding exercise for December 2021, premiums in Category A, for ‘mainstream’ cars with engines less than 1.6-litres in capacity and output of less than 130hp, rose by S$2,009 to end at S$57,010, making it the highest it has been in six years.
Category B, for cars with engines that make more than 130hp, or are above 1.6-litres in capacity, sae a slight rebound of S$800 to end at S$80,401 after dipping in the last exercise. Compared to the big leaps seen in Cat B over the last couple of months, this round’s increase is rather modest in comparison.
Category E meanwhile, which is open to all vehicles except motorbikes, but usually ends up being used for big cars, continued its gradual dip, falling by S$1,001 to end at S$85,000. It’s still a relatively high figure, but it seems like things are calming down a little here after its peak of S$88,000 during the first bidding exercise in November.
The reasons for the continued high COE premiums have been highlighted pretty much continuously in this column every month. But as a refresher, a tighter quota supply, as announced by the Land Transport Authority (LTA) in November, results in higher prices, given that demand will pretty much always be there in some form of another.
The trends in Cat B and E does bear noticing though. After dramatic jumps over September and October in both categories, it appears that things are starting to calm down a little. Perhaps buyers were spooked by the massive leaps in prices over such a short span of time, and are thus holding back slightly and letting things settle down for a bit.
Where does this go into the new year is anyone’s guess, but our prediction is that it will probably hold steady and hover around this level for a while more, at least until Chinese New Year comes around and everyone rushes out to buy a new car once again.
Cat A however continues to trend upwards, although not quite as dramatically as the other categories. Buyers in this segment tend to be more price-sensitive, so perhaps the rising trend is an indication of an improving sentiment among consumers, given that it appears that Singapore is now on the way towards opening up again on the road to recovery from the pandemic.
With quotas expected to remain low for the considerable future, don’t be surprised if Cat A COE premiums finally breach the S$60,000 barrier, sooner rather than later. But as Derryn surmised the last time round, it’s actually not that high when compared to the heights of Cat B. Although if history is any indication, you’ll never know just how high prices will go from here on out.
This article was first published in Carbuyer.com.sg.