The Certificate of Entitlement (COE) tender on 5th August 2020 saw prices rising all across the board for all vehicle categories. This has been the third bid since bidding exercises resumed in July.
|Category||July 2020 COE Price (SGD)||August 2020 COE Price (SGD)||Overall Changes|
|A (CAR UP TO 1600CC & 97KW)||32,699||33,000||^ 0.9%|
|B (CAR ABOVE 1600CC OR 97KW)||35,001||37,102||^ 6%|
|C (GOODS VEHICLE & BUS)||23,888||24,100||^ 0.89%|
|E (OPEN-ALL EXCEPT MOTORCYCLE)||35,001||36,502||^ 4.3%|
(Related Story: COE Bidding Results: July Analysis (Second Tender))
Category A closed at $33,000, with a $301 increase over the previous round with 2047 bids received.
Category B closed at $37,102, a $2,101 increase over the previous round with 1985 bids received.
Category C closed at $24,100, a $212 increase over the previous round, with 658 bids received.
Category E closed at $36,502, which is $1,501 higher than the previous round, with a total of 784 bids received.
In the previous bidding exercise, COE prices have increased across all 5 categories, much to the surprise of automotive industry analysts and experts alike. Traders speculated that the increase was due to a backlog of demand.
In this bidding exercise, COE prices were higher all across the range of categories, unlike the previous bidding exercises which saw decreases in prices for Category A, B and C.
Despite the lower number of bids received, there were lower quotas for most categories except for Category E. This all-round rise in prices can be attributed to the lower quotas as compared to July’s second bidding exercise, with only 3,252 successful bids compared to previous 4,390 successful bids.
FUTURE COE PREDICTIONS
Despite the increase in COE prices, car dealers remain optimistic about the market. Given the number of cars that have been stocked up at dealerships during the suspension of COE bidding, customers are still waiting on their cars to be delivered.
“Based on the recent bidding results, I am confident that there is still a high market demand in spite of the novel coronavirus (COVID-19) pandemic. Furthermore, we continue to receive numerous backlogs and new orders from dealers. Besides, there will be a decrease in quotas available for the upcoming months. Therefore, I predict that COE prices will either maintain or increase gradually.” said Eugene Yeo, the Sales Director of QiFei Auto
While price increases may deter some Singaporeans, the majority are still eager and willing to buy a car.
“During the circuit breaker, Singaporeans were unable to buy cars because of the temporary showroom closures, so it’s no surprise that the COE prices have been increasing. When people are left waiting and their 10 years are up, they would want to buy a new car as soon as possible. Now that the COE bidding exercise has resumed, it’s basically a free-for-all. Hence, I expect it to continue rising for another one to three more bids, nothing out of our expectation.” explained Jeremy Tan, Sales Consultant at Initial Auto.
Additionally, some dealers have expected the surge in prices prior to this current round of bidding.
“Before the COE bidding results were released, the prices were already going up. Given that the quotas were lower than last month’s, people have been more eager to secure a bid, hence the jump in prices.” Asaph Leh, Senior Sales Manager at Cars & Stars added.
BUYING A CAR DURING COVID-19
Despite the uncertainty and fluctuating COE prices, there is no foolproof way to accurately predict these price changes. From our observations, we can infer that Singapore’s car market will continue to thrive. And with the three-month suspension of bids, there may be a resurgence of higher quotas in the months to come.
As compared to public buses and trains, having a personal car is a much safer option to commute during this pandemic. While having your own personal space when travelling is a luxury, now more than ever Singaporeans would prefer to distance themselves from others on their ride.
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