Large Decreases in COE Premiums
22 July 2015, Singapore – COE premiums have fallen drastically in the second round of July’s COE bidding exercises.
Category A, or what is known as small car COEs, saw a $2,811 drop from the last bid to close at S55,889. This represents the fourth consecutive drop in Cat A prices over the last two months.
Category B premiums for larger and more powerful cars fell by even more, closing at $58,109 or $7392 less than July’s first bid.
Open category COE premiums fell the most, by some $8,900 to close at $60,101. These large drops in COE represent the lowest figures for COE premium prices in 2 years.
The fall in COE prices are largely attributed to the increase in COE quotas in the next few months, as de-registrations increase for cars that reach their 10-year statutory lifespan limit.
The last time Cat A prices were this low was in 2012 February Round 1, where premiums closed at $55,809. This was tagged to a quota of 619 premiums for bidding, as compared to the 1435 available this time, more than double the figure.
Cat B reflected the same trend, where the last time the price was in the in $50,000s was in 2013 March Round 1 with a quota of just 326 as compared to the 930 premiums available now, nearly 3 times more.
Such a trend possibly indicates that underlying demand for cars remains extremely strong, despite a massive spike in the quotas available prices have not fallen by quite the same ratio. Expect to see further decreases in COE premiums however, as the government has already announced an increase in the quotas in the coming months.
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