- POSTED: 18 Sep 2013 16:31
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COE premiums rise in all categories at the latest tender, the first since LTA announced a change to the COE system.
SINGAPORE: Certificate of Entitlement premiums increased across the board in the second bidding exercise for September.
This was the first bidding exercise since the government recently tweaked the COE system, introducing a new criterion for Category A cars. From February next year, cars in that category must not have an engine power of more than 130bhp.
At the end of the tender on Wednesday, the COE price for small cars closed at S$83,751 - an increase of S$6,447.
The premium for big cars ended at S$86,239 - up by S$9,139, the biggest rise in the tender.
Open Category COEs, which can be used for any vehicle type but end up mainly for cars, rose S$7,001 to close at S$87,001.
For commercial vehicles, the COE prices inched up by S$2,002 to close at S$76,001.
COEs for motorcycles ended at S$1,703, an increase of S$43.
Industry watchers had expected COE prices to go up after the government tweaked the system last week.
However, what surprised them was the extent of the increase.
COE premiums for bigger cars surged by nearly 12 per cent.
Raymond Tang, honorary secretary of the Singapore Vehicle Traders Association, said: "After February, Cat B will have a big group of cars going in there... from Cat A. So, most of the people are worried that will cause the COE of Cat B to be overcrowded."
COE prices for smaller cars went up by more than 8 per cent.
Car dealers noted that these prices are inching closer to record highs seen earlier this year.
Ron Lim, general manager of Tan Chong Motor, said: "A lot of people are buying into the story that the COE will go up with this tweak. In a way, it is a self-fulfilling prophecy.
“People are rushing in, but with today's rise, hopefully consumers will take a step back and try to digest the situation and ask themselves whether it is a rational thing to do, to rush in like that.
“We are all trending near record high numbers, does it actually make sense or not is a good question."
Industry experts said that whether or not COE prices will continue to soar depends on the amount of car stock left from car dealers affected by the changes. It also depends on how much consumers can digest such price increases.
Car traders still expect car showrooms to continue to be packed in the months ahead.
However, they cautioned that if COE prices are being driven up so high now, a more drastic correction will be needed later.