Car dealers see swell in visitors after drop in COE premiums
Visitors viewing cars at a CarTimes showroom. Some car dealers have seen up to a three-fold rise in sales and queries after the latest COE bidding exercise. Photo: Don Wong/TODAY
Singapore — It was a fruitful weekend for car dealers looking to cash in on the recent plunge in Certificate of Entitlement (COE) premiums, with some experiencing up to a three-fold increase in sales and queries following the latest bidding exercise.
With the Category A premium (for cars up to 1,600cc and 97kW) diving below S$45,002, down from S$54,301 and its lowest since May 2011, dealers have swiftly reduced prices by as much as S$12,000 to sweeten the deal.
Dealers of popular models such as the Honda Vezel, Toyota Harrier, Toyota Sienta and various Nissan models have slashed prices between S$5,000 and S$7,000 for Cat A cars, while Suzuki Singapore advertised a price cut of up to S$12,000 over the weekend.
Other incentives thrown in include free servicing, unlimited mileage warranty, and petrol and insurance subsidies. In comparison, in Category B, where COE premiums dipped 0.15 per cent to S$54,920, prices remained stable as buyers in this category were “less price sensitive”, dealers said.
CarTimes Automobile managing director Eddie Loo told TODAY he expects dealers to continue dangling carrots in the next few weeks leading up to Chinese New Year. “It’ll be competitive, but I don’t think any of the dealers will lose money because the buyers are coming in,” said Mr Loo, who added that his company sold more than 30 cars over the weekend, compared with one or two per day, on average, before the recent bidding exercise.
Although he expects COE prices to rebound by about S$3,000 in the next cycle, Mr Loo anticipates an industry revival this year as the number of vehicles due for deregistration grows and premiums continue to head south in the long run.
Agreeing, Yong Lee Seng Motor director Raymond Tang said the “heavy showroom traffic” this weekend could signal an industry turnaround.
“There were so many people running in — I’ve never seen such a crowd in so many years. The car parks are fully packed,” said Mr Tang, who reported a surge in orders of up to 15 per cent for both new and used cars.
Abwin Car director Andy Tan reported selling slightly under 20 cars, or about thrice the number last weekend. He said a two-day carnival by Wheel Deal at Automobile Megamart, where his company is housed, also helped draw a crowd. When TODAY visited the megamart today (Jan 10), various dealerships were packed, with 60 to 70 people seen. Showrooms along Leng Kee Road were relatively quieter, but still saw about 30 people.
Several visitors said, however, that they were merely window shopping and are anticipating premiums to fall further before making their purchase.
For instance, Mr Richard Yeo, 48, said he is waiting for premiums to dip to around S$40,000, which he deemed to be a “more comfortable price”.
Another prospective buyer, whose car is due to be scrapped by May, said he was waiting to see if COE premiums will drop further after the new quarterly COE quota is announced soon. “I don’t have much time left, but I’ll shop around first and make a decision next month,” he said.
Leco Auto’s senior sales consultant Josephine Lim said the surge in queries may not necessarily translate into purchases. “The crowd’s there, but some people are just here to take a look. Some (other) dealers may also take non-guaranteed packages, which means the purchase is conditional on whether they’re successful at bidding for COEs at a certain (premium) level,” she said.
