Fall in COE premiums for Category A and B after supply increase; Open Category rises to record high

SINGAPORE: Certificate of Entitlement (COE) premiums for Category A and B fell on Wednesday (May 17), in the first bidding exercise under the increased quota for cars in the two categories.

Premiums for Category A, which is for smaller cars, closed at S$92,000 (US$68,490), down 8.9 per cent from S$101,001 in the previous tender.

Premiums for larger and more powerful cars in Category B fell to S$113,034, a 5.3 per cent drop from S$119,399.

Open category COEs, which can be used for any vehicle type but end up being used mainly for large cars, rose to a record S$125,000, from S$124,002. This exceeds the previous high of S$124,501 from the tender that closed on Apr 19.

COEs for commercial vehicles, which include goods vehicles and buses, rose to S$77,501 from S$75,589 in the previous bidding exercise.

Motorcycle premiums rose to S$10,602 - double the closing price of about S$5,000 in the last tender. Prices in this category plunged in the last round, following fresh measures requiring bidders to put down a higher bid deposit and cutting the validity period for motorcycle temporary COEs.

A total of 3,536 bids were received in the latest exercise, with a quota of 1,844 COEs available.

It was announced earlier this month that the COE quota for cars in categories A and B will go up over the next few quarters as the Land Transport Authority (LTA) makes a one-time adjustment to reduce the supply volatility.

For the current quarter from May to July, the COE supply will go up by 24 per cent for Category A. Category B will see a 15 per cent increase.

These COEs are from a pool of guaranteed deregistrations of five-year COEs which are set to expire when supply is higher. LTA will bring them forward to be distributed over the next few quarters.

The move comes on the back of rising COE prices, with premiums for cars topping the S$100,000 mark in recent weeks. 

Transport Minister S Iswaran said in parliament on May 8 that premiums are expected to trend upwards, with Singapore’s policy of zero-growth in the car population and as household incomes rise.