Open category COE price hits record S$118,001 in first exercise since tax hike affecting luxury cars
SINGAPORE — Certificate of Entitlement (COE) premiums for the open category hit a record S$118,001 in the latest COE bidding exercise on Wednesday (Feb 22), with premiums also closing higher across the board in other categories.
The spike in the price of the open category COE, which can be used for any vehicle type but is mostly used for large cars, follows an increase in Additional Registration Fee (ARF) announced in Budget 2023 on Feb 14, mainly affecting high-end cars.
The open category COE premiums rose from S$105,002 in the last COE exercise and surpassed the previous record price of S$116,557 set in November 2022.
After the ARF changes were announced, analysts had said they did not expect the tax hike to dampen demand for high-end cars, as these wealthier car buyers tend to be less price-sensitive in making vehicle purchases.
In the latest exercise, COE price for Category C, which includes goods vehicles and buses, also hit a record high of S$87,790, up from S$85,119 in the last exercise.
For Category A cars, those with engine capacity of up to 1,600cc and maximum power output up to 130bhp, bidding closed at S$86,556, a slight increase from S$86,000.
Premiums for the higher-powered Category B cars also rose to S$115,001, up from S$105,524.
Motorcycle premiums closed higher at S$12,189, an increase from S$11,602.
In total, 2,591 bids were received for this bidding exercise for a quota of 1,602 available COEs.
FIRST COE EXERCISE SINCE ARF CHANGES
The latest COE exercise was the first time the new additional registration fee (ARF) structure and preferential ARF rebate came into force.
The ARF is a tax imposed when one registers a vehicle, and is calculated based on a percentage of the vehicle’s Open Market Value.
Deputy Prime Minister and Finance Minister Lawrence Wong had said during the Budget speech earlier this month that there was room to make vehicle taxes more progressive, to “better differentiate between the higher-end cars” and mass market cars, and also to “tax luxury cars at a higher rate”.
For cars with the highest Open Market Value (OMV), ARF will be charged at 320 per cent on the amount in excess of S$80,000, up from 220 per cent.
Preferential ARF rebates, designed to encourage car and taxi owners to deregister their cars early, currently pegged as a percentage of the payable ARF, will also be capped at S$60,000.
This is to avoid providing excessive rebates to more expensive cars when they are deregistered, Mr Wong added.
“These changes are expected to affect the top one-third of cars by OMV. Buyers of cars with an OMV of S$40,000 or less will be unaffected,” he added.
NUMBERS AT A GLANCE
Category A (Cars up to 1600cc & 97kW or fully electric cars with output of up to 110kW): S$86,556 (up from S$86,000)
Category B (Cars above 1600cc or 97kW or fully electric cars with output over 110kW): S$115,001 (up from S$105,524)
Category C (Goods vehicles and buses): S$87,790 (up from S$85,119)
Category D (Motorcycles): S$12,189 (up from S$11,602)
Category E (Open category): S$118,001 (down from S$105,002)
