SINGAPORE: Calls to review the current Certificate of Entitlement (COE) system for motorcycles have cropped up once again as prices hit an all-time high following the latest round of bidding.
On Wednesday, COE premiums for motorcycles closed at S$8,701 - the highest since the COE system started in 1990.
COE prices have been rising since the start of this year, hitting S$8,011 in the previous round of bidding earlier this month, which has led to some people having to delay plans to buy motorcycles.
Hafeezur Rahman, who recently got his Class 2B motorcycle licence, was planning to buy either a new Honda CB150R or a second-hand Yamaha motorcycle.
However, with motorcycle COE prices rising, the 19-year-old student said he does not expect to be able to afford a two-wheeler anytime soon.
“I need to be smart about it because as of now I'm still a student, and I'm not working - so I'm only leveraging on my savings,” he told CNA.
He said that a Yamaha Sniper with a machine value of about S$5,000, would cost him more than S$13,000 given the current COE price - a “ridiculous” amount for an underbone or lightweight motorcycle.
“And this isn’t including road tax and insurance premiums,” said Mr Hafeezur.
Another motorcyclist, who gave his name as Mr Hidayat, also said he is putting off plans to upgrade his ride given the current COE prices, as he is currently saving up for his wedding and his own flat.
The 27-year-old, who currently rides a Yamaha FZS V3, said he hopes prices will fall into the “more affordable” range of between S$2,000 and S$4,000 in a few years.
Singapore Motor Cycle Trade Association president Rex Tan said it is “quite puzzling” how motorcycle COE prices have increased despite a higher supply of certificates available for the current May to July period.
Though the monthly supply of COEs for other vehicle categories have seen a decrease, the quota for motorcycle COEs for the current three-month period has increased to 1,228 - a 13 per cent increase from the February to April stretch.
Mr Tan, who is also the director of dealership Ban Hock Hin, suggested the higher prices could be in anticipation of another “circuit breaker”, when COE bidding was suspended for three months last year.
This is especially given the current spike in COVID-19 cases and the subsequent implementation of greater restrictions under the current Phase 2 (Heightened Alert) period.
COE premiums spiked significantly when bidding reopened then, he noted, with the prices for motorcycles jumping from S$4,489 for the second round of bidding in March 2020 to S$7,702 for the first round of bidding in July.
Mr Tan said he expects demand for motorcycles to be high due to an increase in demand for food delivery services amid the current COVID-19 restrictions, which include a ban on dining-in at eateries.
REVIEWING THE SYSTEM
Motorcycle rider Mr Hidayat suggested the COE system could be reviewed, with premiums capped at a percentage of the price of the vehicle.
COEs for motorcycles could also be separated into different categories based on the size of the vehicle, as is currently the case for cars, he said.
Mr Nicholas Wong, the general manager of Honda motorcycle distributor Boon Siew Singapore, points to the discrepancies between car and motorcycle COEs.
While the deposit for COEs for all other vehicles stands at S$10,000, for motorcycles the deposit is just S$200.
Mr Wong said that bidders are able to put in bids for as many motorcycle COEs as they want and stockpile them.
This means those hoarding motorcycle COEs face little risk if demand does not meet supply, as they will lose only S$200 per certificate should they expire.
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Buyers are put at a disadvantage as they are forced to accept higher prices, said Mr Wong, noting an easy way to prevent such speculation would be to increase the COE deposit for motorcycles.
An online petition on Change.org titled Appeal to Review and Increase Cat D (Motorcycle) COE Forfeit Penalty has garnered more than 700 signatures as of Thursday evening.
It called on the Land Transport Authority and the Ministry of Transport to increase the forfeitable deposit for motorcycle COEs from the current S$200 to either $1,500 or $2,000.
The petition argues that with the COE premium forming part of the total purchase price of a motorcycle, higher prices translate into higher loan quantums, with traders standing to earn more at the expense of consumers.
Mr Wong noted the issue of reviewing the COE system for motorcycles has been raised many times over the years but to no avail.
In January, Potong Pasir Member of Parliament Sitoh Yih Pin asked in Parliament if there were plans to re-evaluate the motorcycle COE regime to address the high prices.
Former Minister for Transport Ong Ye Kung replied then that almost 90 per cent of temporary COEs - which are valid for six months - that were obtained in July 2020 had been used to register a motorcycle as of Dec 1.
This suggested a “genuine demand” for motorcycle COEs, not based on “speculative or manipulative bidding”, he said.
“We are mindful that many lower-income Singaporeans require a motorcycle to go about their work. That is why the bid deposit is set lower at S$200 for Category D COEs,” Mr Ong said.
Raising the S$200 bid deposit would raise costs for dealers, which could translate into higher prices for buyers, he said, noting then that motorcycles are subject to much lower additional registration fees, road tax and electronic road pricing charges compared to cars.
Additional reporting by Nadhir Mokhtar.