Slight decline in COE prices signals market stabilization after recent sales events.
The latest Certificate of Entitlement (COE) tender exercise, held on October 23, 2024, saw a slight drop in COE premiums across all categories. This is the first time since June that prices have dipped across the board.
The premium for Category A COEs, which cover smaller cars and electric vehicles (EVs), decreased by 0.9%, ending at $102,900, compared to $103,799 in the previous exercise on October 9. Category B, for larger and more powerful cars, saw a 1.8% decline, with the premium now at $113,890, down from $116,002.
For Category E COEs, which can be used for any vehicle other than motorcycles, the premium dropped by 1.1%, from $116,000 to $114,700. Category C, for commercial vehicles, saw the most significant decline of 2.8%, with its premium falling from $75,009 to $72,939. The motorcycle category (Category D) also saw a drop, with premiums falling by 4.1%, from $10,001 to $9,589.
This overall decline comes after the Land Transport Authority’s announcement on October 4 that the number of COEs available for bidding between November 2024 and January 2025 would increase by 3.6%, to a total of 15,834 certificates. This increase in supply is likely to have contributed to the drop in premiums.
Motor dealers have characterized the decline as a “stabilisation” of prices, noting that the drop is not significant. While premiums have not yet returned to the levels seen before the recent car sales event, The Car Expo, which took place on October 5 and 6, they have inched closer to the “normal” levels observed in the September 18 tender, before the price spikes caused by the longer three-week gap between exercises.
Industry professionals like Sabrina Sng, Managing Director at Wearnes Automotive, expect the slight drop to be a natural response to the lull in sales following large-scale car sales events. However, the strong underlying demand for COEs remains, with Category A and B premiums still higher than before the price hikes from previous tenders. Sng also noted that the recent new car launches have kept demand steady. The stabilisation in premiums could signal that the current COE prices, at around $100,000 for Category A and $110,000 for Category B, may become the “new norm,” potentially leading to more business for showrooms in the coming months.
