Rising COE premiums are making new motorcycles increasingly expensive, prompting owners to keep their ageing bikes.
The Impact of Rising COE Premiums on Motorcycle Ownership
Motorcycle riders in Singapore are increasingly choosing to keep their older bikes rather than purchasing new ones, driven by the steep rise in Certificate of Entitlement (COE) premiums. This trend is highlighted by a significant increase in the number of COE renewals for motorcycles.
In 2023, 2,448 motorcycles had their COEs revalidated for 10 years, surpassing the total number of renewals for the whole of 2022. This figure has already exceeded the 2,262 renewals from the previous year. Similarly, renewals for five-year COEs have also risen, with 2,596 renewals in the first eight months of 2023, nearly matching the 2022 total of 2,992.
The sharp rise in COE prices has made new motorcycles significantly more expensive. In 2023, owners paid between $9,651 and $12,096 to renew their COEs for 10 years, compared to $7,500 to $9,355 in 2021. This has made many owners more reluctant to sell their motorcycles, leading to a decline in ownership transfers.
The Cost of New Motorcycles and Increased Renewals
In September 2023, a Yamaha Nmax 155 without COE was priced at $4,191, but including the COE, the total cost would be approximately $15,000. Given this, it’s often more economical for owners to simply renew the COE for their current motorcycle, provided it’s still in working condition, rather than purchasing a new one.
Smaller motorcycles, especially those with engine capacities of up to 400cc, have seen a higher number of COE renewals, primarily due to their use in food delivery services and basic transport. These motorcycles accounted for 3,798 renewals in 2023, compared to 2,823 in 2021. Many owners of these smaller motorcycles opt for five-year renewals to cut costs, though these COEs cannot be extended beyond five years.
In contrast, motorcycles with engines larger than 400cc are more likely to have 10-year renewals, as seen in the renewal of 1,110 motorcycles of this type in 2023.
Increased Motorcycle Prices and Fewer Transactions
The combination of rising COE premiums and fewer new COEs available for bidding has led to a reduction in new motorcycle registrations. Between January and September 2023, 8,991 new motorcycles were registered, which is 2.4% fewer than the previous year. Similarly, the used motorcycle market has seen a decline in transactions, with 41,804 ownership transfers in 2023, down from 57,572 in 2022.
These changes have also driven up the prices of used motorcycles, making them more expensive than in previous years. For example, a three-year-old Yamaha Aerox 155, previously priced at around $8,500 in 2020, now sells for around $11,000.
The Changing Motorcycle Industry Landscape
Despite the high costs, the motorcycle business continues to see new entrants. Companies such as Bike Choice Singapore and GigaRider have capitalized on the rising demand for motorcycles by offering both new and COE-renewed used bikes. These companies have seen success, with Bike Choice selling 150 motorcycles a month across its three showrooms.
Some dealers are also offering motorcycle leases, especially for those who cannot afford to purchase a new one outright. As costs continue to rise, companies are adjusting by providing long-term rental options to accommodate more customers.
Looking Ahead: The Future of Motorcycle Ownership
For riders like Patrick Tan, who purchased a Sym Cruisym 300 in 2019, the decision to hold on to an aging motorcycle becomes more appealing. Despite the high resale value of his bike, Tan plans to keep it and hopes that by 2029, when his bike reaches the end of its COE period, the cost of a new bike and its COE will be more affordable.
The high COE premiums continue to shape the motorcycle market, leading many riders to retain their older motorcycles for longer, as new bikes become increasingly expensive.
