SINGAPORE: A Surge in COE Prices!

In a stunning turn of events, Singapore's Certificate of Entitlement (COE) premiums have skyrocketed, marking a record high. On September 17, COE prices for smaller vehicles in Category A surged to an eye-watering S$119,003 (approximately US$93,171), representing a staggering 10.3% increase from the previous record of S$107,889 just two weeks prior.

Larger Cars Also Feel the Heat

The trend isn't just limited to smaller cars. Premiums for larger vehicles in Category B have also jumped, now sitting at S$136,890—up 7.4% from S$127,501. Open category COEs, primarily used for larger cars, have risen to S$140,502, reflecting a 9.9% increase.

Commercial Vehicles and Motorcycles See Price Hikes

Even commercial vehicle COEs, including buses and goods vehicles, saw a rise to S$72,501, up from S$71,556. Motorcycle premiums also joined the surge, increasing to S$9,209 from the previous S$9,101.

A Rush of Bids Amid Uncertainty

The recent bidding exercise attracted 5,364 bids against a quota of 3,135 COEs available. The uptick in prices comes on the heels of the government’s announcement on September 8 regarding the pending reduction in rebates for electric vehicles starting in 2026.

Why Buyers Are Acting Fast!

Car dealers believe buyers are rushing into the market to secure deals before the changes take effect. Benjamin Loo, COO of CarTimes Group, explained that expected price adjustments following the modification of the Vehicular Emissions Scheme (VES) and Electric Vehicle Early Adoption Incentive (EEAI) are creating urgency among buyers.

He added, "There’s been significant pent-up demand due to high COE prices in recent years. Unless the Land Transport Authority makes further adjustments, prices are likely to continue rising."

Promotions Fuel Demand

Sales have surged in part due to aggressive dealership promotions, such as BYD's enticing '100-hour' promotion, which has significantly contributed to this record-breaking spike in Category A premiums.

Loo anticipates that COE prices will likely continue to increase in upcoming tenders, especially following the car expo.

Where Are Prices Headed?

Industry insiders are warning that the days of COEs being priced around S$30,000 are long gone. Loo predicts that in the future, 'cheap COE' could hover in the S$70,000 to S$80,000 range. Meanwhile, Raymond Tang from Yong Lee Seng Motor anticipates a potential decline in prices not until late 2027 or early 2028, as more vehicles reach the end of their life cycle.

With the scrap value of cars currently low, many owners are opting to hold onto their vehicles longer, delaying the influx of COEs back into the marketplace.

Advice for Potential Buyers

Amidst the upheaval, Lee offers some sage advice: "Buyers should avoid panicking after the VES and EEAI announcement. Patience could lead to a softer COE market soon, so hold off for a moment before deciding."