COE premiums up across the board; Cat A price hits all-time high of $133,009

SINGAPORE – The Category A certificate of entitlement (COE) premium hit an all-time high of $133,009 in the Sept 9 tender exercise, as prices rose across all the other categories.

The impending cut in incentives for buying electric vehicles (EVs) from January 2027 and expectation that COE prices will continue to rise were among the reasons industry insiders cited for this round’s high prices.

The latest price for a Category A COE – meant for smaller, less powerful cars and EVs – was 3.5 per cent higher than the $128,501 posted at the previous tender, overtaking the $129,000 record that was set in July.

The premium for a Category B COE – used to register larger, more powerful cars and EVs – inched up 3.1 per cent from $131,001 to $135,001, the highest since November 2023, when it hit $135,336.

The higher COE prices come after a three-week interval from the previous exercise, instead of the usual two weeks. Motor dealers said the extra one week gives the trade more time to accumulate orders.

The Open category (Category E) COE premium also rose 2.1 per cent from $135,000 to $137,890.

As these certificates are transferrable, motor traders often secure them for the flexibility to register cars without waiting for the next tender exercise.

The price of certificates for commercial vehicles (Category C) was 3.4 per cent higher than the previous $90,002, ending at $93,101.

The motorcycle (Category D) COE premium posted an 11.1 per cent hike from $11,301 to $12,556. This is the fifth consecutive round in which the price of such certificates rose, edging closer to the $13,189 peak recorded in November 2022.

COE prices likely to remain high

In a statement issued after the Sept 9 tender exercise, the Land Transport Authority urged buyers and dealers to be prudent in bidding for COEs, attributing the elevated premiums to the three-week gap from the last exercise.

Motor dealers said some other reasons for the high prices include the upcoming cut in incentives for EVs from 2027; ongoing competition among car dealers for market share; demand from owners of cars nearing the end of their COE lifespan; and the expectation that premiums will rise in the next few exercises.

Ng Choon Wee, commercial director of Komoco Motors, distributor of Hyundai cars, noticed that the bids were quite aggressive, pushing up premiums significantly.

In the last 10 minutes or so before the exercise closed, Category A COE premiums rose by over $5,000 with 70 more bidders.

With the Category A price rising more than Category B’s, reducing the difference between the two, Ng said that this might have resulted in some buying interest swinging over to the bigger models.

But Nicholas Wong, chief executive of Honda agent Kah Motor, disagreed.

He said Category B models still cost more to buy, and it is more common for those who had intended to buy larger cars to shop for Category A models instead.

Moreover, the market has too many brands fighting for dominance, Wong said.

Sng Khai Hing, executive director of Vertex Automobile, the distributor of various Chinese car brands including Omoda and Jaecoo, said her company has seen strong demand from people looking to replace their existing cars with expiring COEs.

This is coupled with buyers rushing to qualify for the current EV Early Adoption Incentive and the revised Vehicular Emissions Scheme by the end of 2026, she added. From Jan 1, 2027, the rebates for EVs will be reduced by $10,000.

Jason Lim, managing director of Trans Eurokars Mazda, expects COEs in the car categories to rise further in the coming exercises, especially with the Car Expo event in October. This is a large-scale car sales event organised by SPH Media, which publishes The Straits Times.

While the latest tender results will send car prices up, five motor dealers that spoke with ST said it is likely that COE premiums will continue to stay elevated.

“Those who really need a car will surely suffer,” said Ng from Komoco.