Published February 19, 2009

COE premiums soar across the board

By SAMUEL EE

	Email this article
	Print article
	Feedback

(SINGAPORE) COE premiums soared across the board yesterday as car buyers gave a knee-jerk response to last week's announcement that the new quota year for Certificates of Entitlement will be 24 per cent smaller.

Last Thursday, the government announced that the annual quota of COEs for Quota Year 2009 will have 30.9 per cent less Category B 'big car' COEs, 28 per cent fewer Cat A 'small car' COEs, and a 12 per cent decrease in Cat E open category COEs.

Overall, QY09 - which runs from May 2009 to April 2010 - will provide 83,789 COEs compared with QY08's 110,354.

As for the number of passenger cars that can be registered in calendar year 2009, the maximum will be 73,830 units, or 24.2 per cent less than 2008's total of 97,348.

So it was no surprise that yesterday's bidding exercise - the first after the quota announcement - revealed some 'panic bidding', with more bids than usual.

'Those who are worried that COE premiums will rise as a result of this substantial quota cut came in to buy,' said the general manager of a mid-sized dealership.

He said all the showrooms in the Leng Kee Road area were crowded last weekend.

'Ours had 30 to 40 per cent more showroom traffic,' he added. 'Bookings also rose by that amount because of our aggressive promotions.'

In yesterday's tender, Cat A - for cars 1,600cc and below - jumped $3,440 to $4,460, while Cat B - for cars above 1,600cc - spiked up $4,200 to $4,889. Cat E - the open category - rose $2,889 to $5,889.

For Cat C - commercial vehicles - the premium increased $1,600 to $4,190 as Cat D for motorcycles inched up $100 to $801.

'Cat E is much higher probably because some agents want to keep a stockpile just in case premiums shoot up later,' said one senior executive of a Japanese dealership. Cat E COEs are transferrable. But he added that this uptrend may not pan out.

He explained: 'Remember how the Cat A COE collapsed to $2 last November even after the mid-quota year review cut the available COEs by 10 per cent? In this recession, you never know what might happen.'