Premium for smaller cars' COE surges up to $103,721 while Open category hits an all-time high of $124,501.

In Singapore, the cost of owning a certificate of entitlement (COE) for smaller cars has just reached an all-time high. On Wednesday, the premium for this mandatory document surpassed $100,000 for the first time, settling at a staggering $103,721.

More impressive marks were achieved in the bigger automobile and Open divisions towards the end of the tender process on Wednesday. Car vendors explained that the rise in prices was due to a combination of successful transactions at the Cars@Expo function and the anticipation of a decreased COE allowance between May and July.

The cost of COE permit for compact cars with engines up to 1600cc and 130bhp, as well as for electric vehicles (EVs) with power of up to 110 kilowatts, rose to $103,721 in the latest tender. This represents a 7.48% increase from the previous record high of $96,501 reported during the April 5 auction.

The cost of buying the Certificate of Entitlement (COE) for bigger cars and electric vehicles (EVs) with higher power has risen to $120,889. This represents a rise of 2.02% from the previous record of $118,501 that was set just two weeks ago.

The cost of the COE for the Open classification has reached an all-time high at $124,501, indicating a 4.63% increase from its previous cost of $118,990. Remarkably, this is the highest amount that has ever been recorded for any COE group.

The cost of motorcycle Certificate of Entitlement (COE) increased by 1.48 percent, rising from $12,001 to $12,179.

The category that experienced a decrease was the commercial vehicle COE, which is suitable for lorries, trucks, and vans. The percentage drop was 1.91, and the price decreased from $76,801 to $75,334.

Experts in the industry predicted that the decrease was not surprising, since the need for COEs had reduced. Dealers had already hurried to meet the deadline of April 1st, when the rewards for environmentally friendly light vehicles and buses decreased and a new approach for testing emissions began to apply.

Sources have reported that the recent Cars@Expo event was successful in terms of sales, leading to increased demand for car COEs. This event was held over two days and featured 17 car brands with authorised distributors. However, the dealers have chosen not to disclose specific figures regarding the number of sales made.

Car sellers were extremely keen to acquire COEs during the recent bidding process before the current 90-day limit expires. This is due to their anticipation of a limited number of COEs being offered in the coming three months.

Starting from February, the quantity of COEs up for bidding each month within a three-month window is mostly decided by the mean amount of cars decommissioned during the prior four quarters, which equates to 12 months.

The Land Transport Authority hasn't released the March deregistration figures yet, but traders in the automotive industry have mentioned that there were less vehicles taken off the roads in January and February. Car sellers with outstanding orders would prefer to obtain COEs on Wednesday. This would be a safer option than waiting for a later date, as there may not be enough supply in the future. If this is the case, the premiums may increase, resulting in a higher cost for the dealers.

A few sellers, such as Mr. Michael Wee who leads Eurokars EV for MG, are worried that buyers who are interested in smaller and weaker vehicles may avoid visiting stores due to the COE rate for such vehicles exceeding $100,000.

In certain models within this category, the COE fee could amount to two or threefold more than the actual cost of the vehicle.

According to the President of Singapore Vehicle Traders Association, Mr. Neo Tiam Ting, it is possible that the COE premiums for both types of cars may increase further.

He indicated that the companies that provide automobiles for ride-hailing services have been a significant factor in the increase in the need for COEs in the past few years.

Companies that aggressively expand their fleet and cause an increase in COE premium, can transfer the added cost to customers by making small increases in their daily rental rates, as per the statement made by the spokesperson. On the other hand, private purchasers must bear the brunt of the premium increase all at once and obtain a larger loan.