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Cat B COE continues upward rise, and supply for upcoming quarter expected to shrink significantly

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5th Gear

Cat B COE continues upward rise, and supply for upcoming quarter expected to shrink significantly

Fewer projected car deregistrations will lead to significant COE quota shrinkage in the upcoming quarter, which will continue to drive COE prices upward.

05 Oct 2021

COE price trend over the past quarter

COE premiums for both Cat B and Cat E hit a six-year high in Sept

COE premiums for larger capacity cars have continued its upward trend, though the upward climb has slightly tapered off. Compared to the preceding quarter (Apr to Jun 2021), the average COE price across Jul to Sep 2021 is 4.5% higher for Cat B, and 5.1% higher for Cat E. In Sep, COE premiums for Cat B and E hit six-year highs. For Cat A COE, premiums have remained largely the same from the preceding quarter, with an quarter-on-quarter drop of just 0.9%.

The trend for COE premiums is projected to continue to rise upwards. COE premiums hit incredible highs across the board in 2012-2013, so premiums in the coming two years are expected to be similarly high. Many owners who reach the end of their 10-year COE cycle will likely be looking to purchase new cars. For buyers who are in the market for a new car right now, it would be prudent to buy now instead of waiting further.

Vehicle deregistration data and COE supply projection

Significant projected COE supply shrinkage is expected to put increased upward pressure on COE prices

Based on statistical forecasting using latest data released by the LTA, the quota for the upcoming next Nov to Jan quarter is expected to decrease by 24% for passenger cars (excluding commercial vehicle and motorbikes). This is extrapolated from the lower vehicle deregistration figures in Jul to Sep 2021.

For Cat A, COE quota is projected to decrease by 30% from a monthly average of 1,605. For Cat B, COE quota is projected to decrease by 22% from a monthly average of 1,541. For Cat E, COE quota is projected to decrease by 12% from a monthly average of 394.

The significant shrinkage in COE supply is expected to put increased upward pressure on COE prices.

New car pricing trend

New car prices have increased by 6.5% compared to the preceding quarter

Comparing car prices for popular new cars across authorised dealers, there was a 6.5% quarter on quarter increase in new car prices.

The average increase in new car prices is proportionate to the increase in Cat B COE premiums, which indicates that car buying demand continues to remain steady compared to the preceding quarter.

Most popular used cars

Over the past three month period, these are the five most listed used cars on sgCarMart.
 

ModelYear of registrationAverage depreciation (approx.)

Honda Vezel 1.5A X 2016$10,437/yr

Mercedes-Benz C-Class C180 Avantgarde 2016$16,065/yr

Toyota Corolla Altis 1.6A Elegance 2019$10,118/yr

Honda Civic 1.6A Vti2019$10,617/yr

Mazda 3 1.5A Sunroof2017$9,159/yr

The Honda Vezel and Mercedes-Benz C-Class continue to the most popular used cars on sgCarMart. The significant number of 2016 Vezels listed continues the trend from the previous quarter, whereby full-time Grab drivers are likely trading in their existing cars for newer models to bypass the necessary course that seven years and older cars will be required to undertake.

However, the average depreciation for used cars have remained relatively consistent compared to the previous quarter. With most of the used cars being Cat A models, this is not surprising - Cat A COE premiums have remained relatively constant compared to the previous quarter as well.

For car owners who may be put off by COE premiums continuing to increase and thus make new cars more expensive, buying a used car will still be a more feasible option.

https://www.sgcarmart.com/news/events_features.php?AID=4022

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5th Gear

Compared to 2011 to 2015 when the COE supply was low, the situation is worse now as a lot of COEs are taken up by PHV operators and car rental companies.  Hence, the COEs available for bidding for personal use is lesser than the previous period.  I'm expecting Cat A to return to $60k and Cat B to go beyond $80k by early next year.

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Turbocharged

2nd hand Car Dealers....Huat argh...

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6th Gear
21 minutes ago, ER-3682 said:

2nd hand Car Dealers....Huat argh...

no lah...government huat ah...

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Turbocharged

Rising hawker food prices, rising tariffs, rising coe, rising covid cases, rising petrol pump prices, rising housing costs but salary no up...this is swiss standard of living..

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5th Gear
9 minutes ago, Kyrios said:

Rising hawker food prices, rising tariffs, rising coe, rising covid cases, rising petrol pump prices, rising housing costs but salary no up...this is swiss standard of living..

Spend during Covid period, out somewhere have to take back, not somewhere but is always from the people.

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4th Gear
1 hour ago, ER-3682 said:

2nd hand Car Dealers....Huat argh...

 

41 minutes ago, mikk123 said:

no lah...government huat ah...

Both very huat!!

PI/AD selling new car can huat also ma? Lesser cars to sell so higher margin on each one? *Looks at Honda Accord* :D

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Twincharged
1 hour ago, awhtc said:

Compared to 2011 to 2015 when the COE supply was low, the situation is worse now as a lot of COEs are taken up by PHV operators and car rental companies.  Hence, the COEs available for bidding for personal use is lesser than the previous period.  I'm expecting Cat A to return to $60k and Cat B to go beyond $80k by early next year.

Looking at the  COE price during the peak in the past,  near $100k is just a matter of when. COE may even break $100k mark. PHV has taken up lots of COE during the bumper crop supply, there should be excess PHV cars around. Moreover now PHV business is not good , plus many came to realization that driving a new car aimlessly on the road is not as a glamorous  thing  as they thought after all, so I think PHV won't have much impact on  COE price for now, it is the low COE supply that will cause the big surge in price. 

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Twincharged
58 minutes ago, mikk123 said:

no lah...government huat ah...

Everyone huat, even buyer who can afford meaning must have huat from somewhere .

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Hypersonic (edited)

It's not used car dealers huat it's the buyers.

Cat B COE so high and people pay full cash means people got a lot of money lah.

How to full cash if people broke?

:D

Edited by Jamesc
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5th Gear
3 minutes ago, Ct3833 said:

Looking at the  COE price during the peak in the past,  near $100k is just a matter of when. COE may even break $100k mark. PHV has taken up lots of COE during the bumper crop supply, there should be excess PHV cars around. Moreover now PHV business is not good , plus many came to realization that driving a new car aimlessly on the road is not as a glamorous  thing  as they thought after all, so I think PHV won't have much impact on  COE price for now, it is the low COE supply that will cause the big surge in price. 

 

We are comparing against different periods for the PHVs.  Yours should be the 2016-2018 Uber and Grab expansion period and the demand of COEs for PHVs is definitely lower now.

Mine is relative to 2011-2015 period when PHVs did not exist.  E.g. if Cat A COE quota per tender is 700, 50-100 could be taken up by people who are driving as PHVs.  The effective quota available for personal use is therefore even lower.

$100k COE will be worrying even for those who own a car now.  They will need to start saving for their next car or COE renewal a few years down the road.

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Hypersonic

If people full cash new cars mean not buying used cars lah.

:D

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Hypersonic

People buying bungalows in Sentosa are not competing with people buying 3 room flats in Yishun.

:D

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Twincharged
15 minutes ago, Ct3833 said:

Looking at the  COE price during the peak in the past,  near $100k is just a matter of when. COE may even break $100k mark. PHV has taken up lots of COE during the bumper crop supply, there should be excess PHV cars around. Moreover now PHV business is not good , plus many came to realization that driving a new car aimlessly on the road is not as a glamorous  thing  as they thought after all, so I think PHV won't have much impact on  COE price for now, it is the low COE supply that will cause the big surge in price. 

Yes, it is a demand and supply game. Everyone should have learnt to play the game. It is getting predictable. 

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Turbocharged

Dilemma..car is 6 years old this month...should i wait till GE 2025 when usually prices will soften? 😆

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Moderator
3 minutes ago, Kyrios said:

Dilemma..car is 6 years old this month...should i wait till GE 2025 when usually prices will soften? 😆

if the car give you no prob, can still drive lah. haha.

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3rd Gear

After this bidding they will announce Nov-Jan quota liao. If drop 22% like sgcm predicted, that’s it liao. To the moon

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Turbocharged
46 minutes ago, Jamesc said:

It's not used car dealers huat it's the buyers.

Cat B COE so high and people pay full cash means people got a lot of money lah.

How to full cash if people broke?

:D

exactly. who push up coe prices? Buyers lor. just because one cannot afford doesnt mean others cannot. as long as someone is willing to pay the price for the coe it is his. dont understand why people keep saying it manipulated.

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