COE prices for all categories fall; Category B tumbles 15.4% to S$110,001

The Category A COE applies to mainstream cars with engines up to 1,600 cc in capacity or with up to 97 kW, or for EVs with up to 110 kW.

Prices for Category C, for commercial vehicles and buses, decreased 2.2 per cent, or S$1,578, to S$69,423.

Category D, applicable to motorcycles, decreased 8.7 per cent, or S$856, to S$9,002.

COE prices for passenger cars reached historical highs in October this year, but have begun to recede as the supply of COEs has increased, partly due to additional “cut and fill” measures by the government to bring forward COE quota from peak years.

Expected crash did not materialise

Car dealers said that the price reductions in this round of bidding were less than what they had expected.

Nicholas Wong, chief executive officer for Honda distributor Kah Motor, said: “COE prices for passenger cars would have crashed if not for latent demand from commercial fleets.”

“As with previous rounds, we saw fleets come in the last moments of bidding and raise the final prices considerably,” he added.

Ng Choon Wee, commercial director at Hyundai distributor Komoco Motors, noted that he also observed a large number of higher-priced bids arrive in the closing minutes of COE bidding, which is typical of private-hire vehicle fleet companies.

“Without those bids, I think Category B would have ended up at S$100,000, not S$110,000,” he said.

“The retail market is so weak; hardly anybody is buying cars,” noted Wong, adding that the year-end period – especially during school holidays – is typically a lull period for retail car sales as many potential buyers are abroad.

Ng pointed out that the drive to register cars before the end of 2023 has also dissipated.

In 2024, stricter emissions rules mean that some cars will see price increases of up to S$10,000 or more as rebates from the Vehicular Emissions Scheme are reduced or lost. EVs will also see their maximum rebate from the EV Early Adoption Incentive scheme reduced from S$20,000 to S$15,000.

He said that most dealers had either already run out of stock to register before the end of 2023 or switched to 2024’s higher pricing.

Both of them noted that COE prices would continue to moderate in 2024 on an expected increase in supply.

“Fleet operators will continue to add to their fleets. For the retail side, COE prices have fallen, but they are still very high. If it drops S$20,000 or more, then we’ll see some retail action return to the market,” said Ng.

“I think COE prices will continue to drop, but they will not crash with the continued demand from fleets. If there is no policy shift, they will continue to operate as they have in 2023,” added Kah Motor’s Wong.