COE supply down, prices up

CAR certificate of entitlement (COE) prices hit an all time low. From February to April, there will be 1,800 car COEs available, 10 per cent down from the current 1,996 COEs on the market.

Total COEs, including commercial vehicles and motorbikes, went down by 12 per cent from 3,471 (August 2012 to January 2013) to 3,043 a month (February 2014 to April 2014).

Less supply, COE prices are likely to rise.

Land Transport Authority (LTA) have recently revised its allocation method from a six-month allocation system to a new three-month system. LTA claims that the previous method would have resulted in even smaller COE supply.

COE supply is determined by the number of deregistered vehicles in the preceding period. Deregistration is projected to rise later this year as more cars are expected to reach their 10-year mark (end of lifespan).

Yet critics argue that the new allocation method is problematic.

Singapore Vehicle Traders Association secretary Raymond Tang said this method allows big players to control the COE supply by either delaying or speeding up the number of cars scrapped.

He adds that people want to see stable COE prices, “they don’t like to see prices going up and down.” The COE bidding exercise held early this year resulted in an increase of COE prices in the open category, big cars and motorcycles (source Channel News Asia).

Needless to say, car prices will remain high according to motor traders, at least until April.