COE Analysis July 2022 1st Round: Record Breaking Highs

Ben Chia
singapore coe analysis

COE premiums hit a new record high of S$110,524 in Cat E in the latest bidding exercise for July, but will we see them spiral even higher in the months ahead?


For the third consecutive exercise, COE premiums went up across the board in all categories, with the Open Category E ending the bidding at S$110,524, smashing a nearly 30 year old record in the process.

In Category A, for internal combustion engine (ICE) cars with engines that are less than 1.6-litres in capacity and output of less than 130hp, and electric cars with an output of less than 147hp, prices went up by S$3,012, to end at S$78,001

Category B meanwhile, for ICE cars with engines that make more than 130hp, or are above 1.6-litres in capacity, and electric cars with outputs of more than 147hp, saw a rise of S$1,799 to end at S$107,800.

Category E, which is open to all vehicles except motorbikes, but usually ends up being used for big cars, saw premiums went up by S$6,124 to end the bidding at S$110,524. It represented a new record high for COE prices, with the previous benchmark of S$110,500 set back in 1994 in the then-Category 4.

COE Results for July 2022 1st Round

As mentioned, this is the third bidding exercise in row where COE premiums have rose across all categories, but for categories B and E in particular, it also marks the continuous upward spiral over the last few months, with both categories having breached the 100 grand mark for three straight exercises.

It appears that there are no signs of high COE prices easing up any time soon. With the quota still relatively tight, and projected to be reduced further for the upcoming three-month period for August to October, industry observers are expecting premiums to rise even higher in the coming months.

COE premiums have been trending upwards over the past few months

What then is driving up COE prices to historic highs in what is supposed to be a weakened economy? It appears to be a confluence of a number of factors, ranging from speculation among dealers for transferable Cat E Open COEs, to fleet operators refreshing their fleets, to an influx of rich and well-off foreigners who have apparently been flooding into Singapore ever since the borders reopened, and snapping up high value goods like properties and cars.

The latter appears to be the most plausible major driving force of ever-rising COE premiums, given that it correlates to how the prices of everything else have been going up in tandem as well. From property to interest rates and even basic necessities like food and utilities, it appears that we are in the midst of a major inflationary run.

Demand for cars have remained strong in recent months, apparently due to the influx of foreign buyers flooding into Singapore

The issue with cars in Singapore though is that there are essentially no restrictions on purchase save for the quota. This means that anybody can just walk into a showroom and buy a car so long as they have the money and are willing to stump up the cash. This is unlike the property market which is somewhat more regulated, with measures to restrict the eligibility of buyers.

Whether that’s an acceptable policy is a discussion best left for another time, but the inevitable result is that a limited supply allied to strong demand will naturally drive prices of COEs, and thus car prices, upwards, in the absence of any external regulating factors. There’s also the ‘kiasu’ factor, with buyers desperate for a car jumping in to bid while they still can, further adding to the already heated-up demand that we see today.

If you’re thinking of buying a car soon, the bad news is that prices are not expected to drop significantly, at least for the foreseeable future. It is likely that we will only see a major dip in COE prices starting from 2024 or 2025, when a bumper crop of cars registered in 2014 and 2015 will see their COEs expire then. But with the quota set to remain lean for now, and demand showing little signs of abating, don’t be surprised if COE premiums remain above six figures for the rest of the year. 


Analysis coe july 2022

About the Author

Ben Chia

CarBuyer's print editor went out to explore the Great Big World, including a stint working in China (despite his limited Mandarin). Now he's back, ready to foist upon you his takes on everything good and wonderful about the automotive world. Follow Ben on Instagram @carbuyer.ben

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