COE premiums finally breached the S$100,000 barrier for the first time in almost 30 years, with both Cat B and Cat E crossing the milestone in the latest bidding exercise

SINGAPORE

Certificate of Entitlement (COE) premiums breached a sacred landmark for the first time in almost 30 years in the first bidding exercise for June 2022, with the biggest shock being both Categories B and E crossing the S$100,000 milestone in the same exercise. 

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$5,800, to end at S$73,801

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$4,795 to end at S$100,684.

Category E, which is open to all vehicles except motorcycles, but usually ends up being used for big cars, saw premiums go up by S$4,796 to end the bidding at S$100,697.

Crossing the S$100,000 mark is nearly unprecedented in the history of the COE system, with 1994 being the last time that premiums went that high. Back then, the then-Category 4 topped S$110,500, so there’s still a way to go before premiums hit the all time record.

Part of the reason for the rise in premiums across the board could be attributed to the three week break since the last bidding exercise in May, which typically meant that car dealers would have more time to collect orders, therefore putting more upward pressure on premiums.

Where will things go from here? It’s hard to say definitively. In normal times, COE premiums tend to be reactionary, and will usually see a fall following a sharp rise (and vice versa). But these are not exactly normal times. We’re in a unique situation of economic rebound after two years of pandemic-induced stagnation, resulting in inflation rising sharply all round. The situation is compounded by a tightening COE quota, and the confluence of factors have resulted in what we’re seeing today.

Given that, the S$100k COE is simply an inevitability, and perhaps we all just have to get used to this ‘new normal’. But, as with everything, what goes up must come down eventually. For car buyers who can’t stomach the idea of a six figure COE, the only thing you can do is bide your time for now, or consider getting a second hand ride.

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