Certificate of Entitlement (COE) premiums for cars (Cat A, B and E) plummeted 16.1% in the second tender exercise of May.
Premiums for cars below 1,600cc or 130bhp (Cat A) fell 26.4% to $27,000.
Premiums for cars above 1,600cc or 130bhp (Cat B) fell 11.3% to $42,564.
For the “Open” Category (Cat E), which is typically used for bigger cars, premiums fell 10.5% to $47,000.
Despite the price fall, COEs for cars (Cat A, B and E) are still 35% since its December low.
Demand led decline
The quota for COEs in this exercise was 4,327, 1% higher than the last bidding exercise.
Supply (Quota) only marginally increased which should not materially impact pricing, leading us to believe this bidding round’s decline is demand led.
Potential explanations include: 1) a weaker macroeconomic environment, leading to fewer car buyers, 2) private hire vehicles pulling back on purchases.
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