Demand for Cars Fall to 3.5-Year Low; COEs Fall Again

19 Jun, 2019 • 3 min read
Demand for Cars Fall to 3.5-Year Low; COEs Fall Again

COE Premiums Fell in Second Tender Exercise of June

Certificate of Entitlement (COE) premiums for cars (Cat A, B and E) fell 8.6% versus the last tender exercise.

Premiums for cars below 1,600cc or 130bhp (Cat A) fell 10% to $26,999.

Premiums for cars above 1,600cc or 130bhp (Cat B) fell 9.6% to $35,906.

For the “Open” Category (Cat E), which is typically used for bigger cars, premiums fell 6.2% to $39,400.

COE Demand for Cars Lowest in 3.5 Years

The Quota for COEs (Cat A, B and E) this exercise was 2,946, similar to the last bidding exercise.

However, demand (for the same categories) fell significantly, with the received bids at 3,696. This is the lowest amount since December 2015 or 3.5 years ago.

We think the low demand (Bids Received) for COEs was the cause of the significant COE fall, despite a somewhat unchanged supply (Quota). One explanation is car owners choosing to extend their COEs instead of buying a new car.

Aging cars = Higher maintenance costs

As cars age (especially due to COE renewals), maintenance becomes more important and more expensive.

Steer’s 5% cashback and exclusive discounts allows customers to save money while our simple-to-use platform which allows car owners to find reliable car workshops.

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