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.
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