COE Premiums Hit Record High in Singapore
In a shocking turn of events, Certificate of Entitlement (COE) premiums for large cars in Singapore skyrocketed to a record-breaking S$120,000 (US$87,816) during the first bidding exercise of 2025 on Wednesday, January 8th. This increase marks the highest price seen in over a year, causing a stir among car buyers and industry experts alike.
Rising Premiums Across Categories
Premiums for larger and more powerful cars in Category B saw a significant jump, reaching S$121,501 from the previous S$109,000. Open category COEs, typically utilized for large cars, also experienced a spike, rising to S$123,000 from S$108,992. The last time premiums for large car COEs surpassed S$120,000 was back on December 6, 2023.
On the other hand, Category A cars, defined as those with engine capacities of 1,600cc and below with horsepower not exceeding 130bhp, saw a decrease in premiums, closing at S$93,699 compared to S$96,000 in the previous exercise. Similarly, COEs for commercial vehicles, including goods vehicles and buses, dropped to S$67,891 from S$69,890 in the prior bidding round. Motorcycle premiums, however, witnessed an increase, closing at S$9,001, up from S$8,381.
Government Intervention and Future Outlook
Amidst these fluctuations in COE premiums, the government has announced plans to gradually introduce up to 20,000 additional COEs across all vehicle categories starting from February, spanning over the next few years. This initiative comes in anticipation of the forthcoming implementation of the ERP 2.0 system aimed at managing traffic congestion effectively.
Transport Minister Chee Hong Tat addressed the issue in parliament last November, hinting at potential further injections of COEs if distance-based charging is adopted in the future. Analysts in the market had previously predicted an upward trend in COE premiums due to the surging demand for electric vehicles, particularly from Chinese manufacturers like BYD and Skyworth, which recently established its first showroom in Singapore.
As consumers grapple with the escalating costs of owning cars in Singapore, the automotive industry is bracing for continued volatility in COE prices, prompting stakeholders to closely monitor developments and adapt to the evolving landscape. With the nation’s transportation sector undergoing significant transformations, the implications of these premium hikes extend beyond financial implications, shaping the way people commute and interact with their vehicles on a daily basis.