COE Premiums Fell in June
Certificate of Entitlement (COE) premiums for cars (Cat A, B and E) fell 2.1% in the first tender exercise of June.
Cat A premiums surged while Cat B and E fell.
Premiums for cars below 1,600cc or 130bhp (Cat A) rose 11.1% to $30,009.
Premiums for cars above 1,600cc or 130bhp (Cat B) fell 6.7% to $39,728.
For the “Open” Category (Cat E), which is typically used for bigger cars, premiums fell 10.6% to $42,002.
Renewing over buying new cars
The Quota for COEs this exercise was 4,257, 2% lower than the last bidding exercise.
This is the second time COEs have fallen this year, and we think this could be car owners choosing to extend their COEs instead of buying a new car.
This results in less demand (Bids Received) for COEs, even though supply (Quota) is falling.
Cat A premiums rose, unlike the other categories, and this could be due to the already significant fall of 26% last tender exercise.
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As cars age (especially due to COE renewals), maintenance becomes more important and more expensive.
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