Buyers perk up as COE prices fall
CAR buyers might be closer to owning a new set of wheels, after premiums for Certificate of Entitlement (COE) nosedived across the board and some motor traders slashed prices further.
The price slide comes in the wake of surging COE supply for the next three months and cautious buyers holding off their purchases.
The COE for small cars (up to 1,600cc and 130bhp) fell the most. It ended 15.8 per cent lower at $60,002 - the lowest since July 2012, when it hit $59,421 - in the latest round of bidding.
The premium for big cars (above 1,600cc and 130bhp) dropped 6.7 per cent to end at $70,002, while Open Category premium - which can be used for any vehicle type - fell 11.3 per cent to $65,501.
The motorcycle COE also tumbled 11.1 per cent to $4,001.
The only category that bucked the trend was Category C, for commercial vehicles and buses, which ended 10.3 per cent higher at $36,301.
Car dealers contacted were unfazed that COE premiums have fallen by nearly 20 per cent since last month.
Ron Lim, general manager of Nissan agent Tan Chong Motor, said: "It is a correction that is bound to happen...but buyers should now be more comfortable to book their cars this weekend."
Going forward, Mr Lim expects prices to hold steady or rebound slightly.
This is because more vehicles will be taken off the road, as cars registered during the boom years approach the end of their statutory 10-year lifespan.
An estimated 30,000 cars will be scrapped this year, up from 18,000 last year. Between next year and 2017, more than 100,000 cars could be scrapped each year.
Since COE prices started falling, showrooms have reported increased footfall. In response, dealers also started cutting their prices by $2,000 to $10,000.
But buyers still did not bite.
This time round, dealers said they are prepared to make more cuts to clinch the deal.
For instance, the Honda Civic 1.6L Auto is likely to slide from $134,900 to $125,900 today.
Honda agent Kah Motor's general manager, Nicholas Wong, said: "We will definitely be pushing our salespeople and offering promotions to better convince buyers that now is better than ever to get a car."
Car owner hopeful Danny Sim, who is looking to buy a new Toyota Camry soon, said: "Although I'm still hoping that prices will fall further, I think it will be easier to make a decision, now that prices are more palatable."