COEs for cars hit four-month high
CERTIFICATES of entitlement (COEs) for cars went up in the latest tender yesterday, with the biggest spike in the bigger cars category.
COEs for cars up to 1,600cc and 130bhp closed 1.7 per cent higher at $65,710. COEs for cars above 1,600cc or 130bhp climbed 6.3 per cent to $72,990.
Open COEs, which can be used for any vehicle type but end up mostly for bigger cars, finished 5.5 per cent higher at $72,810.
All these premiums are now at their highest in four months.
Motor traders said demand whipped up by new models, as well as an overall reduction in the supply of COEs for buyers of bigger cars, fuelled the increase.
Owners typically book a new car before the old one is scrapped. Hence, there is a lag before scrapped vehicles are converted back to fresh COEs - something the Land Transport Authority tried to address when it changed the way it determined the COE supply in 1999.
Instead of basing supply on past deregistrations, it switched to a formula that used projected deregistrations, which it said was "more responsive".
But in 2010, it reverted to the past deregistration method, along with shortening the time between quotas. Again, it said this was more responsive.
Neither addresses the fluctuations in COE prices, according to industry watchers, who have suggested a flattened COE supply to minimise the ups and downs.
Meanwhile, COEs for commercial vehicles fell by 3 per cent to close at $52,390 yesterday. Motorbike COEs ended at $4,354, hardly changed from $4,353.