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    Jul 17, 2014

    Jitters over commercial vehicle COE premiums

    THERE will be slightly more certificates of entitlement (COEs) for cars from next month to October, but the commercial vehicle COE supply will plunge, sparking fears that premiums for vans, trucks and buses will return to the record highs seen nine months ago.

    The Land Transport Authority (LTA) announced yesterday that there will be 3,777 COEs available per month from next month to October.

    This is down from 4,019 in the current quarter, with fewer COEs for commercial vehicles and motorcycles.

    Category A cars (up to 1,600cc and 130bhp) will get 1,143, or 13 per cent more than the current supply of 1,011. Category B cars (above 1,600cc or 130bhp) will get 1,010 COEs - nearly 5 per cent more than the current 966.

    The Open category, which can be used by all vehicle types but ends up being used mainly for bigger cars, will have 478 COEs, or 18.4 per cent fewer.

    That adds up to 2,631 COEs for cars - nearly 3 per cent more than today's.

    Mr Neo Nam Heng, president of the Automobile Importer and Exporter Association, reckons the premium for commercial vehicle COEs could rise on the back of a sharp drop in supply.

    The LTA said there will be 515 commercial vehicle COEs per month from next month - 33 per cent fewer than before.

    Mr Neo said this could be because more fleet owners were subscribing to the Early Turnover Scheme (ETS), designed to nudge people to replace their old diesel vehicles with new ones.

    Owners get to carry over the remaining lifespan of COEs to the replacement vehicles, which also get a bonus COE period. In the first six months of this year, 1,636 vehicles were registered under the ETS - more than the 491 registered last year when the scheme was introduced in April.

    Mr Michael Wong, general manager at Isuzu agent Triangle Auto, expects more people will go for the ETS. He said: "So I think COE will stay around $40,000-plus."