Keep calm as COE supply rises 41%
THERE will be 6,637 certificates of entitlement (COEs) up for grabs per month in the May-to-July quota - 41 per cent more than the supply in the current period.
Industry watchers believe the development will nudge premiums southwards, unless the panic buying that gripped the market in the last month or so persists.
In announcing the latest quota yesterday, the Land Transport Authority (LTA) said the monthly supply of Category A COEs (for cars up to 1,600cc and 130bhp) will go up by 45 per cent to 2,853.
The monthly supply of Category B COEs (for cars above 1,600cc or 130bhp) will expand by 29 per cent to 1,856.
The Open Category, which can be used for any vehicle type but ends up being used mainly for bigger cars, will see a 54 per cent increase in monthly supply to 539.
So car buyers will have 5,248 COEs to bid for - 39 per cent more than today's.
The supply for commercial vehicles will almost double to 736, while that for motorcycles will rise by 15 per cent to 653.
Motor traders expect supplies in subsequent quotas to continue expanding, before the next wave of contractions returns some time in 2019.
Automobile Importer and Exporter Association president Neo Nam Heng described the latest increase as sizeable.
But he warned that buyers and sellers will not see the benefits of the bigger supply if "everyone rushes in".
"You'll be defeating the purpose of the bigger quota," he said.
He advised consumers "not to be conned" by sellers who resort to fear tactics.
Several dealers are reported to be citing rising interest rates and a more stringent Carbon Emission-based Vehicle Scheme taking effect from July as reasons for people to buy now.
As a result, car COE prices have shot up by an average of $10,000 in the last month or so, negating whatever savings buyers were hoping to get.
Mr Neo said that because of the rush, sellers were also unable to deliver several cars at the prices they had been sold at.
"At the end of the day, no one gains," he said.
"So, act wisely."
Even LTA seems to be hinting that there is no need to rush.
"COEs that come from deregistrations account for most of the COE supply," it said yesterday.
"In the next two years, the number of vehicles reaching the 10th year of their COE life (hence due for deregistration) is expected to increase."