The COE results for Round 2 June 2017 are out, and for the first time all year, every single category has dropped by at least $1,600!
This is no surprise for categories A, B and E, which have been dropping steadily since May. On the other hand, it is a reversal in trend for Category C, which showed an unusual rise of $8,000 just last round. What are the major changes you should know about, and how will they affect you? Find out here!
1. ALL-Category Price Drop
All categories have shown a small but significant price drop this round. The biggest drop was seen in category B, which applies to bigger cars above 1600cc or 97kW. Premiums for this category fell from $50,110 to $47,501, a difference of $2,609. Cat A (small cars up to 1600cc and 97kW) and Cat E (open category for all vehicles) also showed similar drops of $2,400 and $2,525 respectively.
Experts believe that this drop is due to an upcoming change in emission standards for petrol vehicles. New Singaporean cars will now be adhering to the Euro 6 emission standards. Sellers will now be clearing out their old stock which do not adhere to the new change, while awaiting their new orders to come in. This means that in the meantime, there will be a decrease in cars being sold, which is why demand for COE is lower as well. On top of that, small decreases in COE premiums are not uncommon during June and December, especially for private vehicles, because many people are overseas for school holiday period. If you’re thinking of buying a new car, this period may be a good time to stay home and bid!
2. Category C Trend Reversal
Category C (commercial vehicles), like the other categories, showed a decrease in premiums. The drop was about $1,622, from $38,501 to $36,879. In the case of Cat C, however, this is unusual as prices for this category have been going up steeply for the past 2 rounds. It is possible that demand has been spent in the previous rounds, resulting in fewer bidders and lower premiums this time. Some experts have also suggested that in the current poor economy, businesses are reducing expenses and cutting back on vehicle purchases.
3. Future Possibilities
COE premiums are generally expected to stay low in the next round, as the new Euro 6 emission standards are still being implemented. As sellers continue to await their Euro 6 stock, there may be fewer cars in the market for a while, which means that demand for COE might remain low. Because of this, there may be more drivers looking to renew COE or buy a second hand car.
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For commercial vehicles, COE is also expected to remain low as demand for now appears to be mostly cleared. On top of that, if the economic climate remains poor, companies are expected to continue using their old vehicles or buy used ones rather than spend on new vehicles. Even with the recent rise of apps like Grab, there seems to be currently more private-hire cars in the market than drivers, so premiums are unlikely to rise by much.
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Keyword: COE Prices Drop Across All Categories: Here’s What You Should Know