COE Analysis: 2018 In Review, 2019 Predictions

2018’s COE price drops meant a good year for car buying in Singapore, but will 2019 be even better?


In a way it’s quite pleasing to write this sentence: 2018 was a majorly calm year for Certificates of Entitlement (COEs), with drops of approximately 30 percent across the board for all categories.

At CarBuyer we often say (with a sort of inverse, perverse pride) that the Singapore car market is the toughest in the world, and though that remains true, it was probably one of the best years to be a car buyer here.

Category A, the ‘mainstream’ category for cars with engines of a capacity less than 1.6-litres, or making less than 130hp saw the price gradually tumble over 12 months – from the mid-high $30k to the mid-$20k range.

“…the average COE price for Category A has dropped from $45,989 in 2018, to $30,037 in 2017.”

There was one particularly dramatic drop in July, where it went from $34,110 to $25,000 – which some industry observers attributed to a possible system glitch – and immediately corrected itself the next round back to $32,699.

But the fact that Cat A slowly moseyed on down to the same $25k-ish price level was no fluke and in fact, it hit rock bottom for 2018 in December’s first round, $23,568.

To put this into perspective, the average COE price for Category A has dropped from $45,989 in 2018, to $30,037 in 2017.

As we’ve been saying all year, it’s been a calm year with no ‘showroom rushes’, as sales managers we’ve queried have been reporting that there’s been plenty of tyre kicking, but less signing on the dotted line.

Low COE prices have allowed cars like the Kia Stonic to be priced well below $80k

The accepted theory in the car industry is that this is what car buying looks like now, especially now that car sharing app companies have filled their fleets (or even over-filled them and flooding the used car market by selling them off) and no one can ignore the fact that MRT stations have erupted like gigantic, concrete mushrooms in places they’ve never been before.

Ironically, car-lite could have a benefit of low COE prices in the long term, but don’t go around shouting it please, or the Land Transport Authority (LTA) might catch wind of it and start worrying about COE revenue – 2018 saw a 6.6-percent drop of revenue to S$5.6-billion.  

Jokes aside, what about 2019?

It looks like more of the same, says a straw poll of sales managers from varied brands, and that’s our own view too, something the Category B results from 2018 seem to back up.

Luxury car buyers are less affected by COE price fluctuations, which is why Cat B plateau-ed far earlier than Cat A in 2018 

Category B, unofficially the luxury category, for cars with engines of capacity more than 1.6-litres, or with 130hp or more, had an even more uneventful year. It dropped from $45k down to $30k-ish by July and has basically stayed there until now.

If that doesn’t show how the market has plateaued, I don’t know what else does. In other words, it doesn’t look like COEs will drop any further.

If you consider the dimension of financial instability and a less bullish 2019 globally that could act as a further drag on demand, then the COE price dropping further is certainly possible – Cat A prices did hit sub-$20k during the previous Global Recession in 2010, but currently the economy hasn’t reached those levels yet. 

So the forecast for 2019: Stable prices and continued low COEs, which is probably the most welcome news we can expect in the looming shadow.

about the author

Derryn Wong
Has a keen interest in all things mechanical, technological, animal and mineral. Is particularly fascinated by eco-cars and cars which make no logical sense. An avid motorcyclist and photographer, he also enjoys cats.