COE Analysis: Are we at the top yet?

February 2021 COE Analysis: There’s a slight tremor in the graph for February, but Certificate of Entitlement (COE) prices look like they will continue to rise in a steady state, for now


In November and December 2020,  we made the prediction that S$50,000 COEs would be the new normal heading into 2021. We’re not consistently there yet, thankfully, as the last two rounds of COE biddings have calmed things down a little. 

Passenger car COE prices just nudged past the S$50k mark in late January 2021 and just as we thought that would be the way things would go, prices took a consistent slide downwards over the last two bidding exercises.

It’s not much of a drop, with Category A prices, for ‘mainstream’ cars with engines up to 1.6-litres in capacity and with less than 130hp, dropping around S$1,000 each round in February, after a high of S$43,501 in the second bidding cycle in late January. It’s now sitting at S$41,001, which isn’t much to cheer about still as it’s higher than anything registered for the whole of 2020.

Category B COEs, for ‘luxury’ cars with engines more than 1.6-litres in capacity or with more than 130hp, took a small drop to S$46,002, after a high of S$50,100 in late January which then dropped to S$46,790 during the earlier February bidding exercise

Category E, the open category, which can be used to register any type of vehicle (except motorcycles), but is almost always used for Cat B cars. It dropped S$2,272, from S$49,489 to S$47,506. 

As past years have shown, there’s no need for any premature celebrations as there are a lot of factors at play here.

The withheld COEs from last year’s Circuit Breaker (a.k.a Lockdown) period are still being redistributed equally through most of this year’s bidding exercises, but it may not be enough to meet the pent up demand. As it stands, the latest bidding exercise saw 1,226 bids vying for just 903 Cat A COEs, and 1,168 bids for just 942 COEs.

Cat E, with just 304 COEs available this round, received 503 bids. Dealers typically used these to quickly get a car registered and on the road, and as a consequence are almost always used for Cat B cars. 

A manager at a Continental performance car brand noted, “There’s a segment of new car buyers that always deliver a stable sales result for us throughout the year, and it’s no surprise that they are shoppers looking for specific, new luxury performance cars. They do their own research and may take months before commiting, but when it’s time to buy they get right onto it.”  

Remember that COEs are primarily designed to limit the car population in Singapore. For a new one to be available, an old one must be phased out. That is, a car deregistered or scrapped. There is a very tiny allowance in allowing for vehicle population growth, but the nature of the system is that demand always outstrips supply. 

Historically, there’s almost always been a slight COE price dip after the Lunar New Year holidays as well. Buyers rush out in the two months ahead of the holiday to secure a new car, to show off to their relatives perhaps, then in the month or two after, car sales take a slight hit as buyer interest wanes temporarily. 

COEs will rise again, now that the holiday season is behind us. But also bear in mind that the authorised dealerships don’t like wild fluctuations in COE prices as it makes pricing cars very difficult. As explained in last month’s column, sensible bidding behaviour will still be the way forwards, which as it stands now will likely see car prices climb steadily rather than suddenly spike. There’s still a way to go before they reach a plateau yet. 

about the author

Lionel Kong
An old hand from the bad old days of crazy COEs, the straight-shooting, ex-CarBuyer editor is back in the four-wheeled world. Rumours that he went to another country to start a Judas Priest tribute band are unfounded.