Singapore COE Premiums Climb; Industry Expects Sustained Highs
Singapore's Certificate of Entitlement (COE) premiums rose across all passenger car categories in the latest bidding. Automotive industry observers anticipate these elevated prices will continue, driven by a persistent supply shortfall.
Premiums Rise Across Categories
Singapore's Certificate of Entitlement (COE) premiums increased across all passenger car categories. This occurred after the latest bidding round on Wednesday, August 19. Category A, for mainstream cars, rose 3.7 per cent to S$128,501. This figure sits just below its July high of S$129,000. Category B, for larger or more powerful cars, climbed 0.8 per cent to S$131,001.
Category E, the open category, saw a 3.1 per cent increase, reaching S$135,000. Nicholas Wong, CEO of Kah Motor, a Honda dealer, stated premiums will not drop significantly. He cites a continued supply shortfall against demand.
Supply Lags Demand
Industry observers attribute these sustained high premiums to a lagging supply. Reduced quotas and extended timelines for de-registered vehicles to re-enter the market contribute to this. Adelene Tan, Managing Director of Vantage Automotive, a BYD distributor, noted Category A’s increase. This rise happened despite flat demand and similar bid numbers.
Bidding activity was not aggressive, and market demand remained stable. There were no major car launches or large single orders in the preceding two weeks. Professor Walter Theseira, Associate Professor of Economics at the Singapore University of Social Sciences, points to a moving average lag. He explains it takes time for increased de-registrations to recycle into available quota.
Quota Dynamics and Market Factors
The current COE quota for August to October increased 0.2 per cent overall to 19,085 units. However, Category A’s supply fell 4 per cent to 7,134 units. Category B’s supply rose 6.2 per cent to 5,527 units. Singapore’s car population has a zero-growth policy for most categories. Quotas are almost entirely based on de-registrations.
Kah Motor’s Wong highlights a significant imbalance in Category A. De-registrations from April to June reached 10,278, while the quota was 7,134. This shows Category A is over-subscribed by more than 30 per cent. Demand for Category A electric vehicles, driven by rebates, also contributes to high premiums. A director from a major used car retailer expects further increases. He anticipates a Q4 car show and year-end sales rush will fuel demand.
Businesses operating in Singapore should expect continued high vehicle acquisition costs throughout 2026. This impacts companies reliant on vehicle fleets, such as logistics, ride-hailing, and sales operations. Car distributors, including BYD, face fierce competition to meet sales targets amid tight supply.
The current quota calculation method, using a 12-month rolling average, delays supply adjustments. This policy prevents fluctuations but prolongs the current high-premium environment. Sustained high prices will persist until a significant increase in de-registrations translates into a much larger COE supply. This process may take several years, according to Professor Theseira.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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