COE price trend over the past quarter: July to September 2022 vs April to June 2022
COE premiums have continued to climb in the past quarter – and to rather alarming levels too.
Creeping towards $90,000 in late August, Category A almost neared the peaks seen for ‘mass market cars’ during the 2013 period. On the other hand, premiums in Categories B and E both smashed their previous records; the Open category reached a new peak of $114,001 in late July, whereas the category for larger cars climbed to $113,000 in early September.
Consequently, the July to September average for Cat A COE prices was 15 per cent higher than the previous period. Premiums in Cat B and Cat E also accelerated quicker than they last did – by close to 13 per cent and 14 per cent respectively.
Amidst the skyrocketing prices (and rapidly growing dissent on the ground), intervention from the authorities arrived quite shortly after our previous analysis – albeit not in the way that most people would have expected.
When announcing the COE supply for the August to October period, the LTA announced that it would also be changing its quota counting method to reduce price volatility. The supply of COEs for any upcoming period is now based on a rolling average of two quarters of vehicle deregistrations (in other words, six months). Up till that point, only the previous quarter had been taken into account.
The new rules allowed for a total COE quota of 10,581 for August to October, rather than 9,394 if the old system had been followed. Nonetheless, the number still represented an 11.5 per cent shrinkage from the May to July period. As demand was sustained over the last few months – and even bolstered by events like Cars@Expo – premiums have also risen across the board.
Buyers, however, will still have to proceed with caution. In the same way that COE prices are unlikely to climb as drastically, they are now also unlikely to slide as much. Furthermore, freshly rising interest rates, triggered by the USA’s Federal Reserve System, are threatening to make car loans more expensive than they were.
Vehicle de-registration and COE supply forecasting
Our analyses moving forward now also follow the new system of calculation, and data extrapolated from de-registrations between April to September 2022 suggests that the COE supply is set to dip yet again for the November 2022 to January 2023 period. Overall, an 11 per cent shrinkage is projected.
Cat A looks to be impacted most heavily, where the COE quota is projected to drop by 16 per cent from the current monthly average of 1,086. Although less drastically, the monthly COE quota in Cat B is also projected to fall by 13 per cent from the current average of 939.
Only a quota increase seems to be on the horizon for Category E, but even this won’t be substantial: A rise of 8 per cent is projected, from the outgoing monthly average of 327.
Due the change in the quota calculation method, the 11.5 per cent overall dip in COE supply for the August to October period represented a much gentler fall than the 19 per cent we had projected.
New car pricing: July to September 2022
Sgcarmart uses a pool of popular models from authorised dealers to analyse the general price trends of new cars.
Based on our sample, there was an 8 per cent quarter-on quarter-increase, compared to the previous tri-monthly average between May to June 2022. This marks a sharper rate of increase than previously seen across the previous two three-month periods, undoubtedly catalysed by the uniform spike in COE prices.
As mentioned earlier, the catapulting of Category A towards its all-time high has sent prices of cars like the Toyota Corolla Altis hurtling towards $150,000.
Nonetheless, bear in mind that the 8 per cent rise still pales in comparison to the 13-15 per cent increases for COE premiums across all three categories taken in isolation for the same period. Against the record premiums seen in recent months, it thus appears that dealers have been trying to buffer customers through slower rising retail prices in a bid to lure them to showrooms.
Most popular used cars: June 2022 to August 2022
Over the three-month period between June 2022 to August 2022, these were the five most listed used cars on Sgcarmart.
| Model | Year of registration | Average depreciation (approx.) |
| Honda Vezel 1.5A X | 2016 | $13,954/yr |
| Honda Civic 1.6A VTi | 2018 | $13,701/yr |
| Mercedes-Benz C-Class C180 Avantgarde | 2017 | $19,570/yr |
| Mercedes-Benz C-Class C180 Avantgarde | 2015 | $20,853/yr |
| Mercedes-Benz C-Class C180 Avantgarde | 2016 | $20,186/yr |
The sheer might of the previous-generation Honda Vezel in the pre-owned market should no longer be surprising, but the unavoidable spillover of rising new car prices into the used car market is continuing to make its presence felt.
At close to $14,000 per year, the annual depreciation of the aging crossover is now on par with what one can expect when buying the current-generation car brand new (this includes the HR-V as well – the variant sold by authorised Honda dealer, Kah Motor).
Apart from the persisting strength of the FC Honda Civic 1.6A, the rest of the top five is dominated by the Mercedes-Benz C-Class C180 Avantgarde, registered across 2015 to 2017. Merc’s Cat A friendly GLA180, registered across 2019 and 2020, was also among the top listed used cars in June and August.
ALSO READ: COE renewal – should you choose a bank loan or in-house loan?
This article was first published in sgCarMart.
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