COE Quota to Increase; Will Car Prices Finally Fall?

To recap, for the current COE period of November to January, the quota was set at 11,932, while for the period from February to April, the quota is at 14,114, an increase of 18.3%.

Category A COE would see the largest rise in monthly quota during this period, rising from 1,396 of the previous to 1,973, a staggering 41.3% increase. Category B COE would also see a healthy increase of 26.9%, rising to a monthly quota of 1,444 from the current supply of 1,138. Category E COE, usually used for cars belonging to Cat B, sees a dip of 33.8%, from 527 to 349.

Looking at Cat B COE alone is not enough, as many Cat E COEs are used for Cat B cars. Combining Cat B and E, the total monthly quota from these 2 categories will benefit from a net increase in monthly quotas of 128 units, or 7.68%.

Also, with the recent round of COE bidding just over, COE prices throughout the categories have seen little change. While nothing conclusive may be drawn from this round’s bidding, it is possible to predict the possible outcomes of the February-April COE quota increase, which will definitely bring car buyers good news they have been hoping to hear for a long time.

There is no doubt that Cat A COE will definitely see a dip in prices as supply increases, it is also predicted that the latter few rounds of bidding for the February-April quarter will see more significant dips than the first few rounds. There is no doubt that there will be high intial demand, but it will likely taper off as eager buyers get their hands on their new cars in the first few bidding rounds of the quarter, causing prices to fall in the latter rounds.

Despite Cat B and E COE together see little increase in supply, it still is comforting to note that prices are expected to see small dips in the coming months, not heading north back above $80k soon.

Experts and new car dealerships are optimistic that car sales in the upcoming quarter will be brisk, especially for cars in Category A. The recent Singapore Motorshow also saw the launch of many mass-market Cat A cars, such as the Citroen C4 Cactus, Mazda 2, and even the Volkswagen Scirocco.

This increase in COE supply is definitely good news, and the forthcoming February to April quarter will be one of the most opportune time to buy a new car in the past year or more.
As new car prices fall and sales pick up, used cars dealers are expected to play catch up too, offering great deals to match.

Therefore, not only will new car prices see a fall for the next COE quarter of February to April, especially those from Cat A, the domino effect will result in used car prices seeing a dip too. For car buyers looking at buying a new car, there is no better time than in the next few months.

Car buyers keener in used cars would need to note that there may likely be a time lag between the dip in new car prices, and subsequently, the fall in used car prices.

Either way, the increase in COE quota will be eagerly awaited not only by those looking for new cars, but also car buyers after used cars too.

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