Fewer COEs to Bid For As More People Hold On to Old Cars,

With more people looking to extend the lifespan of their cars, the number of deregistrations for the August to October quota period are expected to have a significant drop. This means there will only be an average of 8,613 COEs per month for the next quarter, about 10% lower compared to the 9,634 average from May to July.

COEs for cars up to 1,600cc and 130bhp will see a 9.4% dip in supply (down to 4,016 a month). Cars above 1,600cc or 130bhp will also see an 8.6% drop (down to 2,672 a month). Finally, there will only be 857 COEs a month for the Open category, which is 16.6% fewer than in last quarter.

These drops in supply can be attributed to the 20% of car owners who chose to revalidate their COEs during the first quarter. In the second quarter, an even larger percentage may have revalidated their COE.

Meanwhile, commercial vehicle owners should expect a 23.2% fewer COEs per month, partly because of the Early Turnover Scheme, where commercial vehicle owners are encourage to scrap older vehicles in exchange for newer ones. Because the COEs are only revalidated or extended, their COEs are not recycled.

Finally, motorcycle COEs will also see a 8.6% decline, down to 718 a month.

"COE revalidations have affected the quota. There will be pressure on premiums," said Motor Traders Association vice president Eric Chan.

However, some feel that there should nothing to be alarmed about. Kah Motor general manager Mr. Nicholas Wong said the full year supply should still be around 90,000 to 100,000.

Meanwhile, Mr. Neo Nam Heng, the chairman of diversified motor group Prime, said that prices will stabilise if people do not panic.

While many have expected fewer COEs by the third quarter, some were still taken by surprise.

Nissan agent Tan Chong Motor's general manager, Mr. Ron Lim, said: "I expected a cut, but not this big a cut. I guess more people are revalidating their COEs."

Aside from having fewer COEs, other factors such as the rising value of the Japanese yen combined with the economic slowdown and rise in interest rates are expected to contribute to a rise in premiums.

Credits: