The Certificate of Entitlement (COE) prices in Singapore has witnessed yet another significant surge in the September 2023 1st bidding exercise.
The most notable aspect of the September 2023 COE results is that prices have increased across the board for all categories, except for motorcycles. This includes categories for cars (Category A and Category B). As of current, it has continued a record-breaking run to $101,000 and $134,889 for Category A & Category B cars respectively.
Reasons Behind the Surge
Several factors contributed to the surge in COE prices:
- Limited Supply: Singapore's COE system operates on the principle of supply and demand. A limited supply of COEs for each category of vehicles meets the high demand from prospective car buyers. This limited supply has intensified competition during bidding exercises, ultimately driving up prices.
- Economic Factors: With the zero growth policy in car population and rising incomes, COE prices will trend upwards. The demand for cars have not dampen since the pandemic, and with the surge of rich and affluent individuals, a similar trend is expected to be observed, as with increased rental prices.
- Speculation & Investment: Some buyers view COEs as an investment opportunity rather than a means of vehicle ownership. When they anticipate future price increases, they may enter the market to secure COEs with the intention of selling them later at a profit. This speculative activity can further inflate COE prices.
Impact on Consumers
The surge in COE prices inevitably affects consumers in various ways:
- Opt for Car Sharing: With higher COE premiums, the overall cost of purchasing and maintaining a car will no longer be affordable to an average Singaporean citizen. Individuals or families may consider switching to car sharing companies like BlueSG or Getgo to rent a car instead.
- Increase in Resale Value: Car owners can opt to sell their used cars and cash in on high COE prices, which may cover the cost of COE on their next upgrade (also depending on car bought).
- Switching to Alternative Transport Modes: Previous car owners may choose to sell their cars away and transition to public transportation like MRT and buses, or ride-hailing services like Grab or Gojek.
If you've got questions about COE prices or any car related questions, feel free to join our car community Cult of Cars. We have a bunch of car enthusiasts that are more than happy to answer any questions that you may have, or even lend you assistance to drop off/pick up your car, help you with calculating car finances, or tow service contacts if your vehicle breaks down.
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