COE premiums mixed on 4 Dec: Category A up, Category B and motorcycle prices fall

Certificate of Entitlement (COE) premiums closed mixed during the latest bidding exercise on 4 December 2024, reflecting varying demand across vehicle categories.

For Category A cars, which cover vehicles with engines up to 1,600cc or horsepower not exceeding 130bhp, premiums rose to S$94,000. This marks a significant increase from the previous exercise’s S$89,889, reversing a 10 per cent drop recorded in the round prior to that.

In contrast, premiums for Category B vehicles, including larger and more powerful cars, dropped slightly to S$103,010 from S$105,081. Open category COEs, typically used for larger vehicles, also saw a decrease, closing at S$104,001 compared to S$107,501 in the last round.

Commercial vehicle COEs, which cover goods vehicles and buses, rose marginally to S$70,289 from S$69,000. Meanwhile, motorcycle premiums fell sharply, closing at S$7,878 from S$8,669 previously.

A total of 3,655 bids were submitted in the exercise, competing for a quota of 2,684 COEs.

This bidding exercise comes amid broader developments in the COE system. In October, the government announced plans to progressively release up to 20,000 additional COEs across all vehicle categories starting in February 2025. The extra quota is attributed to advancements in traffic management and changing travel behaviours.

According to the Land Transport Authority (LTA), the upcoming implementation of the ERP 2.0 system will improve traffic congestion management, allowing for an increased supply of COEs. Additionally, post-pandemic shifts, such as a rise in flexible work arrangements, have reduced private vehicle mileage over the past five years.

Transport Minister Chee Hong Tat addressed parliament on 12 November, clarifying that the injection of 20,000 COEs is not tied to potential distance-based road pricing, though the ERP 2.0 system provides the option for such measures in the future.

“We have not made a decision on whether to implement distance-based charging,” said Mr Chee. “We will need to study this further, including with the data from ERP 2.0, as there are trade-offs we need to think through carefully.”

The additional COEs aim to balance vehicle supply and address traffic needs without prematurely committing to new pricing structures. Future reviews will consider ERP 2.0 data and evolving transportation trends.