COE prices surged toward $90,000 in late August, with Category A premiums nearing the peaks last seen for 'mass market cars' in 2013. Meanwhile, Categ
COE prices surged toward $90,000 in late August, with Category A premiums nearing the peaks last seen for ‘mass market cars’ in 2013. Meanwhile, Categories B and E shattered previous records; the Open Category (Cat E) hit a new high of $114,001 in late July, and Category B for larger cars reached $113,000 in early September.
As a result, the July to September average for Cat A COE prices was 15% higher than in the previous quarter. Premiums in Categories B and E also saw substantial growth, increasing by nearly 13% and 14%, respectively.
In response to rising prices and growing public discontent, the Land Transport Authority (LTA) introduced measures aimed at reducing price volatility. Starting in August, the LTA altered the COE quota calculation method, basing it on a rolling average of vehicle deregistrations over the past six months instead of the previous three-month method. This adjustment increased the total COE quota to 10,581 for August to October, compared to 9,394 under the old system. However, this still represented an 11.5% reduction from the May to July period.
Despite these efforts, demand for COEs remained strong, spurred on by events like Cars@Expo, and premiums have continued to rise. Prospective buyers should remain cautious, as while the new system may stabilize price hikes, significant price drops are also unlikely. Rising interest rates from the U.S. Federal Reserve may also make car loans more expensive.
Vehicle Deregistration and COE Supply Forecast: Our latest analysis, incorporating the new calculation method, suggests that COE supply will shrink again for the November 2022 to January 2023 period, with an overall reduction of 11% projected. Category A is expected to see the steepest decline, with a projected 16% drop from the current monthly average of 1,086 COEs. Category B may also experience a 13% decrease in its monthly COE quota. Only Category E is expected to see a modest 8% increase in supply.
New Car Pricing: July to September 2022 Sgcarmart’s analysis of popular models from authorized dealers shows an 8% increase in new car prices from the previous quarter. This is a sharper rise than seen in the past two quarters and is directly linked to the uniform spike in COE premiums. For example, the price of a Toyota Corolla Altis now hovers around $150,000. Despite the sharp rise in COE premiums, dealers appear to have moderated retail price increases to attract buyers to showrooms.
Most Popular Used Cars: June 2022 to August 2022 Over the June to August 2022 period, the five most-listed used cars on Sgcarmart were:
Honda Vezel 1.5A X (2016): $13,954/year depreciation
Honda Civic 1.6A VTi (2018): $13,701/year depreciation
Mercedes-Benz C-Class C180 Avantgarde (2017): $19,570/year depreciation
Mercedes-Benz C-Class C180 Avantgarde (2015): $20,853/year depreciation
Mercedes-Benz C-Class C180 Avantgarde (2016): $20,186/year depreciation
The enduring popularity of the previous-generation Honda Vezel in the pre-owned market is unsurprising, although rising new car prices have caused spillover into the used car market. The annual depreciation of the Vezel now rivals that of a brand new current-generation model, including the HR-V variant. The list also highlights the strong showing of the FC Honda Civic 1.6A and the dominance of the Mercedes-Benz C-Class C180 Avantgarde from 2015 to 2017.
Merc’s Cat A-friendly GLA180, registered between 2019 and 2020, was another top-listed used car in June and August.
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