Is this the best time to renew your car? We have seen months of decline, in fact, the whole of 2018 till now has seen monthly declines, with exception of May to June Cat A, where there was a small increase of only $22! The only increase of the year was $22, but the fall has been dramatic!
If you recall, January 2018 Cat A was at $42,970 and Cat B was at $52,271! Compared to the latest prices, it is a real bargain to now!
Which begs the question, “Is November 2018 the best month to renew your COE?”
A customer has called up to ask about our COE renewal loan and said that it’s fine even if their car expires in February 2019, he’s happy to renew in November 2018 as he feels it is low enough, and that even if he loses the remainder of his old COE (which is forfeit by LTA) he is alright with it. We offered to monitor the PQP for him when we spoke to him over the phone, and he has already signed up with us to do the renewal, but he said again that he is OK to pay November’s COE PQP! Only after another round of discussion did we convince him that there is no loss, only possible gain, for us to monitor the PQP for him. But that is another story…
The question is why does he feel it is OK to pay November’s price? Is it because…
The COE Is Expected to Go Up?
This is the only logical reason to jump in right now, pay the current price because the coming months COE renewal price is going to be higher. It makes no sense to pay now when next month is going lower, and you also benefit by having a longer COE life on your car – the later you renew the later the new COE starts and therefore the COE or rather the overall life of your car lasts longer!
So pay now because it is lower? Do we go ahead?
There are also other factors you may want to consider. The latest car show at the Cars@Expo was a resounding success claims SPH in this article here. If Mazda moved 200 units and Volkswagen more than 100, and manufacturers such as Subaru launched the new Forester also attracting many interested buyers. Altogether about 1,000 buyers signed on the dotted line, and is this going to have a significant effect on the COE bidding coming up in the month of November!?
Are we going to see then a rise in the COE bids? Cat A’s fall to the current $25k level has certainly made the buying prices look quite attractive. My personal feeling is that Cat A looks more attractive now than Cat B, and should see more sales having closed in the Cat A segment of the market. (We don’t have the actual figures for that now)
And Our Prediction?
If my hunch proves to be correct, then Cat A should see a slight rise in the COE level in the coming two to four bids even with the increase in COE quota, while I do not see as strong a showing for Cat B. However, this comparatively weaker demand for Cat B COE may still result in a steady or slightly lower Cat B price, given that there is marginally less Cat B COE quota – by 58 pieces – for the months November to January as announced by LTA. More info on the COE quota for November 2018 to January 2019 here in this Today article.
A possible slightly lower COE level for Cat B even after a bustling motor show? Yes, because the increased COE quota in the months August to October is already higher than the previous quarter, and this coming quarter leading up till January is only small 58 Cat B COE less.
So It Is Wiser to Wait?
We always say it’s like the stock market, you predict one way and it can go another. But we have to say, the best way is to sign up with us for PQP monitoring service – that way you get the choice of paying the currently known November COE renewal price or a lower December price if it does go that way.
Why? Because we can calculate and tell you December’s PQP price by the second bid of Novemeber.
For more info, contact us using the contact form on the right, or simply hit the call button to reach us during office hours.