It’s been a time of unstable COE bidding prices – how does all this factor into COE renewal for the coming month of July 2091?
With sharp rise in prices in Round 1 and 2 bidding of April 2019, and the rise for Cat A continued into Round 1 of May while Cat B remain largely flat, retaining the high of $48k that was reached, what should we expect coming up next?
The picture for April bids was of a sharp rise, but that has since tapered off, and gone in the opposite downwards direction, just as sharply for Cat B and even sharper for Cat A as it fell $9,704 to end at $27,000 (down from $36,704) in the second round of May 2019.
What’s Going On With Unstable COE Bidding Patterns
And if you think that this was due to over-enthusiastic bidding and FOMO (fear of missing out) that caused a sharp rise and then a sharp fall, well, it bounced back up again for Cat A after the sharp fall in the latest June 1st round bidding exercise. The unpredictability even caught us unawares, and our prediction missed the mark by a fair margin – see here for June COE renewal prices and how far off we were.
However, the Cat B continued to ease of as did Cat C for commercial vehicles.
The shrink in Cat A and B quota for the quarter started in May may have partially explained the sharp increase, but does not gel with the fall that came after the rise in the second bid of May 2019. As the quota available for bidding still remains unchanged (June being still in the same quarter as May), we can only conclude that the other side of the equation – the demand side – had resulted in the fall.
The rise had made sales of new vehicles so unpalatable to buyers that it had slowed to a trickle to result in a sharp fall. Dealers would also have held back as bidding further would mean unprofitable deals for the orders in hand. This should also explain the bounce back in Cat A to $30,009 in the latest bid, as the orders in hand at dealerships looked in the money at those levels, being the orders taken in at or around the time of April’s 1st bid which was at $29,159.
Just about the only thing that was predictable was the slide in Cat C prices, given that this quarter has added COEs for this segment, and I think we will continue to see it fall to even more favourable prices before a bottom is reached.
What About The Coming Months?
We are inclined to think that with a longer term outlook of 18 months, COEs are still on the uptrend, simply because of one reason, the 10-year cycle. It’s a matter of time before we get to the time where the ramp up due to smaller quota is inevitable.
What can tamper the rise is a soft market with slow demand for cars – not impossible given the soft economic situation. But as for the supply quota side, we are looking at an expected tightening.
How Does This Affect COE Renewal Prices?
Here are our predictions for the month of July 2019 PQP
PQP Cat A Up, $30,912
Up by $1,073 compared to Cat A PQP of the month of June 2019.
This increase is less than the $1,953 going from May to June and there is a small chance those whose renewals are near the start of 2020 should not jump in yet, but should monitor and wait, given that the current value of the COE remaining should be a consideration in their calculations. (We can monitor and give you updates as it happens, so you know when to renew, if you register with us for your renewal.) However, those with expiry in July should take the opportunity to renew in June, to save this increase as your expiry is close.
PQP Cat B Up, $43,917
Up by $910 compared to Cat B PQP of the month of June 2019.
After a $3.4k increase last month and a $4k increase the month before that, the PQP increase has slowed but this is still a significant increase and those whose expiry is in July we would also advise to take the opportunity to pay in June to get some savings.
PQP Cat C Down, $27,708
$556 down compared to Cat C PQP of the month of June 2019.
This is the most predictable of all the Categories and for those whose expiry is only after the month of June, it is easy to recommend confidently that you should wait for the next month or coming months if your expiry is still some time away.
We Can Help With Your COE Renewal At A Good Time
Are you disappointed that although COE bidding has fallen the PQP still seems to rise? That’s the way the PQP works, as it is an average of the past 3 months of bidding that makes up next month’s COE renewal price.
If you do not have the time to figure out how this works, but still want to renew at a good time and not pay more for the renewal than you have to, just leave us your info using the contact form or Whatsapp us (if you are browsing with your phone) for help. We would be happy to assist you with the COE renewal process, including COE renewal price monitoring, loan application and approval, payment at LTA, insurance, conversions (example: Off peak car to normal plate – which are done at the same time for no additional admin cost), as we have done for so many who have come to us before!
Happy customers is our goal! Only with a job well done, COE renewed successfully and at an advantageous time for you will we be happy!