We are quite a bit off from the actual COE renewal price in the prediction which we made for the month of June 2019 in our previous article.
We are not happy that we missed the mark and failed to foresee the sudden sharp decline in the latest COE bid, but that’s good news for you guys wanting to renew your COE, as our predicted massive rise in prices was actually too much over the actual results. These are the latest prices for COE renewal PQP for the month of June 2019.
PQP Result For The Month of June 2019
PQP Cat A Up, $29,839
Up by $1,953 compared to Cat A PQP of the month of May 2019.
“A second consecutive largest increase for Cat A for the past two years plus period” was what we said in our prediction earlier this month. And this remains true even though the increase is not as high as the predicted $3,602. However, this increase in June remains higher than last month’s increase of $1.7k.
PQP Cat B Up, $43,007
Up by $3,444 compared to Cat B PQP of the month of May 2019. After a $4k increase last month, the PQP increase seems to have slowed but remains hefty considering that two months ago the PQP for renewal was only $35,411. June PQP is still a significant increase all car owners looking for renewal would rather not have!
PQP Cat C Up, $28,264
$445 up, compared to Cat C PQP of the month of May 2019. This is the closest of our predictions and we are $66 off the actual. This increase is lower than last months increase, good then, however, it is still more than the value of what one month’s COE is worth – our measure of whether one should go ahead to renew in an earlier month or not.
Overall Outlook In The Remaining COE Quarter
There is no doubt that the increase in available COE for Cat C has been favourable in the current COE quota quarter of May to July for softening up the Cat C for van owners, leading to two consecutive falls in Cat C once the increased COE quota has come into effect for May.
However, for Cat A & B where the quota is actually tighter than the previous COE quarter, the results have been mixed in May with a rise, and then followed by a sharp fall in both Cat A & B in the second bid of May 2019.
I must say the first bid rise was expected but the fall not unexpected, but the degree by which it has fallen is sharper than what we felt was coming.
(For more info and stats on the COE quota that was announced, we wrote about it here.)
This fall in the second COE bid of May must be a case of too much too fast. Many customers looking to purchase new cars would have started to consider postponement of their purchase of a used vehicle, seeing the list prices from all the showrooms rising in tandem with the COE.
Dealers would also have stopped bidding higher as their profits from pre-booked non-guaranteed COE orders turned unprofitable in face of the massive sudden increase in prices.
This drying up of demand has resulted in a sharp fall for the second bid of May. For a sustained rise in price, consumers need time to adjust and acclimatize to the new pricing, and be prepared to spend that amount they had in mind for a new car.
This correction may lead to a moderate increase in showroom traffic as list prices reduce. Also, a sigh of relief for many dealers who are now able to deliver on secured orders which they would otherwise have to ask for COE top up or refund deposits.
In light of the current economic situation, I suspect the majority of customers would not be in the mood to top up.
We expect to see the first bid in June to have some support and remain stable or slightly lower, but as traffic goes back to showrooms and with a slight upward trend in the second bid of June as order start to fill again. This should be true for both Cat A & B.
Cat C should remain soft from the increase in quota still for June and July 2019.
What Should I Do If My COE Renewal Is Coming Up?
In the longer term, the COE is still on the uptrend as we are headed into the leaner years of lower COE quotas, and this time we are going in with 0% growth.
We are looking at the trend and see that the for July renewal, it will once again be up for Cat A & B, with a bigger rise in Cat B (probably four figure again) than Cat A (in the hundreds).
The only one to benefit would be commercial vehicle owners as Cat C is expected to decline for July renewal. So those with expiry coming in July, you can rest a bit easier and just wait till June is over before renewing. But note, commercial vehicle owners with expiry in June should renew using May PQP.
But if you have a Cat A or Cat B vehicle for with renewal coming up in June and July, do consider to renew in May, it would be to your benefit. Trend remains up till July month and maybe beyond.
Those with cars expiring later than that, stay tuned to our monthly predictions and announcement of PQP results!
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