COE Renewal In May 2020 | In The Midst of Covid Chaos
We have had quite a bit of interruption to our lives recently and this has extended to car COE bidding and COE renewals as well. LTA has taken unprecedented action to have bidding halted in the month of April 2020. Except for essential services, we are now down to the minimum in businesses that are open, told to Stay Safe and WFH.
Given the short and terse statement released by LTA on COE bidding, we could only guess earlier what was going to happen for May’s COE renewal and COE bidding in the months that follow, given that COE renewal prices are based on the average of previous three months’ COE bids.
Latest Update: Further news now confirms that the Circuit Breaker period will be further extended by one month to 1st of June has just been released last night. We take that to mean COE bidding will stop also for the whole month of May.
COE Renewal Price for May 2020 Is Now Set
With no April 2020 COE bids, out of the possible scenarios, our best guess when news of the halt was announced was that LTA will use the same COE renewal price for May 2020 – that is, the COE renewal for May will be exactly the same as April’s PQP.
This has now been confirmed by LTA.
With the pricing set, we can still renew COE for you, do contact us if you need COE renewal loan and we will be glad to assist, and we can do it all remotely, so that you do not risk your health running about to meet up with us! While we do like to see our customers face to face to present a clearer picture of the loan, we are now able to serve you over the phone and video calls to complete the loan without having to meet.
What About COE Renewal For The Coming Months?
We would have preferred if LTA took the more logical step of using four COE bids from the months of February and March and divided it by four bids for May to derive the PQP for May 2020 instead. This would have led to more logical pricing in the coming months.
Why do I say that? If COE bidding were to resume in May (but now looks unlikely due to the CB extension), then the prices for COE in June can be calculated by the four available bids from the past three months – since there is no April bid, that means the bids of March and May will be added together and divided by four to make up June COE renewal price.
COE Renewal Price for May Are Not Calculated Using The Usual Three Month Average
But since the LTA has take the step to retain the same PQP prices for May and keep it as it was in April, that leaves the question of what happens for June and July 2020 COE renewal wide open.
Why? If May PQP is not a calculated PQP, then logically, it follows that June PQP will not be calculated too, since June (and July) also require the COE bidding prices of April.
And given the latest news, that CB is going to continue till 1st of June, we are going to probably see no bidding for May 2020 and so the COE renewal price will remain the same as April’s for June PQP as well.
COE PQP: An Uninteresting Next Few Months
The above described is the most likely scenario we see happening in the coming months. It could be really uninteresting for us from here on as we do enjoy predicting the COE renewal prices to see how close we are to the actual. Our last prediction was April’s PQP, which we now predict we won’t be doing for the next few months!
The upside is this: there will be stability in the pricing (what the LTA wants), and the motoring public will know exactly what to expect if LTA were to announce that the price for COE renewal will remain the same throughout from April to August 2020 (both months inclusive) – five months of the same price!
COE Bidding Resumption Issues
“One this is for sure, we will make it through this” is a very common phrase being said nowadays. But we do wonder now, what will the world look like when we are out from the other end of this tunnel.
What I can tell is air travel may not be the same, and airlines and cruises may only end up as the companies you want to avoid investing in. Or at least until we have herd immunity from the virus , who knows how long it will take. Or until a vaccine is already available, and in widespread use for not just the rich who can get their hands on it first, but the general public.
Expected COE Bidding Price Fall?
But how about the COE? LTA will surely want to cushion the fall of COE from the complete lack of showroon traffic for two months, where car dealers and distributors alike have a grand total of zero sales & no new orders.
Or will there be pent up demand for cars after consumers have spend two months at home thinking about getting new set of wheels, and browsing numerous car pictures and considering specifications?
Question of How to Release Unused COE Quota
Also in our minds is, what happens to the quota that was supposed to be for bidding in April and May? We surely do not expect LTA to release that for bidding in the month of June, supposing that is when the CB period will end.
An article from the Straits Times has suggested that the quota will be either spread out in the remaining months of the year or even postponed to be open for bidding only next year in 2021. Surely, we want a chance at lower COEs, but the LTA’s concern is, as they have said several times, the stability of bid prices.
Only with time can we tell what will happen, but we can expect the authority to make use of the tools at their disposal to prevent a collapse of the COE prices – while it is bad for the consumer, it provides some cushioning for used car dealers holding inventory. We understand the LTA must always use a more balanced approach and of course also, retain the revenue they generate from COE bids.
What If Your Car Is Expiring 2020 June, July or Later?
Keep yourself fully in the know by registering your intent to renew your COE with us. We will monitor the situation and latest updates from LTA to keep you on the right track. Here’s some info on how you can save on COE renewals. We work with you to help you secure the lower price for COE renewal, we have always done that for our customers – we have the same goal as you!
We are still processing COE renewal car loans, albeit remotely and without physical contact.
For loan registration, feel free to contact us using the contact form, or call 92782880 during office hours or click on the WhatsApp button at anytime. We will try to get back to you as soon as we can!