COE Renewal Price Cat A, B & C | March 2021 PQP Results
I know the caption on the above picture, but here’s the report: prices for COE bids in the month of February have somewhat moderated for Cat A and Cat B, which could possibly be due to the completion of before New Year car deliveries. The first bid of February was the last bid possible for delivery of vehicle before Chinese New Year season.
And you can see pricing further ease in the most recent bid on 17th of February, after the holiday, likely due to showrooms remaining closed for a longer period and collecting no further orders for placing COE bids.
COE Bidding Result 2nd Bid February 2021
Cat A $41,001
Down by $999 (-2.38%) in the latest bid.
This is a reduction in price, but still above the price of the very first bid of 2021. Cat A opened the year at $40,609.
However, this marks the second round it has eased off and potential new car buyers who need a car soon may want to keep an eye on this to plan when they would like to step in to buy.
Cat B $46,002
Down by (-1.68%) or $788 compared to the first bid for February 2021.
This remains largely the same as the last bid. Even with Chinese New Year delivery rush over, it seems to want to stay at this price in the $46k range. The previous bid closed at $46,790.
Cat C $40,890
Down by $4,111 (-9.14%), a pleasant relief after the last two which jumped approximately $5k per COE bid, to go from $35,900 at the start of the year to $45,001 by the first bid of February 2021.
This is the first time in 2021 that the prices of Cat C have gone down. We are actually a little surprised, pleasantly so, by how much it has lost ground, given that the current COE quota for Cat C is quite tight. The reduction in the current COE quota quarter lasts from Feb – Apr 2021, with only 255 Cat C available per bid this quarter.
So where is the bull? It’s in the longer term trend, and we feel it is still intact.
Will the Bidding Prices Ease Off In The Coming Months?
We reported in our late December 2020 article that one of the reasons we foresee that would cause a easing off of prices would be the end of “before Chinese New Year” vehicle deliveries.
Now that the main CNY celebrations are over, we have already started to see prices easing off, both for Cat A and Cat B. Cat C is lower, but we feel it is mainly for another reason: Buyers are price deterred.
Buyers Price Deterred
What do we mean price deterred?
When the prices rise quickly and sharply, dealers have trouble delivering the existing orders as they are out of the money – i.e.: if the buyer does not agree to a COE top up, the dealer will lose money delivering a vehicle. If the deal is not on guaranteed COE bid, a dealer will drop the deal rather than deliver in these cases, and there will eventually be less bidders as buyers fall out due to price.
And we have been hearing these stories from a couple of commercial vehicle distributors and dealers – buyers are saying they will stick with their old vehicles for a while longer, or repair them and renew the COE, which now make more financial sense, given that it will still be cheaper than buying new at a high COE level.
This is especially true for company vehicles used by workers; luxury and comfort are not a high priority, only usability is.
Our theory is that sharp COE rise deters commercial buyers more than private car buyers, and this is possibly the reason for the latest 9.14% drop in COE prices for Cat C.
Cat A and Cat B Buyer Mentality
Private cars in Cat A and Cat B are occupied by a different sort of buyer, and especially Cat B luxury segment, often it does not make much of a difference if the COE price is higher, especially for the uber luxury cars.
Cat A however, may have a significant segment of buyers that are more price sensitive, and will not enter if the COE has gone too high. Not that Cat B does not have such buyers, but far fewer of Cat B buyers are as COE price sensitive.
Our Feel For the Coming Bid of March 2021
Some Support Some Consolidation
Looking through that above lens and for the short term, we see Cat B stabilize around where it is (as evident in February’s two bids) as a sign of support.
But for Cat A we see a little more consolidation for Cat A till it looks a little more attractive to buyers.
When prices reach a more attractive level, probably below $40k, you will see more orders for Cat A cars again and support for it to rise.
Cat C may start to rise again one/two bid from now as some orders come in for commercial vehicles where the buyers have no choice but to replace them due to vehicle lifespan issues or other unavoidable factors.
Caveats To The Above View
In the near term, if short term prices remain above $40k for Cat A (now up till end April), and if the next quota quarter (May – Jul 2021) has a tightening quota, then this will cause prices stay above $40k level for Cat A for the longer term if there are no other large mitigating factors that come about.
The next quota quarter’s number sort of depends on the number of cars scrapped in the current quarter. Sort of, because there is a one month delay. Example: The quota for May to July quarter will be determined by scrap figures from January to March.
End of COE Quota Redistribution
You may be aware that the COE that was not bidded during the three months of Covid-19 shut down is still being distributed into current bids.
But from July 2021 onwards, we are staring at another reduction in COE quota as the COE redistribution stops and we will have less COE across all categories of COE:
Cat A Less 430 COE per month
Cat B Less 432 COE per month
Cat C Less 156 COE per month
Cat E Less 147 COE per month
PHV Situation Simmering In the Background
Another thing that can upset our above prediction of a lower Cat A is the need for private hire vehicles (PHV). We do have a significant population of private hire vehicles in Singapore doing Grab, which was said to have reached 77,141 vehicles in 2019. This far outnumbers the number of taxis on the road. More than 1-in-10 cars is a PHV – roughly 12% of all cars on the road are registered to provide private hire services.
Many of those are above 10 years old. And all of those are above 10 years will be barred from doing private hire service by Grab by 1st July 2022.
Since this news was announced late last year, Cat A has been on an uptrend.
We believe that the effect of this was at the beginning, when it was first announced late last year and early part this year, and the effect should also peak as it nears the ultimate deadline in 2022. So this effect may not be felt so soon and is cooking over a longer term.
One mitigating factor is that Go-Jek still allows older vehicles in its service, though it is not impossible that the LTA restricts all older vehicles for PHV officially. We wait to see whether that will be.
As it is, there is already industry wide PHV rules just introduced, such as the need for yearly mandatory vehicle inspections, even for brand new PHV.
Results for COE Renewal Price March 2021
And finally, coming to those who want to know what the COE renewal rates are like for next month!
The below are the 10-year COE renewal prices for February 2021 for cars coming to the end of their 10 year COE. Divide the below by two for 5 year renewals, but is 5 year COE renewal good?
Tip: remember that you can renew your car before the actual month of their expiry! To find out more on how to save on renewal, click here.
Cat A $41,397
Up by $1,553 (+3.90%) for March 2021 renewal, compared to February 2021 COE renewal price. This is the sixth straight increase for Cat A COE renewal prices.
Cat B $47,701
Up by $2,115 (+4.64%) compared to the renewal price of February 2021. This is also the sixth straight increase for Cat B COE renewal prices.
Cat C $38,480
Up by $4,009 compared to the PQP of February 2021. This is another big +11.63% increase after the $1,672 increase in the last month.
This is a very large and painful increase that has seen some van renewal plans abandoned but owners. But you need not fret, there is still time (within Feb 2021) to contact us to get it done at $34,471
This is now the fifth straight increase for Cat C COE renewal prices, and it looks like it will continue going up. Call us (during office hours) for advice!
COE Renewal With A Difference
If you are looking at COE renewal coming up, you will be glad to know we have helped hundreds and we will also help you also to secure an advantageous loan with the best terms and conditions avoiding the common pitfalls, and also to know when to renew if you register early with us for PQP monitoring as our customer.
That’s not all we help with – you also get to choose from all available banks and finance houses for your COE renewal loan, and we explain the benefits of each one to you if you’d like to know, before you pick the one that is most helpful in your situation.
Did you know? Sometimes a lower interest rate loan can cost more than a loan with slightly higher interest! But we will be here to assist, so don’t worry!
We sincerely hope that you pay a lower COE renewal price and get a loan with good terms and conditions, and to that, all our past customers can attest!
Click to WhatsApp if you have any queries or call 92782880 (during office hours). Or simply use the contact form on this page and we will call you back to assist.