COE Renewal Price | PQP Prediction for August 2021
The latest COE bidding closed with a mixed bag of results for Cat A, B, C.
Small cars category went down, large cars remained almost the same, and commercial vehicles went up.
The soft Cat A results, are they a sign of things to come or is this just a fluke?
But then Cat C is rose a tidy amount. So, what is the situation now?
Cat A $45,001
This latest bid is a reduction of $2,820 or (-6.26%) from the previous bid.
We mentioned before that this is the basic COE category, and anyone who needs a car will at least need to bid at this category if he or she needs a car.
But it has gone down. Are we looking at weak demand for small cars, despite the smaller COE quota which is 6.17% reduction this May to July quarter, compared to the last one (February to April)?
The Cat A COE price went down 4 out of the 5 rounds for bidding that has closed for this quota quarter. Since the start of May, only the 9th of June bid was up, but that was a strong increase of $6,709, likely due to the 3 week bidding cycle.
One last bid of July 2021 remains for the current quota quarter and final bidding on this quarter will close on the 22nd of July this time, a Thursday, due to the Hari Raya holiday on the 20th of July.
Cat B $56,100
Large cars Cat B went up, marginally, by $68, equal to just (-0.12%).
Since the last bid of June, which was the final opportunity to get a COE to register before the VES kicked in for large cars that fall into Band C of the emissions testing.
But as explained in our previous article, it seemed the dealers had stopped promising buyers on time registration before July to avoid the extra tax. And so, they were more relaxed on the COE bidding and what we saw was the actual demand and pricing moving forward.
This has proven to be true, and we are still at the same $56k level, same as in the second bid of June. Not much of a change at all.
Cat C $38,900
Commercial vehicles Cat C went up, by $1,900 which is (+5.14%) above the previous bid.
Cat C has been having a downtrend since the start of the current COE quarter in May. And this downtrend has carried on for four bids prior to this latest bid which went up. The downtrend was in spite of a sharp reduction in the number of COE for this category, down by 38.55% compared to the previous quota quarter.
Why did the COE bids not increase in the face of reducing quota? More on this below.
Are The Signs Of A Weaker Economy Finally Showing?
We here have been predicting the rise of COE prices and PQP as well since that depends on COE bidding prices. And because of our predictions, some readers have said we don’t know the state of the economy.
We are not living disconnected from the real world. To those who have remarked that the economy is not really that healthy, we say, yes, we agree!
But, is the less than ideal economy a sure sign that the COE will be headed south?
Fact 1 Affecting COE: Since we came out of CB (Circuit Breaker), the current COE price levels are much higher than before CB.
And many cannot imagine how it could be, since the economic pain is real. And we do agree that many are finding it tougher, and cut backs on discretionary spend is the norm for some people now.
But this period since CB in 2020 has also coincided with a shrinking COE quota which fits the 10 year COE cycle pattern. And we can also see from LTA’s announcement that COE numbers are getting smaller.
This seems to be the main factor that has caused the COE levels to rise since CB.
So while times are hard for some, we also see that…
Fact 2 Affecting COE: There is a part of our population for whom life goes on as normal, and another part where they are doing even better because of Covid.
You know, stuff like GrabFood. Cannot eat out, just order to have it delivered. Hint: Demand for motorcycles is up! And we see record high bike COE prices.
And grocery shopping? Online grocery shopping is doing great, and brick and mortar shops doing just as well! Sheng Siong staff had a record 16-month bonus last year, and this had been the subject of popular memes.
Online shopping is doing better than before and that also means logistics delivery drivers have jobs that will be there for them. Read as: demand for vans is steady.
Fact 3 Affecting COE: So long as there are those who do well enough to pay the current price for COE, the prices will stay there.
And with less COE, less people need to be able to pay the price for the COE bid prices to remain where they are. If it happens that the COE quota shrinks to less than the number of people who are able to afford it at a given price, then well, the price goes up beyond that $x.
But if there are less who are able to bid at the current price, then logically, it should go down.
So is our bullish COE trend now losing steam and starting to go the other way? Maybe, but that will depend on…
Fact 4 Affecting COE: The price will depend on the number of quota released each quarter versus the number who are bidding.
So, without doubt, we here at SG Cash N Cars can see further reduction in COE quota coming up, and really soon. The next quota quarter announcement for August to October should be soon.
But the other factor in this Fact 4 mentioned above is, will the number of people able to bid at current pricing be outnumbering each bid’s quota or not? That will determine the the direction of COE the next three months starting August.
So while the quota shrink is something we are sure of, we are not so sure about how many car buyers will come in and book a car at current prices.
And yes, some car distributors are reporting quieter showrooms. So, there is a chance we see the bids drift lower at the next and last bid for July 2021.
However, as the COE quota quantity for August to October is going to be another step down, shrinking further, we do that see that there is much of a downside to the prices for the next quarter.
The Story For Cat C Van & Lorry COEs
After all that babbling above about supply and demand, and given that we earlier said that the Cat C COE had shrunk by 38.55%, why is it that Cat C COE prices went downwards instead of up in this current May to July quarter?
Does that prove our supply and demand theory is not working here?
Not really, and the reason is this – those who want Cat C vehicles have another way to register a brand new vehicle. By buying an old vehicle to deregister and using it’s ETS to register a new vehicle for the road.
This bypasses the need to bid for a COE. And people are incentivised to do as as ETS grants the buyer a COE at the reduced price, depending on what kind and how old the vehicle is when it is deregistered.
That’s The Short Story
The longer one is, as this progresses, the number of vehicles eligible for ETS will shrink and they will rise in prices till it makes no financial sense to buy to scrap. As sellers become unwilling to sell at low prices, then buyers will bid on COE again.
So it may still cause a rise later, but then when COE rises, people will look to scrap old vans again to get ETS for registration.
It’s a cycle.
But with this new Enhanced ETS scheme, the new vehicles to be registered need to be Band A (full EV) or Band B (petrol electric or some full petrol models) only.
You would have noticed many commercial vehicle models running on diesel have stopped selling in Singapore, such as the Mercedes Benz Vito. This is because the penalties have made their prices unsaleable, and many models are also not available to be registered under Enhanced ETS which only allows Band A and Band B.
Nissan has also opted to sell the petrol version of the NV350 instead, believing that it will be more competitive due to the rebate compared to the diesel version.
COE Renewal Price Prediction for August 2021
So this is what you came for, will it go up or down the next bid, given quieter showrooms and slower economy versus shrinking quota, which will win?
Knowing the price will help you decide on the COE renewal month, and if you pick the right timing, you can save yourself potentially thousands!
Contact us by clicking on WhatsApp or using the contact form, and we will reply you and give you the password and link to view our predicted prices.
What Should I Do Now If I My Vehicle COE is Expiring Soon (Aug to Oct 2021)?
Given the situation that COE Renewal PQP prices are changing every month, you know that there is an opportunity to renew at lower price than your expiry month.
So, if you have decided to keep your current car, and renew its COE, the best thing to do is to get in touch with us as soon as possible – call 92782880 (during office hours), or click on the WhatsApp or fill the form on this page and we will get back to you.
COE Renewal With A Difference
We have helped hundreds and we will also help you also to secure an advantageous hire purchase car 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. Sometimes a lower interest rate can cost more than a loan with slightly higher interest!
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.