COE Renewal Price | PQP Prediction for December 2020
It was announced in the news that the COE quota had been increased, but will this mean a lower COE price for new cars, and over time a lower COE renewal price? Over time, because PQP for COE renewal is a lagging average.
Most people think that quota increase will result in lower prices, and yes we have seen price reduction in latest COE bid for Categories A, B, C & E.
(Note: For those who are interested to read more about our prediction made in November 2020, do carry on. Those who are in a rush – the latest COE renewal prices for December 2020 have been announced, click here to read)
COE Bidding Result 1st Bid November 2020
Cat A $35,990
Down by $1,344 (-3.59%) in the latest bid. This latest Cat A is down slightly but with only modest increase in the quota to Cat A (see below) compared to other categories. Is this a sign small cars are less in demand now? Our take is this is normal, a small dip for a small quota increase.
Cat B $39,000
Is down by (-4.85%) or $1,990 compared to the last bid of September 2020. Cat B is showing strong buying support for the number of COE increase is significant (see below) and we are only seeing a very small dip compared to the number of COE added to this category.
Cat C $31,502
Down by $2,276 (-6.74%) compared to the last bid of October. This should not be read as the start of a down trend yet (too soon to say) and is likely a breather, after an almost $12k increase in prices from $22,002 (March 2020 2nd Bid) since the COE resumed bidding after CB ending at the high of $33,778 in October.
COE Quota News In Media
(The below percentages have been revised after this article was first published to fit LTA actual figures, as our projected COE quantity was different from LTA actual.)
It is reported that the increase is 7% (actual 6.65%) in the current COE quota quarter which will stretch from November to January, both months inclusive. But this is off a low base; a 7% (actual 6.65%) increase over a small number of COE may not significantly increase the available quota to lower the COE premium and COE renewal price to where you might want it to be. So this current latest COE bid, it may just be taking an intermission before prices stabilise again. We already see Cat B is well supported.
Why do we say this?
- The number of bids outnumber the available quota by quite a bit, and so demand remains, despite the current high unemployment rate.
- Cat A showed stability in the latest bid, down by a small percentage, after it’s recent high of $38,504 in September’s second bid. We are just $2514 from the high in end September.
- Cat B has a big jump in the number of COE quota, up by 16.48% (corrected figure) for average quota quantity for the quota quarter now up to January 2021, yet bid price only eased by -4.85%.
COE quota increase is not evenly spread across all categories
In fact, this is what we are seeing, with Cat A having only a slight decrease (corrected) while Cat B is having a bumper crop:
We See More Support For COE Coming
Up and coming factors also come to play which should feed into the demand for COE, such as latest ruling on Grab private hire cars. It is reported July 2022, all Grab drivers’ cars must be below 10 years old, and this will certainly have a positive effect on COE demand.
And the other factor is the retained COE that was withheld during the CB period, when there were no bids, and that is currently being released gradually will run out over the course of one year since bidding re-started. So, the above situation of increased COE quota will not last.
Also, over the longer term, those who look at the 10-year cycle for COE prices will have noted that the drought years are coming. So called “drought years” because of few COE available for bidding. The times of extreme high COE and low quota years were 2012 up to early 2013 and this should correlate to 2022 and 2023.
But there is also the possibility that this Covid-19 economic mess will stretch into an L-shaped recovery and not V-shaped.
So, which factor will prevail over the others, or will the result be a cancelling of the positive and negative resulting in COE prices remaining at this level for some time, is anyone’s guess right now.
COE Renewal Price Prediction For Decemeber 2020
Given the above are longer term effects which should not yet have an immediate effect, and considering just the shorter term factors, these are our predicted COE renewal price for the coming month of December 2020.
Cat A $37,022
Up by $547 (+1.50%) for December compared to November COE renewal price.
Cat B $40,447
Up slightly by $433 (+1.08%) compared to the renewal price of November 2020.
Cat C $30,767
Up by a significant $2,233 (+7.82%) compared to the PQP of November 2020.
COE Renewal Price Is Up For Every Vehicle With More Than Two Wheels
Again we see rising COE renewal prices in the face of latest reduction in price in the COE bid prices. Why is this? This is the lagging average we spoke about in the very first paragraph, because the COE PQP renewal price is made up of the average of the past 3 months prices, so COE bids takes it’s time to work through to appear on the PQP.
If you have a car coming up for renewal in December 2020, this above is very likely what you will be facing, and if you are confused as to what to do to save money in the face of this impending price increase, do feel free to contact us! And what if your car is expiring in January or February of 2021? We here for you on that too.
COE Renewal With A Difference
We have helped hundreds and we will 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. 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.