COE Renewal Price | PQP Prediction for February 2021
In our previous COE renewal price update end of December 2020, we were speaking of how the prices have gone up and stayed up and the factors as to why it was staying strong.
With our bullish outlook, the first COE bid of 2021 has gone… sideways! Well nearly sideways, it is not exactly the same price as previous bid, but the price has remained largely the same.
These here are the results of the latest COE bid, and after that, we can go a little into what you should do if you have a car that has COE renewal coming up or are entering the market to buy a new car.
COE Bidding Result 1st Bid January 2021
Cat A $40,609
The COE for Cat A has remained about the same for two bids now, with the last bid of December 2020 being down by $158 and now the latest bid, Cat A has risen by only $53 or +0.13% this time. The relatively mild change in prices for two bids in a row seems to indicate the market is accepting of the sharp increase in price from $35,990 (first round Nov 2020 bid price) to $40,714 (first round Dec 2020 bid price) in only two bids and is being supported at around this price.
Cat B $49,300
And yes! Some will celebrate the reduction in price, but wait a minute, it is not by much as Cat B drops $299 from its previous price or equal to -0.61%. We had previously remarked that there are 61.65% more bids that available quota for Cat B at the last bid of December. And in the latest bid, though the price has remained above $49k, the amount of excess bids that were submitted only outnumbered the actual quota by 375 or 36.72% more bids than there are available COE.
Cat C $35,900
Up by $699, and percent wise (+1.99%). This latest bid is higher than all the Cat C for 2020 and 2019. We have to go far back till March of 2018 before the price was higher than this. Cat C rise in price should have little to do with Chinese New Year season, as commercial vehicles are usually meant for work and bought as a necessity.
COE Prices A Little Like Tesla Stock Prices?
Just a little alike, maybe, because COE prices have been in this territory before. And it is just moving back into this price range again, whereas Tesla is making new highs.
Where it is similar is in the fact that there are some who think Tesla is overvalued and should be short sold as its stock price should fall, and also those who think that COE should soften and not move so strongly up, given the situation of Covid-19, current relatively high levels unemployment and our economy only just entering Phase 3 and getting its footing.
I’m no stock expert, so you can ignore my musings about Tesla. But here is a recap of how much the COE has moved since the last closing bid before Covid-19 Circuit Breaker
Cat A $31,210 to $40,609
Cat B $30,012 to $49,001
Cat C $22,002 to $35,900
Prices have increased by $9,399 for Cat A to almost $19,000 increase for Cat B since the restart of COE bidding. So ouch, if only you had chosen to purchase the car 9 months ago. Everything works best on hindsight.
But maybe here is another parallel, people are valuing Tesla based on what they think it will achieve in the future. And us? Are we chasing up the COE in the belief that it may go even higher if we don’t buy that new car now, while it is still low and before the economy moves into brighter days? This FOMO (Fear of Missing Out) may be what we are looking at for stocks and COE. If it is really FOMO, then how long can this last?
Adding to the FOMO is the announcement that COE quota will be reduced for the next quarter by 12.8%, which obviously does not help proces to come down. What logically would happen is the longer the wait, the higher it will be bidded up with the shrink in quantity.
This 12.8% reduction is calculated as an average across all categories, for each specific category, it looks like this:
Cat A sees a drop of -8.26% or 159 less COE. (Highlighted in Yellow)
Cat B sees a drop of -6.50% or 131 less COE.(Highlighted in Blue)
Cat C sees a drop of -30.48% or 224 less COE.(Highlighted in Green)
The fall in Cat C number is pretty sharp and it will definitely lead to some price hike in the commercial vehicle category.
The Cat A and B COE quantity reduction, though less extreme, is also not to be sniffed at, and will more likely also result in an upward price push for these two car categories due to less available COE, unless we also have a corresponding drop in demand for new cars.
There is a chance this may happen for passenger cars as the year end and Chinese New Year season passes. But for commercial vehicles, we doubt so.
With the pick up of the economy and the delivery and logistics sector doing particularly well due to online orders and home deliveries, we see sustained commercial vehicle demand coupled with the sharp reduction in quota – a recipe for a price rise that is as steep as the reduction in quantity of COE.
Vehicle exporters we had a chat with also mentioned a fall in the numbers they are able to get for exports. This means that, in the recent past months especially, more and more, people are renewing their cars – which in turn means that there will be less COE available, since renewed cars hold on to their COE and these COE are not recycled back to the system for bidding.
COE Renewal Price Prediction For February 2021
These below are our COE renewal price prediction, and again, it is all up, just like last months prediction. Only worse, because the rise is by even more than last month.
Cat A $39,460
Up by $1,323 (+3.35%) for February compared to January 2021 COE renewal price. Last month’s COE renewal price was up by $834.
Cat B $45,453
Up by $2,770 (+6.49%) compared to the COE renewal price of January 2021. Last month’s COE renewal price was up by $1,970.
Cat C $33,971
Up by a significant $1,172 (+3.57%) compared to the PQP of January 2021. Last month’s COE renewal price was up by $2,143.
What Should I Do Now If I My Vehicle COE is Expiring Soon (Feb to Apr 2021)?
Given the situation we are facing, the likelihood of a continued rise in prices is greater than the relief that may come after the festive buying has fallen back to normal.
And we mentioned before that normal is actually going to mean a continued rise in prices, because normal is pointing to a normalising economy compared to one that was stopped in its tracks during Circuit Breaker period, which despite the stoppage, had seen COE prices rise immediately after bidding resumed.
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 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.