COE Renewal Price | PQP Prediction for May 2021
In the first bid of April, COE prices went up as expected, mostly due to the three-week scenario we mentioned in our earlier article. We had mentioned it in the same breath as the Cat C COE and said that Cat C would go upwards in the first bid of April, but were we correct? No. Well more on that below.
Here are the bid results for the first bid of April 2021:
COE Bidding Result 1st Bid of April 2021
Cat A $45,600
The COE for Cat A went up, by $1,011 (+2.27%). It is now up for three consecutive rounds and this latest increase follows last bid increase of $2,593 (+6.17%) and the one before it where it rose by $995 (+2.43%). We had predicted further upside, and it continues north.
Cat A support was mentioned before in this article where we asked if COE has turned a corner. And yes, support is still there for the reasons we had written about earlier.
Cat B $52,309
In the last bid of March 2021, Cat B was up $2,000 (+4.44%), and this latest bid adds another upward charge of $5,308 (+11.29%) to the COE figure to end at over $52,000 mark. This is the highest for this year, and the last time we had Cat B higher than $52,000 was in December of 2017.
If we recall correctly, 2017 was a time when people got along financially quite well, not many felt that the economic conditions were tough, nor had anyone known of Covid-19 yet.
We mentioned in the article before this one that there was support for Cat B. But it seems this is showing more than just support, it is an upward climb with quite some momentum.
What is the cause of this support, or is it a lack of COE quota?
Cat C $36,134
Surprise (for us) Cat C is down by $3,455 or -8.73% for this bid, after rising by $2,076 previously. We did not expect a drop of more than 8% for Cat C and on hindsight we can now see why that has happened.
This latest lower closing for Cat C was caused by the dampening effect the new CVES ruling that kicked in on 1st April on all new commercial vehicles that run on diesel.
Why Cat A, Cat B & Cat C Went The Way They Did
The three week factor – having a three week interval between the late March and early April 2021 bids gave more time for dealerships and distributors to collect more orders and where there is more demand, the COE will rise.
If we just consider ratio alone, there should be 50% more sales orders closed in a three week interval than compared to the usual two week. So the rise in Cat A and Cat B was to be expected.
We Failed To See Cat C Fall
What? Yes, most of us know that the majority of commercial vehicles run on diesel. And this is the fuel of choice accounting for at least 85% (by our best guess) of commercial vehicles on the road.
To have this majority preference suddenly be slapped with a $10,000 additional fee if registered after end of March 2021, was going to have a sharp and sudden pull back in demand for Cat C as companies postpone their purchases and consider either repairing older diesel vehicles or other options that are available.
Would running petrol vans make more financial sense, now that they are at least $10,000 cheaper in their OTR price?
The soft Cat C situation should continue for at least a month or two, till those in need of new commercial vehicle figure out what works under the new regulations.
Also, many dealers had fought (i.e.: bid up the price) for Cat C COE before April, in an attempt to register extra commercial vehicles for sale after the 1st of April which have not incurred the $10,000 charge.
But it is to be seen if that was a wise move, with COE now back down by $3,455 – will it go down more?
In light of the above, how about the coming bid and the COE renewal price in light of these changes?
April 2021 COE Renewal Prices | Cat A to Cat C
We are late in writing this article due to the recent busy period, so do excuse us, this is a simple prediction we had in our laptop, with going into reasons why they are where they are. This article is being written less than an hour before the 2nd April COE bid closes later this afternoon.
Cat A $43,548
This is a predicted increase of $1,265.
Cat B $48,484
This is a predicted increase of $1,168.
Cat C $39,347
This is a predicted decrease of $635.
Signing Out For Now
I’m going off to observe the last half hour of COE bidding, typically the fastest moving period, before the bid closes. Finger crossed for you guys who are doing COE renewal soon, that it goes in your favour!
We welcome all your queries on COE renewal loan application, for which SG Cash N Cars specializes in, not just in getting the loan done, but at the right time for you, so that renewal is at a lower cost, and when the opportunity is there, sometimes you save by thousands. What is admin fee when renewal savings is four figures?
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