COE Renewal Price | PQP Prediction for September 2020

What is up with LTA? They announced that all the COE which was not issued during the Circuit Breaker (CB) stoppage of COE bidding will be released in the coming one year, with a higher percentage of the release happening in the three months after COE bidding is resumed. Which should mean more COE quota available, good time for those buying new cars and those doing COE renewals – at least that is what we understood from earlier.

However, now, there is a reduction of COE quota by one piece for every three COE we expected to have? It’s quite the U-turn!

COE Quota Drastically Reduced for 2020 August to October Quarter

Yes, a whopping 33% COE quota reduction for big cars as well as significant reductions in quantity for other categories except Open Cat.

Cat B COE quota will fall to 1,729 pieces per month from over 2,500 COE per month earlier.

The COE available for small cars in Cat A will be at about 1,967 a month for now (in August) up till end of October’s bidding, a 23.4 per cent reduction from 2,568.

The only increase in COE quantity is for the Open Cat where it goes up by a paltry 20 COE per month.

LTA says this COE quota reduction is due to less vehicles being deregistered.

COE Prices Set to Remain High

Although the ST article we linked to above has said the weak economy will mitigate the rise in COE prices, instead what we have seen from the first bid of August 2020 is an increase in the COE prices across all categories.

COE Bidding Results – First Bid of August 2020

Cat A $33,000

Up by $301 (+0.92%) in this latest bid after announcement of COE quota reduction, compared to the last Cat A in 2nd bid July 2020.

Cat B $37,102

Up by $2,101 (+6.00%) in this latest bid, compared to the last Cat B in July 2020.

Cat C $24,100

Up by $212 (+0.88%) in this first bid of August, compared to the last Cat C in July 2020.

However, should we panic? The rise in prices are not big for Cat A and Cat C both rising but at less than 1%, only Cat B is headed higher, and higher than all bids all the way back to January 2020.

Some Other Factors Pointing to COE Price Climb

That latest bid rise in prices coupled with the orders taken in by many major brand distributors still not fully fulfilled – e.g.: we were also surprised Kah Motor, official Honda distributor, had over 200 orders during the showroom closure – means that the car order backlog is still only partially fulfilled, will provide strong support for COE prices.

However, many of the orders not fulfilled are those from customers who had expected low COE prices, they are going to remain in the order books and provide a strong floor price to COE levels. There will certainly be no $1 COE from the Covid-19 economic slowdown, we are not even expecting anything less than $20k levels.

So for those customers who booked but indicated low COE bid prices for the dealers to bid for them, they will probably only get their refunds after 6 or 8 bids, whatever was their agreement with the car distributors. They are the basis of a supportive floor price.

However, it’s not the support levels that we should be focusing on, the lack of COE quota quantity will be driving the bid prices higher.

And there are still those who have orders placed since before the showrooms closed. Those would have placed orders a relatively sane COE prices and distributors would be keen to close off those orders and deliver the cars as these customers have been waiting for quite long.

In the long weekend that just passed, it seems car sales have not waned, but in fact seen quite lively activity. A recovery of some confidence by the public, as the economy is slowly moving back towards a norm, though this norm is not the same as before Covid-19. This could also translate to more lively (upward) bidding in the coming COE bidding exercise.

Given the above background, we foresee the following to be those looking to renew their cars next month

COE Renewal Price PQP Prediction for September 2020

This is the predicted PQP price for September. Reminder that September 2020 PQP is the average bids of (non consecutive) 3-months, March, July and August 2020.

Cat A $32,821

Up by $631 (+1.96%) compared to the current Cat A PQP price of August 2020 which is $32,190.

Cat B $34,801

Up by $1,887 (+5.73%) compared to the current Cat B price of August 2020 which is $32,914..

Cat C $23,833

Down by $270 (-1.12%) compared to the current Cat B price of August 2020 which is $24,102.

Cat A and B are moving in the expected direction, and the PQP is still playing catch up to the actual bidding prices, which indicates that it will probably still rise even the month after September 2020.

The only surprise here is our Cat C prediction which is down for the month of September, even with the COE price increase in this last bid. But it is because the increase is small compared and the previous to the latest was a reduction in price.

There is a lot to calculate and figure out so if you are renewing your COE and want to know how and when, we can help.

COE Renewal Loan For PQP Payment

We specialise in COE renewal finance for our customers and offer advice on the PQP renewal timing so you can maximise your current COE while keeping an eye on how the PQP is going to move.

Sign up with us early for this service so that you are secure knowing that the funds will be there the moment you choose to jump in to do the renewal at the correct time. Miss the opportunity and it could be the situation like those Cat B car owners, losing close to $2000 as we cross over from August to the 1st of September.

Feel free to contact us using the contact form on this page, or click on WhatsApp to reach us. You may also call 92782880 during office hours for urgent COE renewal cases.