The LTA will raise the bid deposit for motorcycle COEs to $800 - up from the current $200. Authorities are hoping that this would “encourage prudent bidding behaviour".
Motorcycle TCOE validity periods will also be dramatically reduced, from the current six months to the revised three. These measures are aimed at ‘cooling’ the current market, with motorcycle COE premiums crossing the $10,000 barrier earlier in the year with no signs of abating.
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The new rules are scheduled to be implemented at the second March COE tender exercise, which will happen later in the month. As bid deposits are non-refundable, it is hoped that the changes will act as a deterrent against dealers potentially hoarding quotas, which would then lead to a reduction in price. Experts believe that the record quota prices in recent times have been possibly triggered by an en masse stockpiling of COE quotas by larger dealerships.
A shorter validity period also means that unused COEs will be added back to the quota pool again more quickly, and applying some basic economies, an increase in supply should in theory aid in stabilising the prices.
These measures will only affect Category D COEs. For context, car bid deposits are set at $10,000, and this is set to not change at the present moment.
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