The COE results of May 2017 were surprising, with Category A making its greatest drop all year, and Category C making a sudden rebound, going against many expectations.
Categories B, D and E premiums generally dropped, but by a relatively smaller amount. What are the main big changes you should know about, and how will they affect you? Find out here!
1. Cat A is at it's LOWEST in 2017
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Category A, which applies to smaller cars up to 1,600cc and 130bhp, showed one of the major changes this round. Premiums for this category dropped $51,106 to $46,489, a difference of $4,617. This is the biggest drop Cat A has seen in 2017 so far, so if you're thinking about getting a smaller car, now might be the right time!
2. Cat C Rebounds by More Than $4,000
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Category C, applying to commercial vehicles, was the contrary one this round, rising by a considerable amount of $4,571, from $26,209 to $30,600. This was a surprise for most people, who expected a continued drop after the massive $19,405 plunge in April 2017.
However, because of this plunge, companies might have rushed in to take advantage and order their commercial vehicles quickly. The sudden increase in orders could have driven the COE premium back up, resulting in the rebound that happened this round.
3. Future Possibilities
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With apps like Grab on the rise, it is possible that demand for private cars will stay low. However, a sudden drop in COE prices may also cause an increase in vehicle owners looking to buy before the trend goes back upwards. An increase in demand would then drive the price back up. It may be a good idea to take advantage of the current low prices, especially since the drop has been comparatively steep.
If you are entertaining the thought of buying a new car, you can try getting a complimentary car valuation to see how much your existing car is worth in the current market.
For commercial vehicles, some experts are predicting that the current upward trend will continue for a while, as the rise is small compared to the April S$19K dive, meaning that premiums are still considered low. This may cause demand to rise as more drivers rush in to get their vehicles while the premium is still low, pushing the price up some more.
Another opinion, however, is that prices will start to fall again, as pressures on the market might begin easing up next round. The LTA is increasing Cat C quotas from 322 to 2,168, meaning that the supply for next round will be more likely to overwhelm the demand, keeping prices low.
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