SINGAPORE – They had expected premiums to increase – ahead of a possible quota cut in February and with some customers wanting new cars for the Lunar New Year – but even so, car dealers were stunned when yesterday’s bidding for Certificates of Entitlement ended.
With prices now at a 10-year high, industry players expect premiums to rise even more next year, possibly hitting the heady heights of $100,000, not seen since the 1990s when car affordability was a big issue among Singaporeans.
The big difference between now and then though is that there are a million vehicles on the road, and Singapore would run out of road space with continuous vehicle population growth, Government Parliamentary Committee chairman (Transport) Lim Wee Kiak said yesterday.
As industry and the public alike digested the implications of the latest COE levels, car dealers such as Hybrid Motors sales manager Geraldine Lim told MediaCorp that expectations have been for an increase of only $3,000 to $4,000, and not the $15,000 seen in the Open category, for instance.
"Still, it doesn’t affect us that much because our client base is in the luxury car market," she said.
But the protracted slowdown in the number of first-time buyers has other dealers worried.
This group of buyers will have to settle for second-hand cars or buy their new ride now.
Kia Motors senior manager Chin Kee Min said those hoping to get their cars by Lunar New Year, in early February, will have to buy within this month.
"We don’t have a lot of time for COE bidding," Mr Chin said.
Those who did not have their car prices guaranteed by dealers would have been hit harder yesterday, as they would have had to top up to meet the new COE prices.
Dr Lim told MediaCorp: "Those who aspire to own, who haven’t yet owned a car, or whose cars are at the end of their COE lifespan, will be the group who are unhappy.
"But those who bought cars when COE prices were low, they’ll be rejoicing.
"When car prices go up and down, there’ll be people who are happy and people who are unhappy."
He thinks that market forces should take their course.
"I don’t think the Government should release more COEs just to make sure that more people have cars," said Dr Lim, who felt that there may have been aggressive bidding in the latest exercise possibly due to many buyers expecting bigger bonuses this year and with a possible quota cut in mind.