SINGAPORE: Prices for both new and used cars have gone up, following the surge in COE premiums to 10-year high recently.
Prices of new cars rose 10 percent while second-hand cars are S$3,000-S$8,000 more expensive than before the results of the latest round of COE bidding were announced on 8 December.
COE premiums skyrocketed in the latest round of bidding, with a staggering jump of S$14,612 for cars over 1,600cc. This brings the total premium for that category to S$62,502.
Prices for the Open Category was up S$15,010 to S$64,900. For smaller cars 1,600cc and below, the COE price rose S$8,604 to S$47,604.
These latest COE prices are the highest since 2000.
Following the COE price surge, dealers of new cars see less business over the last few days.
They say the price of big cars is now up by about S$15,000, while small cars are costing some S$9,000 more.
Dealers say the sudden surge in prices has had a huge impact on customers but they believe business will bounce back.
Dexter Tang, manager of sales & operations at Prime Cars, said: “We need time for the customers to digest and accept the price but for consumers who are thinking of buying cheaper cars, I think that is history already. From now on I think the price will be stable or moving upwards.”
With the impending cut to the COE supply next year, dealers say premiums may go even higher.
They say some customers may view small cars as having less resale value than big cars, should COE premiums rise further.
Meanwhile, business at second-hand car showrooms is looking good. Motorists may save S$20,000 to S$30,000 if they opt for a used car.
Generally, the used car industry saw business double this October compared to the same month last year.
“Nowadays we can see more people are selling, trading in their cars when they buy a used car….I think that's because more people are focusing themselves on the used car market,” said Raymond Tang, honorary secretary of Singapore Vehicle Traders Association.
Channel News Asia