Dealers Bidding Up COE Premiums While Keeping Car Prices Stable

Written Reply to Parliamentary Question

Mr Foo Cexiang asked the Acting Minister for Transport

a.     whether LTA has detected any trend of car dealers bidding up COE premiums while keeping vehicle sale prices relatively stable; and

b.     whether the Ministry will consider only allowing prospective vehicle buyers to bid for new COEs, rather than dealers.

Reply by Acting Minister for Transport Jeffrey Siow:

1.     Vehicle sale prices generally have risen in tandem with higher Certificate of Entitlement (COE) premiums, but not to the same extent. Other factors, including lower Open Market Values (OMVs) and government subsidies on electric cars, have contributed to higher COE bids.

2.     The COE clearing price is set at the highest unsuccessful bid plus $1. Today, car buyers have the option of bidding for their own COEs instead of through their dealers. There is no evidence car dealers are bidding up COE prices beyond what buyers are prepared to pay. Some buyers also prefer car dealers to bid on their behalf for convenience.