In the latest Certificate of Entitlement (COE) tender exercise held on June 4, 2025, Singapore witnessed a notable shift in its vehicle ownership market, with premiums dropping across nearly all categories except for motorcycles. This marks the second consecutive round of decreases for car COE prices, signaling a potential cooling in the automotive sector amid steady demand for two-wheelers.
Category A, which covers smaller cars with engine capacities up to 1,600cc and power outputs not exceeding 130bhp, including electric vehicles (EVs) up to 110kW, saw the steepest decline. The premium dropped 5.4 percent to S$96,999, slipping below the S$100,000 mark for the first time in recent tenders. This is a significant relief for budget-conscious buyers, especially considering that just a year ago, in June 2024, the premium for this category stood at S$88,200. Despite the drop, prices remain elevated compared to last year.
Similarly, Category B, which applies to larger and more powerful cars and EVs, also experienced a 3.4 percent decrease. The premium fell to S$113,000 from S$116,988 recorded in the previous exercise on May 21, 2025. This continued downward trend in car COEs contrasts with the persistent high prices observed throughout 2023.
The Open Category (Category E), which can technically be used for any vehicle type except motorcycles but is predominantly utilized for larger vehicles, saw a 3.5 percent reduction. The premium closed at S$113,900, down from S$118,010 in the last round. Meanwhile, commercial vehicle COEs (Category C), covering buses and goods vehicles, edged down by 1.9 percent to S$62,000 from S$63,189.
However, motorcycles bucked this downward trend. Category D premiums rose by 3.4 percent to S$9,000, up from S$8,707 in the previous exercise. This increase highlights a steady or possibly growing demand for motorcycles, even as the broader vehicle market shows signs of cooling.
The latest bidding exercise received a total of 4,045 bids, which is 8.7 percent fewer than the 4,432 bids recorded two weeks prior. The quota for this tender was set at 3,086 COEs, reflecting an increase in supply. In fact, the Land Transport Authority (LTA) announced in April 2025 that the COE quota for the May to July period would rise by more than 6 percent compared to the previous quarter, bringing the total number of COEs to 18,232. This is a continuation of an upward trend, as the previous quarter had already seen an 8 percent increase in available COEs. Compared year-on-year, the quota has expanded by 21 percent, providing more opportunities for vehicle ownership.
Despite the increased supply, premiums have remained relatively high, a phenomenon attributed by some industry insiders to the so-called "China EV effect." Jason Lim, managing director of Eurokars Auto BMW, explained that the influx of new Chinese electric vehicle brands aggressively competing for market share has driven up demand and, consequently, COE premiums. This phenomenon underscores the dynamic and competitive nature of Singapore's EV market, which is reshaping traditional pricing patterns.
Industry players have observed shifts in consumer behavior in response to these price dynamics. Corinne Chua, managing director of Volvo at Wearnes Automotive, noted a roughly 20 percent dip in showroom traffic compared to two weeks ago. Similarly, a sales manager for a mass-market car brand reported weaker buying interest at recent roadshows held in shopping malls. Ng Choon Wee, commercial director of Komoco Motors, which distributes Hyundai vehicles, remarked that many potential buyers are hesitant to commit due to the still-high premiums following recent tender exercises. He added that some consumers are opting to wait for more COEs to be released in the coming months before making a purchase decision.
This cautious approach is reflected in the tender results, where the number of bids has decreased despite the higher quota. The increased availability of COEs—2,070 certificates in the latest tender, which is 25.7 percent more than in June 2024—is gradually easing the market, but demand has yet to fully catch up.
Reflecting the recent drop in COE premiums, motor dealers have begun adjusting vehicle prices downward. For example, the BMW 216 Gran Coupe, a Category A compact family car, is now priced at S$230,888 with COE, reduced from S$236,888 just two weeks prior. Such price adjustments offer some relief to buyers and may stimulate renewed interest in the market.
Singapore’s COE system, introduced to control vehicle population growth, remains a defining factor in the country's famously high vehicle costs. Since 2017, the Ministry of Transport has frozen vehicle population growth for all categories except commercial vehicles, with current rates maintained until January 31, 2028. The COE grants the owner the right to register and use a vehicle in Singapore for 10 years, obtained through a bi-monthly online auction. Since February 1, 2023, the number of COEs available for bidding in each category is determined by the rolling average of vehicles deregistered over the previous four quarters, ensuring a balance between supply and demand.
Singapore consistently ranks as one of the most expensive places globally to purchase a car. According to the Global Wealth and Lifestyle Report 2022 by Swiss private bank Julius Baer, Singaporean cars were the costliest worldwide. The recent easing of COE premiums, while welcome, still reflects a market where vehicle ownership remains a significant financial commitment.
As the market adjusts to these recent changes, the coming months will be critical in determining whether the downward trend in COE prices continues or if demand rebounds, pushing premiums higher once again. For now, the mixed signals—falling car COE prices alongside rising motorcycle premiums—paint a complex picture of Singapore’s evolving vehicle landscape.
