Singapore's Certificate of Entitlement (COE) premiums saw a notable uptick across most vehicle categories in the latest bidding exercise held on June 18, 2025, with the exception of motorcycles, which experienced a decline. This bidding round marked a reversal from the previous two exercises, which had seen falling COE prices, stirring renewed interest and activity in the local automotive market.
In the Category A segment, which covers smaller cars with engine capacities of 1,600cc and below and horsepower not exceeding 130bhp, premiums edged up by 1.2 per cent to close at S$98,124, compared to S$96,999 in the previous tender held on June 4. This increase came despite a relatively stable number of bids for Category A, which stood at 1,647, slightly fewer than the 1,691 bids in the prior exercise, suggesting other market forces were at play.
Category B, encompassing larger, more powerful cars and electric vehicles (EVs), saw a more pronounced rise of 3.2 per cent, with premiums climbing to S$116,670 from S$113,000. This category also attracted significant excess demand, with 382 excess bids, more than double the previous round, indicating strong buyer interest in bigger vehicles and EVs despite the premium increase.
The Open category (Category E), which can be used for any vehicle type except motorcycles but is primarily utilized for larger cars, also recorded a 2.6 per cent increase, with premiums rising to S$116,889 from S$113,900. Commercial vehicles (Category C), including goods vehicles and buses, experienced the steepest premium climb, surging 4.8 per cent to S$65,000 from S$62,000.
Contrastingly, motorcycle premiums (Category D) bucked the trend, falling 4.4 per cent to S$8,600 from S$9,000, the only category to see a decline in this exercise.
Overall, the exercise attracted 4,207 bids across all categories, a 4 per cent increase from the previous tender, with a quota of 3,067 COEs available. The Land Transport Authority (LTA) had earlier announced a more than 6 per cent increase in the COE quota for the May to July 2025 period, raising the total number of COEs to 18,232 from 17,133 in the previous quarter. This quarter-over-quarter rise follows an 8 per cent increase in the prior quarter and represents a 21 per cent increase compared to the same period last year.
Industry insiders suggest that the recent dip in COE prices in the two prior rounds may have spurred buyers to act, leading to the uptick in premiums. Mr. Ng Choon Wee, commercial director of Komoco Motors, which distributes Hyundai vehicles, said, "Potential car buyers may have taken the opportunity to make their purchases at a time when COE premiums were slightly lower than in preceding tenders." He noted that some brands capitalized on the lower prices by holding roadshows that secured substantial orders.
Similarly, Ms. Corinne Chua, managing director of Volvo at Wearnes Automotive, observed increased showroom traffic over the past two weeks following the dip in COE premiums, describing the interest levels as "not too bad." This suggests that consumer confidence may be rebounding after recent fluctuations in COE prices.
However, not all industry voices are optimistic about the sustainability of the price increases. Mr. Nicholas Wong, chief executive of Honda agent Kah Motor, attributed the rise in Category A premiums largely to motor dealers' urgency to place vehicles on the road, either to fulfill backlogs or to secure COEs ahead of anticipated price hikes. He pointed out that the number of bids in Category A remained almost unchanged, indicating that the price pressure was driven more by dealer behavior than by increased demand. "This suggested that the pressure on pricing was too high, even in a weak market where the number of bids did not increase significantly," he said.
Looking ahead, Mr. Ng expects COE premiums to continue their upward trajectory in the next exercise. He predicted that the Category B premium could reach S$120,000, citing the high number of excess bids as a key driver. For Category A, he anticipates premiums will surpass the S$100,000 mark, especially given the longer three-week interval until the next tender on July 9, 2025. He referenced May's premiums, which closed at S$103,009 and S$102,501 in two bidding exercises, as benchmarks for this forecast.
Conversely, Mr. Wong expects demand to soften in the upcoming exercise due to the school holidays, which typically dampen consumer activity. He suggested that premiums might ease depending on how aggressively motor dealers pursue sales. "The results in the next exercise would still depend on the aggressiveness of motor dealers, and I anticipate softer demand – and hence lower premiums – because of the school holidays," he commented.
The COE system remains a critical mechanism in Singapore's vehicle ownership landscape, regulating the number of vehicles on the road to manage congestion and environmental impact. COEs are required for all vehicle owners and are factored into the overall cost of purchasing a vehicle, often representing a significant portion of the total price.
With the latest bidding exercise showing rising premiums amid an increased COE quota, it appears that demand for vehicles, particularly larger and more powerful models, remains robust. The contrasting decline in motorcycle premiums could reflect shifting consumer preferences or market dynamics unique to that segment.
As Singapore navigates the complexities of balancing vehicle ownership demand with urban planning and environmental goals, the COE system continues to play a pivotal role. The upcoming bidding exercises, especially with the longer interval before the next tender, will be closely watched by industry players and consumers alike, eager to gauge the trajectory of COE prices and their impact on vehicle affordability.
