Certificate of entitlement (COE) tenders ended mixed in the first bidding of the year yesterday as new emissions-based taxes kicked in.
The COE premium for cars up to 1,600cc and 130bhp finished 8.4 per cent higher at $41,400, while that for cars above 1,600cc or 130bhp closed 3.6 per cent lower at $45,289. The Open COE category, which can be used for any vehicle type except motorcycles, ended 1.3 per cent lower at $47,390.
The cost of a commercial vehicle COE tumbled 11.1 per cent to hit $40,101 – its lowest since last July. The motorcycle premium on the other hand, rose by 2.7 per cent to hit $7,701 – its highest since last March.
The rise in COE prices for smaller cars was fuelled by a surge in buying interest after premiums plunged to $38,200 last month. But the increase was tempered by uncertainty over the new Vehicular Emissions Scheme (VES), which accords tax rebates or surcharges based on a car’s emissions, and which came into effect on Monday.
For instance, Borneo Motors, the authorised agent for the best-selling Toyota brand, collected orders for its Corolla Altis with a $10,000 surcharge in November.
But last month, it dropped the surcharge when it became clearer that the Altis was actually in the neutral band of the VES. Borneo said it will now refund buyers who had booked the cars with the surcharge.
Mr Nicholas Wong, general manager of Honda agent Kah Motor, said the results were not unexpected.
While the number of orders increased for both car categories because of the sharp drop in premiums last month, sellers of bigger cars were unable to bid as aggressively as before because of the VES.
“Many of their cars, such as the hybrids, have either lost their rebates or now qualify for smaller rebates. So, to remain competitive, they are sacrificing some margins, and could not bid as high,” he said.
As for the continued rise in motorbike COE premiums, Mr Wong said: “In the last few rounds, premiums rose because dealers were rushing to meet the Euro 4 deadline. Because motorbike COEs are transferable, many are still holding certificates they secured last month. It is in their interest to keep premiums up, or they will lose money.”
In fact, 112 motorbike COEs – 21 per cent of the quota – were unused yesterday, indicating some dealers were already disposing of them. They lose merely $200 per certificate.