What’s driving up the costs for COE and Vehicles today?
All categories of COE have seen incremental increases for the past few biddings, with the highest bid for the open category crossing $110,000, but what are the factors driving up these costs? Should you Buy Now, Wait or Lease?
Aggressive Bidding By Fleet Rental Companies?
During the COVID-19 lockdown, many rental companies reduced their fleet size with significantly lesser demands for rental, choosing to scrap or sell off their surplus vehicles. But with the borders open, and WFH measures relaxing, increased business activities are driving up demands for rental in both private hire and commercial vehicles.
Global Supply Chain Disruptions?
Everything from steel and electronic chips to tyres, the entire global supply chain is in mayhem with the spike in shipping costs, delays at ports, and shippers taking longer routes to avoid conflict zones, almost everything takes longer and costs more to ship. These add to the final vehicle price, with most suppliers and distributors rising prices by as much as 10-25%
If you are wondering why fuel prices will affect COE, think about this.
For those older, heavier, powerful but not fuel-efficient vehicles, owners are paying nearly 40% more in fuel prices compared to what they did 12 months ago, and there’s no sign that fuel prices will come down soon. This makes absolute sense for them to change out their vehicles to either an EV or a more fuel efficient, lighter vehicle (which contributes to demand)
There are many reasons why COE will continue to climb, but if you are sitting on the bench, deciding to wait (for it to fall) or Buy Now, with the current COE price, our advice to you. Get a pre-own vehicle first, especially from the 2020-2021 series. You are getting an almost new vehicle under warranty, reasonable mileage, and comes with a reasonable priced COE, while shielded from the highest depreciation facing new vehicles, on the road.
Check out the range of 2017-2021 pre-own vehicles here that gives you the best value for money.