Why COE for Cat C will increase?

by | Jan 19, 2022 | Happenings | 0 comments

Monthly COE Quota Analysis

 

Monthly COE (Cat C) Quota Analysis

 

Why COE for Cat C will increase?

 

In 2021, Cat C COE prices have been bumpy. Amidst land constraints and competing business needs, the quota has shrunk significantly, leading to ferocious competition occurring among commercial vehicle agents within the market.

 

Will the price skyrocket in 2022? Let’s find out!
As we conduct an assessment on 2021 quota trends, the last 3 months of CAT C premiums and successful bids between 2021 December and 2022 January.

 

COE Quota for January 2021 to December 2021

 

  • Declining quota for Category C
  • From 372 at the start of 2021, decreasing down to 90
  • May – June, the quotas gained a moderate traction, sub sequently reducing drastically

 

In Figure 2, we can see a declining trend line highlighted in “blue”, indicating clearly that quota is continuously shrinking as we proceed gradually into 2022.
This is due to the government’s stringent regulations to consistently maintain traffic flow within Singapore. In addition, with the ongoing development of the Thomson east-coast line and Jurong region line ahead, the government is regulating the number of various vehicles on the road. Moreover, enhance reliance on the transport infrastructure among citizens.

 

Figure 2

 

In view of the historical Cat C COE pricing over the last 3 months of 2021, the pricing surged drastically in Figure 2. 
However, it dipped to the $43k mark. Meanwhile, according to Figure 1, the alarming drop in Cat C quotas, could potentially drive up the pricing further in 2022. Thus, with such exorbitant COE prices, buyers will potentially consider leasing or owning pre-owned commercial vehicles instead.

 

Figure 3. December 2nd Round Bidding 2021
Figure 4. January 1st Round Bidding 2022

 

  • Currently, based on the 1st bidding between December and January, the amount of successful bids increased.
  • A significant increase for the 15%-30% QP bids in January.
  • The figures indicate that Cat C buyers are willing to compete for the limited supply of COES, outbidding each other.

 

Based on these raw data gathered, we can conclude a few pointers,

 

  • Competition for CAT C COE will be vigorous as the quota will be severely reduced gradually.
  • Businesses which require an extensive amount of vehicles for their logistical needs have to adapt and rely more on pre-owned and leasing instead.

 

In summary, with the heightened demand for CAT C vehicles, this is a splendid time to gear towards commercial leasing or pre-owned vehicles for your logistical and commercial business needs. Providing affordability, flexibility and tax advantages. On top of that, there’s no COE bidding required. Hence, making it hassle-free for business owners to purchase or lease either way.

 

 

 

 

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