COE analysis January 2023 first round: Holiday hangover

The first Certificate of Entitlement (COE) bidding exercise for January 2023 saw premiums fall across the board for all categories, with Categories A and B seeing the biggest drops.

In Cat A, which is reserved for cars with internal combustion engine (ICE) that are less than 1.6-litres in capacity and output of less than 130hp, and electric cars with an output of less than 147hp, prices went down by $8,007 to end at $80,000 flat, the biggest drop of all the categories in this exercise.

Category B, which is for ICE cars with engines that make more than 130hp, or are above 1.6-litres in capacity, and electric cars with outputs of more than 147hp, saw the slightly less but no less significant dip of $6,004 to end the bidding at $102,002.

Category E meanwhile, which is open to all vehicles except motorcycles, but usually ends up being used for big cars, saw a far smaller dip of $1,711 to end at $107,889.

Before you celebrate and rush out to buy that new car though, it bears to note that, historically, the first COE bidding exercise of the year tends see relatively weaker demand than average, primarily as a hangover from the preceding holiday period when most people are away and business generally slows down as a whole.

Just as a reference point, a year ago, the premiums for Cat A went from $58,801 in late December 2021 to $57,599 in January 2022.

Likewise, Cat B went from $80,989 to $77,700 in the same period. They're relatively smaller dips compared to the latest exercise, but the point still stands. (Also, pretty staggering to see how COE premiums have skyrocketed within the space of just 12 months)

If anything, it's probably just a temporary blip, attributed to the holiday season as mentioned above. And chances are, premiums are expected to spike up again in the next exercise, given that there's the looming return of the Singapore Motorshow on Jan 12 to 15, with many brands anticipating demand to pick up subsequently.

As for how the rest of the year will pan out, it's a bit harder to say, but the likelihood is that, for the first half of the year at least, things will likely be much of the same as what we've seen in 2022, i.e. premiums will remain at a heightened level.

There is the possibility of prices levelling out towards the second half of the year, before slowly starting to dip as we head into 2024, but as always, these things tend to be difficult to predict accurately.

But if trends are anything to go by, perhaps a handy tip for next time is that if you are looking to buy a car and are hoping for a lower COE premium, it might be a good idea to try your luck in late December or early January. One to take note of for the end of 2023 perhaps. 

ALSO READ: COE analysis December 2022 first round: Christmas dip

This article was first published in CarBuyer.