Huh, the COE is how much?

About a week after collecting my car, the big motoring news was the dramatic jump in the Certificate of Entitlement premiums. The COE for Category A (Cars 1,600cc and below, and taxis) which had been hovering at the already high $30K range took a dramatic spike in the first bidding exercise for December 2010 to a whopping $47,604.



The bids for Category B (Cars 1,600cc and above) and Open Category surged to a mind boggling $62,502 and $64,900 respectively. These staggering increases represent a 10-year high and certainly the prospect of higher car prices looks a dead certainty given the impending cut to the COE supply next year.



What does it all mean for me? In effect I just saved myself a bundle. Had I not committed to buy my Subaru R1 (which falls under Category A), I would most certainly have been caught up in the knock-on effect of higher COE premiums pushing up used car prices. By way of historical record, the COE premiums for small cars has never before breached the $41,008 mark that was set way back in July 1997, until now that is. It's become a ludicrous situation where the paper value of the COE far exceeds the actual value of the car.



Will the spectre of skyrocketing car prices have a direct impact on Singaporean's car buying and usage patterns? Most certainly it will mean those who booked a new car would have to cough up more money to factor the jump in the COE. More would put off buying new and instead either buy used or keep their existing cars longer. For the majority of motorists there will be a re-think on how to preserve and better maintain their vehicles as the replacement costs have become scarily expensive.



For those who have long aspired to own a car, that dream has somehow become a lot more distant because personally, I can't see any easing of the COE premiums in the near future, certainly not with a projected reduction in the vehicle quota for next year.