COE PRICES MAY FALL EVEN BEFORE INJECTIONS
Still, dealers remain optimistic that the effect on their business would not be severe.
Mr Loo said that if there are indeed fewer buyers, it could lead to lower COE prices in this period and a resultant surge in demand in the months after that.
“Right now, if customers were to hold off the immediate buying (of cars), the immediate COE will be dropping … that’s good news for everybody,” he said. “It is supply and demand.”
Another factor that could suppress COE prices is lower bids from car dealers. When anticipating a drop in COE premiums, they would take this into account when pricing their vehicles.
“Normally, the auto dealers will bid lower prices, because the (number of) COEs will be more (in future),” said president of the Singapore Vehicle Traders Association, Mr Neo Tiam Ting.
“The bidding price may come down even though it is not the February 2025 bidding exercise yet,” added Mr Neo, who is also the director of car dealership ThinkOne.
Agreeing, Mr Loo said: “Customers normally do not fully care about COE prices but they will look at the full transaction price of the vehicle.
“Thus, a lower (COE) price buffered into the asking price will result in consumers enjoying lower prices overall.”
But car dealers holding on to second-hand cars will likely suffer losses, Mr Neo said.
“If COE prices come down, their (second-hand) car prices will also go down, so in this interim period, they may suffer with their existing stock on hand,” he said. “But going forward, they can buy (second-hand cars) at lower prices.”