COE premiums in 2024 were arguably nowhere near their 2023 peaks - but could additional reprieve come still in 2025, especially when February swings around?

COE price trend over the past quarter: October to December vs July to September 

With the year coming to a close, and with the last COE bidding round of the year already done and dusted, it is with utmost confidence and great comfort that it can be said: Even if today's outlook is less rosy than it was a few years back, at least 2024 did not return to the horrors of 2023. 

For context, at no point did we see any category go beyond $120,000 this year. In the first half of 2023, both Categories B and E were hovering consistently over that line, and in October that year, even shot past $150,000. With our chart now finally reflecting only the 12 months of 2024, the upper limit of our Y-axis has finally dropped too, to $120,000.

Roadshows and sales exercises have persisted steadily through 2024 - and while premiums are nowhere near what the average Singaporean might deem 'reasonable', they have not risen back to the heights seen in 2023 too 

That is not to say, however, that COE premiums have dipped to the levels we once deemed reasonable - nor that the discussions around the COE system haven't been dramatic this year.

While 2023 gifted us the 'cut-and-fill' term, 2024 will be remembered for yet another surprise announcement by the LTA that it would be injecting approximately 20,000 additional certificates into the quota pool. The move has been credited to projected improvements in managing congestion, as a result of the implementation of ERP 2.0.

Before letting the year-end reflective spirit whisk us away further, however, let's get back to the numbers. When averaged out over October to December, COE premiums rose across all categories against the previous period between July and September.

Finally: The upper limit of our chart's Y-axis has fallen back to $120,000 again 

In contrast to past periods where we've seen the various categories rise (or decline) at rather different levels, the increase this time was quite uniform throughout, with Cat A logging a 3.6% increase, Cat B rising by 4.1% and Cat E moving 4.4% northwards.

Initially, these numbers may seem surprising, considering that premiums do not seem to differ too drastically from where they were in end-September. Look a bit further back for this quarter, however, and you'll notice that October (incidentally, post-The Car Expo) brought with it sizeable spikes across the board.

In hitting $103,7999, Cat A, in particular, once more surpassed $100,000, and reached its highest level in nearly a year. (Interestingly, however, its dip downwards in November was equally pronounced. Falling by exactly $10,000 in November's second bidding session to $89,889, the decrease marked the category's second-largest drop for 2024, and the first time in three months it had gone back under $90,000.)

Category A is ending 2024 off significantly steeper than where it started - likely due to efforts by both legacy carmakers and new players to slot their cars within (Pictured: The Omoda E5 99kW and the Dongfeng Box, both of which qualify for a Cat A COE)

With the entirety of 2024 visible in a glance with the table above, you'll note that Cats B and E effectively ended the year off on the same point at which they started. Cat A, however, has risen considerably - a likely result of the growing push from both legacy carmakers and new EV-players alike to position their cars into what should theoretically be the most affordable bracket.

How the Cat A space continues to evolve into 2025 remains unclear. Still, might we witness a turning point in the industry, where the gap to Cat B narrows to a negligible degree that no longer puts buyers off from getting a more powerful car? Till date, no word has been given yet on how exactly the additional 20,000 COEs will be introduced across the various categories. 

It's likely that the moving average of vehicle de-registrations will pick up again with data extrapolated from the last 11 months 

Vehicle de-registrations - likely to be a slight rise this time

The flurry of intervention measures may have made the picture a bit murkier in recent memory, but it's always worth highlighting again: De-registrations still contribute to the bulk of certificates in the COE supply pool.

The current calculation method takes the moving average of de-registrations over the past 12-month period, and then divides it by four (in accordance with a quarter's worth of supply) to determine the baseline number for the upcoming quarter. Then, for a few quarters now, this has been bolstered by the cut-and-fill approach - which still relies on the pre-existing quota. And come February 2025, this will be supplemented further still by the 20,000-strong injection.

With the data from January to November this year extrapolated out across 12 months, our data indicates that the overall rolling average of de-registrations for the full twelve-month period of 2024 will be 4% higher than that in the previous 12-month period (October 2023 to September 2024). Following the slight dip noted in our previous analysis, this resumes the general uptick in de-registrations seen across the past year (and which has also been forecast by the authorities).

This figure, however, should be led by Cat B and Cat C, which respectively see a 7% and 9% increase in their rolling average of de-registrations. On the other hand, barring a massive spike in December de-registrations, Cat A is forecast to dip very minimally, by 0.15%.

As mentioned, the LTA has promised that each successive quarter will bring with it an increase in COE quota up till the peak years of 2025 and 2026, and there's no reason to expect otherwise when the numbers for the February to April 2025 period hit. (In fact, they might be higher than before with the start of the new injection.) 

For reference, the COE supply for the current period between November and next January was 4% higher than the previous August to October one. In turn, supply for that period was a slight 1% higher than that for April to July.

New car pricing: September to December 2024

Sgcarmart does its best to use a pool of popular models from authorised dealers to analyse the general price trends of new cars.

As COE prices crept upwards slightly over the past quarter, car prices moved perfectly in tandem too. Our sample indicates a 4% increase in new car prices over the past quarter (October to December), when compared to the tri-monthly average between July to September.

Most dealers appeared eager to drop the prices of their Cat A cars in tandem, when prices slid by $10,000 back in November

To return to Cat A's plunge back in November, a noteworthy observation is that the $10,000 dip was reflected quite uniformly among our authorised dealers - with the list prices of models like the Mazda 3 Sedan, Toyota Corolla Altis, BYD Atto 3 and BMW X1, and Volkswagen Golf all sliding by that exact amount - suggesting that an eagerness to draw would-be buyers into showrooms. 

Q1 2025 promises to be interesting because of two huge events that might pull new car prices in opposing directions: A potential surge in demand following the Singapore Motor Show in January, but also a likely increase in supply when February comes around.

Most popular used cars: September to November

Over the three-month period between September to November 2024, these were the five most listed used cars on Sgcarmart.

That the 2016-registered Honda Vezel has returned at the top is no surprise at this point - but its annual depreciation figure of $12,961 marks a significant dip from the previous quarter’s $14,368, suggesting a real softening of demand in the pre-owned market. In fact, this is the lowest level it has fallen to since our June 2022 analysis - a good 2.5 years ago. 

The steadily sliding depreciation figures across the models we've been paying attention to in the used car market suggests that demand may truly be softening

The dip is not exclusive to the Vezel too; similar drops can be seen for other evergreen used models like the Qashqai 1.2, Merc's C180 Sedan, and the Mazda 3 Sedan.

We previously proffered that a continued fall in used car prices amidst either steady or slightly increasing prices in the new car market would indicate that demand for pre-owned options is weakening. With the figures now appearing to confirm that, we might perhaps have reached a point where Singaporean drivers are accepting the current COE climate. 

Source: SGcarmart