Thursday, January 15, 2015

High COEs

One of the biggest complains of Singaporeans is the high COE prices in Singapore. COE prices for new cars currently sit above $65,000 for both Cat A and Cat B vehicles. So when the LTA (Land Transport Authority) announced that there would be more COEs available in February, people cheered thinking prices will come down.

Don’t bet on it.

In the latest COE Quota announced by the LTA, Cat A COE (for cars up to 1.6 litres in engine size or up to 130bhp) will expand in supply to 1,973 a month, while the Cat B COEs (for all other cars) will grows to 1,444. Give or take, that’s an increase of about 500 for each Cat so logic says prices for the COEs will come down.

Logic and common sense plays no part in the brains of Singaporeans when it comes to cars. Singaporeans loves car not because they are useful; they love cars because they are a status symbol in Singapore. Cars are a sign you are rich, that you have made it, that you have “face”.

That is why I’m not convinced prices of COEs will come down just because there’s more COEs on the market. More likely than not, prices in Feb will still be high because…well, this is Singapore. When it comes to “face”, brains takes a backseat.  

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