COE Premiums for Motorcycles Hit $8 Thousand Mark
According to Dr Lam Pin Min, the sharp increase of the Certificate of Entitlement (COE) premiums for motorcycles is not due to the stockpiling of COEs by local dealers.
During the last exercise, the motorcycle premiums closed at $8,451. It has been reported, though, that the Land Transport Authority has not found any data that proves that it is because motorcycle dealers stockpile Cat D COEs to resell at a higher price, according to Senior Minister of State for Transport MP Lee Bee Wah.
This current predicament has been a worry ever since motorcycle COE premiums broke the record with $8,801 in March last year. Back then, many were already worried that local motorcycle dealers had something to do with the sudden spike in COE premiums by stockpiling the temporary COEs and profiting off of them.
“Currently, motorcycle dealers bid for COEs under their name and hold a stock of temporary COEs,” Dr Lam told Channels News Asia. “This is preferred for the motorcycle market as it allows buyers to take delivery of motorcycles immediately. Our data does not reveal irregular stockpiling of COEs ... with the exception shortly after the tiered ARF for bikes was introduced.
“In those instances, dealers might have kept some of the COEs garnered before the announcement of the tiered Additional Registration Fee (ARF) to register more expensive motorcycles.”
It has been recommended by experts that the registration fee for temporary COEs be raised, as well as shortening the current six-month validity period.
However, in doing so, Dr Lam thinks it might affect the current business model of motorcycle dealers by “reducing the time available for dealers and buyers to secure the vehicle before the temporary COE expires”.
“Dealers would then have to maintain a large inventory of vehicles to meet the shorter validity period and this might increase the business cost of the dealers,” he said.
“As for the registration deposit (for temporary Category D COEs), it is tied at S$200 because the quota premiums for motorcycles are much lower than that of normal cars.”
On the current trend of the COE premiums for motorcycles, Dr Lam commented that they “did notice that Category D COE premium was at S$8,001 for the second bidding exercise of Jan 2018 and we’ll be watching the trend closely.”