SINGAPORE — In anticipation of an even bigger crop of Certificates of Entitlement (COEs) that will be made available in the next three months, the latest COE bidding exercise today (July 22) closed with big-car and Open category premiums falling to their lowest in years, as car buyers hold back to see if premiums could fall further.

In the final bidding exercise for the May-to-July period, COE premiums dropped in all categories except commercial vehicles, which saw a marginal S$1 increase. For Category B cars (above 1,600cc or 97kW), premiums plunged from S$65,501 to S$58,109, a drop of 11.29 per cent. This is the lowest since March 2013, when bidding for this category closed at S$58,090.

Premiums for Open category COEs — which can be used for all vehicles, but are typically snapped up by big-car owners — fell 12.9 per cent, from S$69,001 to S$60,101. This is a four-year low since May 2011, when bidding in this category closed at S$56,889.

Category A premiums (for cars up to 1,600cc and 97kW) fell 4.79 per cent from S$58,700 to S$55,889. This is the lowest since February 2012, when bidding closed at S$52,809.

Copy: COE prices (July 8) | Create infographics

Motor traders attributed the sharp decreases to the planned increase in COE supply in the coming months. Last week, the Land Transport Authority announced a 9.7 per cent increase in supply of COEs from next month to October, bringing the total number of COEs during this period to 21,845. This follows a bumper crop of COEs (19,912) released for the May-to-July period.

With more COEs to be expected, motorists may have taken to playing the waiting game, said Mr Raymond Tang, first vice-president of the Singa­pore Vehicle Traders Association (SVTA).

“Everyone is just waiting for the next round, because they believe (premiums will) drop even further, since there are quite a lot of COEs available. Motor firms also want a bigger profit margin,” said Mr Tang, noting that orders for car are continuing to stream in, despite the lack of bids for COEs.

Agreeing, Mr Eddie Loo, managing director of CarTimes, said this could lead to a point where “everyone rushes in” with their bids and COE premiums surge upwards once again.

Like other traders, he believed it was due to the wait-and-see attitude adopted by motorists. The marginal price difference of S$2,220 between cars in Categories A and B could also lead to more motorists opting for bigger cars, he added.

“This weekend, I expect the crowds to come in,” he said. “People might buy Category B cars instead, and this will have a push factor on COE prices.”

Motorcycle premiums, which have been fluctuating of late, fell 3.01 per cent to close at S$6,312. Premiums for commercial vehicles increased for the first time since May to close S$1 higher, at S$50,002.

In the short term, motor traders expect COE prices to continue on their downward trend, but Mr Loo cautioned against waiting too long for premiums to fall.

Mr Jeremy Soh, honorary secretary of the SVTA, agreed, though he felt there was room for premiums to fall further. “You never know when it’ll hit rock bottom, before it goes up.”

The latest bidding exercise saw 3,339 COEs up for grabs. In all, 4,566 bids were received, of which 3,255 were successful.