SINGAPORE — Certificate of Entitlement (COE) premiums rose for all categories except motorcycles yesterday, with small cars registering a sharp increase due to what dealers described as a reaction to the three-year low in premiums for such vehicles in last month’s exercise.

They also pointed to a surge in demand for small cars, a result of discounts offered by car dealers during the Chinese New Year period, as another reason for the sharp rise.

Premiums for small cars (up to 1,600cc and 97kW) closed at S$61,410 at the end of the first bidding exercise this month, a 7.4 per cent spike from S$57,199 in the previous exercise.

For big cars (above 1,600cc and 97kW), premiums rose to S$68,668 from S$66,751. Premiums in the Open category — where COEs can be used for any vehicle type, but end up being used mainly for cars — rose to S$70,500 from S$67,901.

Commercial vehicle premiums rose for the third consecutive time to S$56,501, from S$53,202 in the previous bidding exercise. Those for motorcycles fell after rising for the past six consecutive bidding exercises, closing 5.2 per cent lower at S$5,501.

Motor traders TODAY spoke to attributed the sharp rise in premiums under Category A — for small cars — to the 34-month-low premium of S$57,199 in last month’s exercise.

“Every showroom is packed. Everybody is rushing in. A lot of consumers have this mindset that COE prices will be cheaper after Chinese New Year,” said Singapore Vehicle Traders Association honorary secretary Raymond Tang, noting that there were more than 2,100 bids for over 900 certificates allocated under Category A.

Also playing a part in the surge in demand were the attractive offers rolled out by dealers during the Chinese New Year period, said Mr Ron Lim, general manager of Nissan agent Tan Chong Motor. For example, Tan Chong Motor provided a festive discount of S$6,888 for all Nissan cars till March 3.

The strong demand has also resulted in a backlog of orders, which would probably take another two to three bidding exercises to clear, said Mr Lim.

Another factor influencing demand was the looming revision of the Carbon Emissions-Based Vehicle Scheme (CEVS), which offers rebates based on vehicle emissions, from July 1, said some traders.

For example, to qualify for a S$5,000 cut in the CEVS rebate, some popular models in the small car category, such as the Honda Jazz 1.5, will have to undergo refinements to limit their carbon dioxide emissions, they noted.

RTMT Motor director Ricky Tay believes that COE premiums for small cars will rise gradually and stay at around S$62,000 to S$63,000 in the next two months.

Mr Tang said COE bidders act as early as possible in anticipation of higher prices. He is of the view that Category A premiums are unlikely to fall below S$60,000 in the near future as some firms are still clearing orders for cars from last year.

The Land Transport Authority received 4,339 bids for COEs at the end of the open bidding exercise yesterday. Of these, 2,342 were successful.