Sunday, February 17, 2008

COE Prediction - February 2008 2nd Bidding Exercise

This is an interesting time to consider car ownership since the effective reduction of Additional Registration Fees (ARF) will take effect from the next bidding exercise in March.

The question on all the buyers' minds is "Buy now? Or wait?" especially for Category A COE vehicles since there is just a small saving of about $1-2K. With the lower number of COEs for 2008, this reduction in supply may result in a sudden spike in quota premium if buyers fall into the trap of herd instinct to rush in early and this may be the case for Category A COE quota premium.

For Category B COE vehicles, the ARF saving is much more for those with a higher capacity engine. Thus, category B quota premium should stay flat with buyers of big "power-plant" vehicles staying on the sideline to wait for the more significant ARF reduction and corresponding fall in pricing. I would think bidders for this round of Category B COEs are only buying 1.8 litre (little savings) or luxury (insignificant savings compared to the cost) vehicles.

Prediction on February 17:
Category A: $13,000-14,000
Category B: $12,000-13,000

Verdict on February 20:
Category A: $12,856
Category B: $15,510

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