The quota premium rebounded in the last bidding exercise as expected. There were more than 1,300 unsuccessful bids and possibly many dealers who did not put in any bid. Why not bid? The dealers priced the cars with an allocation of COE cost and would not waste the administrative cost of bidding if the result is above their allocation. Many of the dealers will ask their customers to top up their COE bids if they want to have their cars registered before the Chinese New Year.
Most of the buyers who locked their orders with the lowest price failed to secure their COE while those buying at a higher price got theirs. Unfair? Well, the dealers have to stay profitable to sustain the business.
Should you top up your bid? It depends on how urgently you need your ride. I think the quota premium will stay flat. Based on LTA published information, there are 96,213 passenger car (categories A, B and E) COEs available for bidding from May 2008 to April 2009. There are 9 more bidding exercises for this annual quota so about 36,000 COEs are still available before the quota is revised for 2009.
If you are thinking of bidding for your own COE, the better opportunities are the 2nd bidding exercise in January 2009 and the subsequent bidding exercises in February 2009 when historical trend shows lower demand post-CNY (Chinese New Year). What is the chance of another $2 COE? That is LOW since many individual bidders are coming in. However, I will not rule out COEs at the affordable level of $2,000-3,000. COE quota for 2009 will be announced in early March 2009 and the expected reduction is going to drive up the quota premium in March and April 2009.
I will publish a post soon on how to go about bidding for the COE on your own.
Prediction on December 9:
Category A: $6,000-7,000
Category B: $6,000-7,000
Verdict on December 17:
Category A: $6,200
Category B: $2,656
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