Are COE prices set to fall? More Cat A and B COEs in the coming quarter

The LTA has announced that the COE quota for the February to April period will be 9,437.

This figure was tabulated using an adjusted formula to calculate the quotas for bidding.

If the previous method was used, the quote would have been 8,695. This move is to further reduce the quarter-on-quarter volatility of COE supply.

3,144 COEs will be made available per month in this quarter, with Cat A and B set to have 1,010 and 860 quotes respectively. This is an increase from the baseline of 915 and 817 from the previous quarter.

Cat C and E will see a reduction in quotas, from the 137 and 291 of the previous quarter, to the 86 and 259 of the upcoming quarter respectively.

An increased supply should lower prices for Categories A and B, and the inverse is also true, so expect there to be slight increases in the prices for Categories C and E.

To recap, the COE quota consists of the following components: 25 per cent of the replacement COEs from vehicles deregistered in the twelve-month period of January 2022 to December 2022; Provision for 0.25 per cent per annum growth for Category C based on the Category C vehicle population as at Dec 31, 2022; and Adjustments for changes in the taxi population, replacement of commercial vehicles under the Early Turnover Scheme, and expired COEs.

The next quota announcement for the bidding period of May 2023 to July 2023 will be made in April 2023.

ALSO READ: January 2023 COE results second bidding: Increases in all categories except for Cat C and E

This article was first published in Motorist.