Certificates of Entitlement for both small and large passenger cars in Categories A and Blast month, stemming from a trickle-down effect following a hike in the luxury car tax in February, car dealers said.
COE premiums for Category A, which are cars below 1,600cc with horsepower not exceeding 97kW , closed at S$93,503 on March 22.Car dealers said they have seen enquiries and sales of Category A vehicles increase since the new tax. The firm said dealers are scrambling to adjust as the tax hike made the overall cost of owning a higher-end car more expensive overnight.To bring that price tag down, car dealers used up the Open Category COEs they already had on hand, as the prices were already locked in, said Vin's Automotive’s director Galvin Khong.
Mr Khong said this is among the causes of Category B also closing at a record bid price of S$116,201 last month.“Higher net worth individuals who may have been waiting to own a Cat B car can afford to pay for the luxury tax and would be able to bid for heavy prices, no matter how high. And this is perhaps one of the main reasons that is driving the price,” he said.As COE prices shoot up across the board, more people are getting priced out of car ownership.
“That's the reason we see that perhaps most of the Cat A car buyers might even be car-sharing companies or rental companies, whereby the drivers could be Grab drivers."