SINGAPORE: With some buyers showing concern over the full implementation of the Vehicle Emissions Scheme (VES), dealers are throwing together attractive packages to entice them back into the showrooms this weekend.
The VES, which was fully implemented on Sunday (Jul 1), was a factor behind the steep decline in COE premiums, experts said.
“Before the VES kicked in, some buyers could have felt that certain cars were affordable,” said transport researcher Professor Lee Der-Horng. “Different buyers target different price ranges. So when the vehicle you’d like to buy is being affected, certain groups of buyers will be affected and this might be a reason for the drop in COE premiums.
COE premiums for small cars (Category A) fell to their lowest in more than eight years, closing at S$25,000, down from S$34,110 in the previous exercise. This was the lowest since Mar 10, 2010, when premiums were S$20,802.
Prices for larger and more powerful cars in Category B also dipped to S$31,000 from S$33,900. Open category COEs, which can be used for any vehicle type but end up being used mainly for large cars, fell to S$31,001 from S$34,400.
The VES measures all new cars, taxis and newly-imported used cars for levels of tailpipe pollutants they produce – namely carbon dioxide, carbon monoxide, hydrocarbons, nitrogen oxides and particular matter. Particular matter was only measured after Jul 1.
The amount of rebate given or surcharge levied on the vehicle is determined by the worst-performing pollutant.
Given that their new vehicles could face surcharges after the full VES implementation, some opted to purchase vehicles before the deadline. One of whom was Mr Lim Chai Seng, who bought a Toyota CH-R two weeks ago.
“When I visited the showroom, there was a promotion for this particular car – a discount of about 20 to 25 per cent,” said Mr Lim. “It was too good to pass up. If I didn’t buy it then, I would have to pay extra under the VES.”
But dealers are optimistic that the crowds will now return, given that COE premiums have fallen.
“Since the COE (premiums) have fallen by close to S$10,000, the demand for cars will still be there,” managing director of CarTimes Automobile, Mr Eddie Loo, told Channel NewsAsia. “Certain cars are also not affected by the VES, so people will also be encouraged to enter the market.”
“Each time there is a price drop, we expect to see more coming into the showroom,” said Mr Ricky Tay, managing director of RTMT Motor.
To entice them, car dealers whom Channel NewsAsia spoke to plan to put together attractive packages, in preparation for the weekend crowd. Renault is slashing prices by S$5,000. Hyundai is offering S$2,000 discounts on all models.
“In a few months time, people would have gotten used to the VES,” said Mr Raymond Tang, managing director of Yong Lee Seng Motor. “If you need to use a car, you will still get a car. Since VES is there and implemented, it will be there to stay.”
File photo of traffic in Singapore. (Photo: Jeremy Long)
In fact, there continued to be demand for cars which incur a VES surcharge, said Mr Tang, who has received more inquiries for them since news of the lower COE premiums broke.
Indeed, for most buyers, the deal breaker would be COE premiums and not the VES surcharge.
“The VES situation does not affect my decision on whether to buy a car or not,” said Mr Jeremy Lim, who is considering buying a new car instead of a secondhand one because of the drop in COE premiums. “It is not a game changer.”
