SINGAPORE — Certificate of Entitlement (COE) premiums for motorcycles rose about 6.1 per cent in the latest bidding exercise, as bids surged in what dealers described as an effort to meet orders for smaller bikes. This comes in the wake of heftier taxes introduced for higher-end models.
The increase — from S$6,412 to S$6,801 — was the sharpest across the categories, which all ended higher at the close of the exercise on Friday (Feb 24). It was also the highest for the category since the exercise on Jan 6 last year.
A total of 753 bids were placed for the motorcycle category, nearly double the supply available (392). Dealers TODAY spoke to said the surge was to fulfil orders for small- to mid-capacity bikes because the COEs they have on hand — from previous bidding exercises — have gone to customers buying bigger bikes.
On Monday, Finance Minister Heng Swee Keat announced a new tiered tax system for motorcycles, meant to address the trend of costlier motorcycles gaining popularity, in the Government’s Budget statement.
Under the new Additional Registration Fee (ARF) system, which kicked in for COEs obtained from the latest bidding exercise, the 15 per cent ARF rate will stay for motorcycles with an open market value (OMV) of up to S$5,000. More than 60 per cent of newly registered motorcycles will be unaffected.
But there are two new tiers: The subsequent S$5,000 of a motorbike’s OMV will incur a 50 per cent ARF and the remaining OMV — beyond S$10,000 — will draw a 100 per cent ARF.
A manager of a motorcycle retailer, who declined to be named because of the issue’s sensitivity, said traders were reserving COEs they obtained from previous exercises for buyers of big bikes. The new ARF system does not affect models registered with these COEs.
The ability to sell such higher-end models at lower prices would help “volumes move faster”. This, however, has left a “vacuum in COEs for smaller bikes”, he said. Agreeing, Mr Eugene Mah, managing director of motorbike distributor Mah Pte Ltd, said COEs for smaller models have been in short supply. While few old COEs remain in the market, whatever that was left was “going to the bigger bikes”, he said.
On the increase in premiums, he surmised that it could stem from a “surge in buyers affected by … the second tier (of the) ARF”. The OMV of bikes in this tier range between S$5,001 and S$10,000.
A manager of a motorbike parallel importer, who did not give his name, said his firm has received many daily enquiries from customers who did not mind paying more to register motorcycles with old COEs.
This was because the increases would not be as sharp as those they have to fork out in heftier taxes. The dealers expect motorcycle COE premiums to stay high for at least several more bidding cycles as dealers try to fill the void in COEs for smaller models.
Meanwhile, COE premiums rose in all other categories. Category B (for cars above 1,600cc) premiums rose 5 per cent from S$48,209 to S$50,621. Premiums in the Open Category, which can be used for any vehicle type, also climbed 5 per cent from S$48,556 to S$51,000.
NUMBERS AT A GLANCE:
Cat A (Cars up to 1600CC & 97KW): S$49,430 (up from S$48,401)
Cat B (Cars above 1600CC OR 97KW): S$50,621 (up from S$48,209)
Cat C (Goods vehicles and buses): S$49,810 (up from S$48,901)
Cat D (Motorcycles): S$6,801 (up from S$6,412)
Cat E (Open category): S$51,000 (up from S$48,556)
