Singapore’s car market has seen a surprising shift after mainstream car COE premiums became higher than luxury car premiums for the first time in nearly six years. The latest bidding exercise showed Category A COEs rising to S$106,501, while Category B COEs dropped to S$105,001.
Category A covers smaller and lower-powered cars, which are usually cheaper. Category B applies to larger and more powerful cars, which normally have higher premiums. This sudden reversal shocked industry observers because premium car certificates almost always cost more.
Experts say the change is mainly due to new rules on deregistration rebates. The government reduced the Preferential Additional Registration Fee (PARF) rebate and capped it at S$30,000 instead of S$60,000. This made expensive cars less attractive to buyers.
As a result, demand for larger and luxury cars slowed slightly, causing Category B premiums to fall by more than 5 percent. At the same time, Category A prices stayed high due to strong demand for smaller cars and electric vehicles.
Electric vehicles played a major role in keeping Category A premiums elevated. Many EV buyers are less affected by rebate changes because EV incentives already reduce their overall costs.
Dealers also stepped in to protect sales by offering discounts and bidding more cautiously. This prevented Category B premiums from dropping too sharply despite weaker demand.
Industry experts say the market remains unpredictable. Some believe buyers are still adjusting to the new rules, while others expect more people to choose electric vehicles in the future.
Officials warned buyers to be careful when bidding, as COE prices could change again. The unusual results show the car market is entering a new and uncertain phase.
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