Deluge of EVs, luxury brands likely to keep Cat A COE prices high

Those hoping to buy a mass-market car may find themselves increasingly priced out

- Lee Nian Tjoe

Since January, the price of certificates of entitlement (COEs) for smaller, less powerful cars has risen more than the price of COES for larger, more powerful models.

Until 2024, the Category A COE price has ranged between $20,000 and $30,000 below Category B.

But at the second tender exercise in July, the premium for Category A COE was $8,101 below that of Category B, the closest it has been under the current system. At the most recent tender that closed on Oct 23, the gap between the two categories stood at $10,990.

Category A COES have traditionally been used to register mass-market cars - like those for families with young children - as opposed to Category B COES, which are for larger and more powerful, luxury vehicles.

The rising Category A COE premium means mass-market cars are becoming more expensive, and buyers of such models may find them increasingly unaffordable due to the higher price tag.

A new Toyota Corolla Altis currently costs $175,888 with a guaranteed COE, $1,000 more than in 2023, and $33,000 more than the 2022 price.

In contrast, the price of a Category B COE luxury car like the Mercedes-Benz C180 has fallen by $31,000 from its 2023 level to $307,888 with COE in October, due to premiums coming down from record highs in 2023.

The rising Category A COE price can be attributed to the deluge of electric vehicle (EV) models and luxury brands muscling into this segment, as well as owners of large premium models trading in for entry-level Category A COE offerings from the luxury brands.