SINGAPORE, Aug 20  — Certificate of Entitlement (COE) premiums for cars rose moderately in yesterday’s bidding exercise, after registering an uptick in the previous round.

Category A premiums (for cars up to 1,600cc and 97kW) rose 2.3 per cent to S$57,498 from S$56,209 (RM168,316 from RM164,542) in the previous exercise, while COE prices for Cat B (cars above 1,600cc or 97kW) increased by 2.2 per cent to S$62,140 from S$60,789.

COEs for the Open category, which can be used for any vehicle type but are usually used for big cars, also increased, rising by 5.4 per cent to S$61,001 from S$57,885.

The results did not surprise motor traders, given the large number of motorists scrapping their cars.

Higher quotas in the August to October quarter will also draw more potential buyers, they said.

Ron Lim, general manager of Tan Chong Motor, said the “controlled” rise shows buyers are not yet rushing in.

“We are seeing a healthy rate of people coming back into the market to purchase (vehicles). Whatever premium movement is simply an adjustment, more of a reflection of the increase in dealers’ prices because of COE,” he said.

Ricky Tay, director of RTMT Motor, said the increase is due to strong competition among motor agents, who are pricing their packages attractively.

This results in traders bidding aggressively to grab more market share — even if it eats into their margins —and drives up COE prices, he said.

Consumers are also aware that COEs have “come down tremendously” from the high of S$92,100 in January 2013.

With the values of some used cars — which were bought when COE premiums were much higher — depreciating more quickly compared with new ones, buyers are finding new cars more attractive, he added.

Managing director of Citipoint Credit Samuel Pang said many buyers who have been waiting to purchase a car feel “the time is right”.

More orders and enquiries have trickled in the past week, said Pang, who is vice-president of the Automobile Importer & Exporter Association.

There were 2,597 bids for Category A COEs, compared with 2,446 bids in the previous exercise and 1,966 bids in the exercise before that.

For Category B, there were 1,551 bids, a slight drop from 1,634 in the previous exercise, but up from 1,218 bids in the exercise before that.

Meanwhile, premiums for motorcycles fell marginally to S$6,112 from S$6,201. COEs for goods vehicles and buses fell by 5.7 per cent to S$46,501 from S$49,302.

A total of 21,845 COEs are available from August to October, 9.7 per cent more than the previous quarter. Traders said COE prices could soften or hold steady in the coming months.

Pang predicted prices would soften by 5 to 10 per cent by the end of the year, while Tay expected COEs to hold steady at around S$57,000 to S$59,000 for small cars, and about S$61,000 to S$63,000 for big cars.

“It will hover around this (range) because the replacement market is still very strong,” said Tay. — TODAY