Certificate of Entitlement (COE) premiums have fallen again in May 2025, providing potential car buyers in Singapore with renewed hope. Following an increase in the number of COE quotas by the Land Transport Authority (LTA), premiums across most categories have shown a downward trend. The question now arises for many: Is this truly the best time to commit to a vehicle purchase?
The LTA announced a 6.4% increase in the total COE quota for the May to July 2025 bidding period. Categories A, B, and D saw larger allocations, aimed at stabilizing the vehicle ownership market after a period of volatile price swings. By easing the supply crunch, the authorities have succeeded in bringing down prices, at least temporarily, and offering more breathing space to those considering buying a new car.
Latest COE Prices Compared to Previous Quarters
The latest bidding results reveal notable changes across the board:
| COE Category | Average Price (Previous) | Price (May 2025) |
|---|---|---|
| Category A (Cars ≤ 1,600cc) | $103,000 | $99,500 |
| Category B (Cars > 1,600cc) | $121,000 | $117,003 |
| Category C (Goods Vehicles) | $69,001 | $65,001 |
| Category D (Motorcycles) | $9,709 | $9,309 |
| Open Category (E) | $119,501 | $118,001 |
Buyers eyeing a new vehicle will appreciate the slight but important drops, especially in the higher-end Categories B and E. A lower COE directly reduces the upfront cost of buying a new vehicle, but it remains crucial to consider the total cost of ownership.
Should You Buy a Car Now?
While falling COE prices are attractive, making a buying decision should not be based solely on lower premiums. Several key factors must be assessed carefully:
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Total cost of ownership, including insurance, taxes, maintenance, and running costs
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Availability of dealer promotions or rebates during the COE downturn
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Financing rates and loan terms currently being offered
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Personal necessity for a vehicle considering Singapore’s strong public transport infrastructure
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Upcoming policy changes encouraging electric vehicle adoption
Buying a car during a COE price dip could be beneficial, especially if it matches personal needs. However, buyers should remain mindful that future COE trends are still subject to demand pressures and government quota adjustments.
Market Trends and What to Expect
Although the current environment seems favorable, COE prices have historically been unpredictable. Economic factors, population growth, car scrappage rates, and shifts towards electric vehicles will all influence COE prices in the coming months. If demand surges after this period of lower premiums, prices may bounce back quickly.
For those seriously considering a purchase, monitoring upcoming bidding exercises and staying informed about changes in quota announcements will be key strategies. First-time car owners, in particular, should take a balanced view, ensuring that their financial position remains stable even in the event of future hikes.
FAQs
Why are COE prices dropping in May 2025?
The Land Transport Authority increased the number of COEs available for bidding, which helped ease demand pressures and lowered prices across most categories.
Is May 2025 the best time to buy a car in Singapore?
It could be a good time due to the lower COE premiums, but buyers must also evaluate total ownership costs, their personal usage needs, and future market trends before making a decision.
Will COE prices continue to drop throughout 2025?
While the current trend is downward, COE prices are influenced by various factors including demand, vehicle deregistrations, and government policies. Future price movements remain uncertain.
Should first-time buyers consider purchasing now?
First-time buyers may benefit from the current lower COE prices but should also plan for long-term expenses, loan obligations, and possible market fluctuations in the coming years.
How can I stay updated on COE changes?
You can monitor COE bidding results and government announcements every two weeks through news platforms and official LTA releases to stay informed about upcoming changes.
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Aanchal is a passionate writer with a keen interest in storytelling, content creation, and creative expression. She enjoys exploring diverse topics and crafting engaging narratives that captivate readers.