Motorcyclists, dealers welcome recent fall in COE premiums but wary of spikes in future, Latest Singapore News - The New Paper

Motorcyclists, dealers welcome recent fall in COE premiums but wary of spikes in future

SINGAPORE - When videographer Lim Weiming found out about the drop in the certificates of entitlement (COE) for motorcycle, he wasted no time walking into a dealership in Kembangan to buy a second-hand Yamaha two-wheeler.

When he saw a motorcycle he liked, he put pen to paper and paid a deposit of $850.  

Mr Lim, 34, said: “I carry heavy equipment around all the time, and taking public transport was taking a toll on my back and arms. 

“I did some research on motorcycles for a few months, but felt the COE premiums were too high at the time. I’m glad I made the decision to wait instead.” 

On April 21, the Land Transport Authority raised the bid deposit for motorcycle COEs from $800 to $1,500 starting from the next tender on May 4, and require the COE to be used within a month instead of three months.

The move is part of efforts to tamp down speculative bidding, which has helped fuel the rise in premiums.

In the May 4 tender exercise, motorcycle COE premiums plunged from about $12,000 to $5,002.

When the curbs on motorcycle COEs were rolled out, motorcycle dealerships braced themselves for a hit to their bottom line.

They were wrong. Instead, there has been a sudden uptick in sales in the last week.

Mr Iain Stewart, founder of Mutt Motorcycles in Joo Chiat, said he sold about 17 motorcycles on the same day the new COE rules made the news. Sales usually hover at about two motorcycles on a normal day, he added. 

He said: “It is a step in the right direction, since the demand for motorcycles increased drastically during the circuit breaker period in 2020, due to people opting for food deliveries. 

“The COE price at around $5,000 is hugely welcomed, and the increased bidding deposit helps too, as machine prices are below the COE price itself.”

Mr Stewart added that his customers have not complained about the higher COE bid deposit either because it has no impact on them as the majority of buyers take loans. 

One motorcyclist who does have gripes is National University of Singapore undergraduate Rohan Rai, who rides a KTM RC 200 - a type of sports motorcycle.

He said he is unhappy with the higher deposit because it requires more money upfront. He added that he is also worried low COE premiums are just a blip, and they could spike again in the next year.

Mr Rai, 24, said: “I am also concerned about my motorcycle losing its value because the dealerships will quote the trade-in value as scrap value, especially if there are people like me whose COE is going to take a while to expire.”

The owner of a motorcycle dealership located in the Western part of Singapore who declined to be named had similar concerns.

He said: “We have about 70 second-hand motorcycles on hand, which are losing value. Many of our customers have called in to ask if they are able to trade in their motorcycles for a newer model, which means we would be suffering in the long run.

“It will also take a much longer time to sell them.”

He added that he hopes the latest measures will be temporary. 

Mr Stewart suggested different COE categories for motorcycles, based on, for instance, the class of the motorcycle licence, which is similar to how car COEs are structured. 

Others, like airfreight planner Rahmadiansyah Abdul Latif, are looking to see how the system can benefit them. The 26-year-old said he was pleasantly surprised when COE premiums for motorcycles came tumbling down in the latest tender.

Mr Rahmadiansyah, who has owned 14 motorcycles in the past and now rides a Yamaha Aerox NVX 155A, said: “I’m thinking of buying a new motorcycle while the COE is at its current price, before it shoots up again.

“If it increases again, the motorcycle will be an investment because the prices of second-hand motorcycles would follow suit and I can then make a profit.”