Higher Proportion of Less Expensive Cars in Category A with New Categorisation Criteria

News Releases 05 Mar 2014 COE re-categorisation Open Market Value (OMV) COE system

  1. Car registration data in the first month since the re-categorisation of Category (Cat) A/B cars in February 2014 shows that there has been a significant decrease in the median Open Market Value (OMV) of cars registered in Cat A, and a greater number of cars with lower OMV registered in Cat A.[1] The objective of the re-categorisation was to ensure that Cat A better achieves its original social equity purpose of serving mass-market car buyers, in view of the rising proportion of higher-end cars appearing in Cat A in recent years.

Median OMV in Cat A decreased by 28%

  1. The median OMV of cars registered in February, using Cat A Certificates of Entitlement (COEs) obtained after re-categorisation, decreased by 28% to $18,845, compared with $26,147 for COEs obtained in the previous six months (August 2013 to January 2014).

Higher proportion of lower OMV cars registered in Cat A

  1. Correspondingly, there were more cars with lower OMV registered in Cat A using COEs obtained after the re-categorisation, compared to those registered using COEs obtained in the six months prior to re-categorisation. The percentage of cars with OMV at or below $15,000 has increased from 8% to 25% of all Cat A registrations; those with OMV at or below $20,000 has increased from 26% to 58%; and those with OMV at or below $25,000 has increased from 43% to 74%.  Please refer to Table 1.[2]

Table 1: Cars registered in Cat A using COEs obtained before and after implementation of new categorisation criteria

Registrations as at end-February 2014

Cars registered in Cat A using COEs obtained in:

Aug 2013 – Jan 2014
(Six months before new categorisation criteria)

Feb 2014
(First month after new categorisation criteria)

No. of cars registered in Cat A

4,245

441

Median OMV

$26,147

$18,845

Percentage of cars with OMV ≤$15,000

8%

25%

Percentage of cars with OMV ≤$20,000

26%

58%

Percentage of cars with OMV ≤$25,000

43%

74%

Other social equity elements in car ownership policies

  1. In addition to the Cat A/B categorisation, other social equity elements in our car ownership policies include the tiered Additional Registration Fee (ARF) introduced in March 2013. Cat A cars are therefore generally subject to significantly lower statutory costs than Cat B cars. The total statutory cost[3] payable for a Cat A car was $98,769 on average compared to $148,250 for a Cat B car, based on registration data from August 2013 to February 2014.  If we exclude the COE premium, the corresponding average statutory cost was $26,932 for a Cat A car, and $71,637 for a Cat B car. (Monthly comparisons of car package prices in the market and the various cost components are available at   https://www.onemotoring.com.sg/content/onemotoring/home/buying/upfront-vehicle-costs.html.)

[1] With the re-categorisation, cars must meet two criteria to qualify for registration under Cat A: (i) the previous criterion that the engine capacity should not exceed 1,600cc, and (ii) a new criterion that the engine power should not exceed 97kW (equivalent to about 130bhp). This is effective for all cars registered using Certificates of Entitlement (COEs) obtained from the February 2014 first open bidding exercise onwards.

[2] These figures may change as vehicle buyers have up to six months to register a car upon securing a COE.

[3] This includes the upfront costs of COE quota premium, ARF (100% of first $20,000 of OMV, 140% of next $30,000 of OMV and 180% of remaining OMV above $50,000), rebates/surcharges under the Carbon Emissions-based Vehicle Scheme, Excise Duty (20% of OMV), Goods and Services Tax (7% of OMV and Excise Duty) and Registration Fee ($140). It excludes road tax.

 

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