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Renewing your motorcycle COE. Expert tips.
Motorcycle COE explained
The premium for a Certificate of Entitlement (COE) for any class of vehicle is subject to the market forces of supply and demand.
While consumer sentiment can drive demand – and therefore Quota Premiums (QPs) – up, motorcyclists have faced a relatively difficult time lately.
Price rises
Given that the average Quota of Category D motorcycle COEs has gone up by 4.5% compared to a decade ago, one has to assume the demand has gone through the roof – Quota Premiums (QPs) have increased by a whopping 543% on average in the same periodi.
By comparison, Category A COEs for cars up to 1,600cc or 97Kw have seen an increase in Quotas of 63% and an increase in QPs of only 28%ii.
Is this market forces at work? There was an increase in quotas for the Cat A cars, so if there is less pressure on premiums? Or is there something else going on?
What happened?
There are a number of possible explanations for the change, a global pandemic being an obvious influence. There were no bidding exercises in April, May or June in 2020, and the average QP jumped 70% from the preceding months to the remaining exercises that year.
Whether that is pent-up demand or an increase in demand from delivery riders is difficult to say, but the QP has never returned to pre-pandemic levels, peaking at $13,189 in November 2022, suggesting there may be other forces than pent-up demand at play.
Higher taxes
There is some sensitivity to the inequities in the motorcycle market, where you have people competing for COEs to work as delivery riders against people purchasing much more expensive machinery for occasional weekend rides.
The tax rules were changed in 2017 to address this by slapping heftier Additional Registration Fees on more expensive bikesiii, but it is hard to say how effective this has been.
Based on the averages of the five years before and after 2017, manufacturers of more expensive motorcycles like BMW, Ducati and Harley-Davidson saw new registration declines of 38%, 9%, and 33%iv respectively, but the numbers are fairly small. That Honda saw its biggest sales years for the decade in 2018 and 2019 suggests the taxes are working as intended.
Then again, the population of up-to-200cc machines (which tend to be cheaper) has declined 13% over the decade, while the 201-400cc population has increased 24%, and the population of 401cc-plus machines has increased by 50%v. Interestingly, the overall motorcycle population has declined by 0.6% during that time, so demand may be playing a role in the higher COE prices, particularly demand for renewals from owners of larger-capacity machines.
Stamping out speculation
Some changes to the COE bidding rules suggest there may be something else at play as well.
In the last few years, the Transport Ministry has tweaked the Cat D bidding process. The Temporary COE bid deposit was raised from $200 to $800, and finally $1,500 in 2023, and the validity period reduced from three months to one in an apparent gambit to prevent speculative bidding by dealers.
Where to next?
Gazing into a crystal ball to divine future trends is a dangerous occupation, but there are some signs that higher Cat D COE premiums are likely to prevail into the future.
The main reason to think so is that there is a zero-growth policy for the motorcycle population, so assuming demand stays the same, and assuming the number of motorcycles deregistered each month stays constant, there’s little downward pressure.
Those are two heroic assumptions, however.
Demand is unlikely to stay the same if there is a recession, for instance, and you may expect premiums to drop when that happens. In the Global Financial Crisis Cat A and B COEs nosedived, but Cat D stayed steady, albeit at around $1,000vi. With QPs at more than 10 times that amount, there is likely to be less demand when economic sentiment is down.
On the other hand, given the increase in population of larger-capacity machines, there are more committed motorcyclists who have undertaken the onerous licensing process and are therefore more likely to want to renew. That indicates ongoing support under the Quota Premiums, regardless of the economic background.
What to do when it is time to renew your COE
Unfortunately, the vagaries of the system mean there’s little you can do to minimise the cost of renewing your Cat D COE beyond keeping an eye on the market in the years approaching its expiry. You may get lucky with a downward trend in prices, which may make it worthwhile renewing earlier, or you may get stuck with the Prevailing Quota Premium (see below).
In any case the process of renewal is straightforward enough:
- Renew online here at One Motoring (be advised your bank’s transfer limits may need adjusting before renewing).
- Be prepared to pay the PQP, which is the average of COE premiums for the last three months for a 10-year COE extension. Check the PQP rates here.
- You can reduce costs by renewing for five years, and paying half the PQP – but be aware that at the end of that five-year COE your motorcycle will need to be scrapped – no further renewals are allowed.
- You can renew up to a month after your COE expires but will pay a $50 late renewal fee, and if you miss the cutoff you will need to scrap the motorcycle, so remember to do it in time!
- If Quota Premiums are quite low, you can choose to renew early, but you will forfeit the remainder of your current COE.
- If your motorcycle was first registered before July 1, 2003, be aware it has a statutory lifespan that expires on June 30, 2028.
For the most up to date COE prices go to https://onemotoring.lta.gov.sg/content/onemotoring/home/buying/coe-open-bidding.html
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