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COE prices for big cars hit $75,889

Just days after the government announced a cut in the vehicle growth rate, Certificates of Entitlement (COE) prices shot skyward on Wednesday.

COE prices for cars above 1,600cc hit $75,889, a significantly large jump from the previous $63,600, while COE premiums for cars up to 1,600cc ended at $56,112, from $50,289 two weeks ago.

COE prices for commercial vehicles also rose from $32,801 to $37,011.

These are the highest prices yet this year.

Open category COEs saw an $8,542 increase to S$73,600, while motorcycle premiums climbed $2,078 to end at $2,091.

Last Friday, the government said the 1.5 per cent annual allowable growth rate in vehicle population would be cut to 0.5 per cent from August 2012.

Chin Kee Min, senior manager of Kia Motors, told Channel NewsAsia that many people expected an increase in prices in the short term so they rushed in to buy cars.

“So a lot of the distributors also rushed to secure the COEs,” he said. Kia Motors saw sales double over the weekend following the government’s announcement.

Yet Chin does not think the cut in vehicle growth rate may result in a long term rise in COE premiums.

“Growth might be cut but there may be a chance that deregistration is actually going to increase, because more cars are going to be deregistered,” he was quoted as saying.

"10 years ago, the government started to release more cars, so both factors may end up mitigating each other and you won't see a huge fluctuation in the COE quota," he said.