Like the rest of the world, Singapore’s automotive industry has been severely affected by the COVID-19 outbreak. As the economy continues to slow down and businesses take on new measures to survive, a unique set of challenges has been raised for the automotive industry in Singapore.
Specifically, COE prices are being closely monitored with bidding exercises having resumed recently since the end of the circuit breaker. COE quotas are mainly determined by the number of cars taken off the road in the preceding quarter, and thus have a tendency to fluctuate.
WIth various factors such as the impact of the lockdown and changing consumer sentiments, COE prices have been subjected to various changes in the past few months. Keep reading to find out how exactly COVID-19 affects COE prices and what to expect in the next few months.
The rise in demand affecting COE prices
As COE prices change depending on the number of cars on our roads, the increasing demand for cars will inevitably contribute to rising COE premiums.
Resuming operations of motor vehicle dealerships and showrooms
Many car companies in Singapore have adapted to these unprecedented times and digitalised their services to keep their businesses running. By moving their services online as well as offering deals and promotions, it is evident that there was still a demand for cars as people were still purchasing and selling their cars during the circuit breaker period.
With motor dealerships and showrooms now operating as per normal, the sale of cars is likely to increase even with the ongoing economic recession. The increase in demand for cars would hence result in higher premiums resulting in the hike of COE prices. In fact, the COE premiums which goes to illustrate the rise in demand for cars in Singapore following the suspension of exercises in the previous months due to the circuit breaker.
As the coronavirus outbreak threatens to impact our lives for the foreseeable future, Singaporeans may consider getting their own cars to travel in, in order to minimise exposure and reduce the risk of infection which may arise from taking public transport. These concerns may play a part in the rise of demand for cars.
For those who are afraid of making the long term commitment to purchasing a new car, long-term car rentals are a more affordable and viable option. Given the impact the COVID-19 outbreak has had on our economy, being savvy with expenses is a logical way to deal with the current economic climate. Long-term rentals are a great option for those who are enticed to get their own cars to ensure a safer mode of travel.
With a long-term rental, you will need to pay less cash upfront and free yourself from associated costs such as insurance or maintenance fees. It also gives you the flexibility of terminating your lease contract once it has ended and allowing you to re-evaluate your priorities and options — especially if the coronavirus situation improves giving rise to a safer environment.
What to expect in the near future?
In a country like Singapore which has an extensive and efficient public transport system, the question of whether owning a car is necessary definitely crosses our minds at some point. As mentioned earlier, with COVID-19 in our midst, several other factors are now added into the equation when it comes to making a decision on whether to renew your COE or get a new car.
While COE prices have seen a hike recently, especially with Singapore having transitioned to phase 2, it is important to note that the trend for the COE premiums cannot be predicted with absolute certainty.
As mentioned earlier, given the long-stretching effects of the pandemic on our economy, ultimately it is important to assess your financial situation despite the fluctuation in the COE prices that is to be expected in the coming months. Before you decide to make a huge financial commitment such as owning your own car, it is crucial that you consider various factors to prevent yourself from taking on a financial burden that may result in a dent in your finances if not managed properly.
Alternative Transport Options
While Singapore has taken various efforts to keep our environments safe, for those who prefer getting around on certain days in a private vehicle, car rental is an option you can consider! Here at ETHOZ Car Rental, we offer customised car rental services that’ll meet your unique needs during this period.
You can rest assured that high standards of health and safety will be adhered to through minimal contact during car collection as well as thorough sanitisation of the vehicle. If you’re looking for a more private mode of travel but you’re not ready to commit to the costs of owning a car in Singapore, simply contact ETHOZ Car Rental to discuss your options now!