Aggressive bidding by parallel importers has pushed Certificate of entitlement (COE) prices to the highest in 26 months.

Although the number of bids received were 10 per cent less than the previous round, COE prices in May doubled that of a year ago.

COE premiums for cars of 1,600cc and below increased by 5.3 per cent to close at $17,010 yesterday. Similarly, the percentage increase in the COE prices for cars above 1,600 cc was roughly the same, as prices rose by 5.7 per cent to finish at $18,900.

Prices of the open category COE, mainly used for cars, shot up by 9.3 per cent to reach $19,510.

The last time COE prices breached the $20,000 mark was in March 2005.

Soaring by 20.5 per cent, COE prices for commercial vehicles closed at a seven-month high of $10,000. This COE cost a dollar just two months ago.

Meanwhile, COE premuims for motorcycles inched upwards by 0.5 per cent to $1,352, which is the highest since December 2000.

Motor traders cited the increasing popularity of parallel imports as the main reason for the higher prices.

About 20 per cent of the estimated 40,000 new cars sold in the first four months of the year were parallel imports.

As parallel importers normally sell a small number of cars as compared to authorised agents, they are able to bid more aggressively for COEs.

Automobile Association of Singapore President Bernard Tay projects that the upward trend will persist in the next few months since there are fewer COEs available this year.