COE and Car Prices

[brattzz]

I agree, how do we be self-sufficient?
Who can we go to for sound advise? without paying thru our nose?
what can we small noobies do? how can we increase our knowledge without been asked to pay thousands of course fees?

:O

I'm a small noobie and i WANT to be self-sufficient! :O

[barista]

Personally I think its great that the govt is not imposing so many restrictions and regulations. This allows all of us to make a choice on how we want to manage our finances and our lives. Of cos this also means that we need to exercise personal responsibilities and not engage in reckless behaviour. Such as borrowing on 0% downpayment on a 10 year car loan you cannot hope to finance.

If someone is stupid enough to do that, then we should let him suffers the fate of his decision; and let him learnt his lessons. We should not be saying that to protect stupid people like him, let put in restriction in place so that people cannot borrow with 0% downpayment.

Hi, it is precisely for the above that some regulations are needed. Majority of people are not financial savvy, leaving to "free market" forces will be unthinkable.

[Musicwhiz]

Hi, it is precisely for the above that some regulations are needed. Majority of people are not financial savvy, leaving to "free market" forces will be unthinkable.

I tend to take the middle ground. Free market forces are well and good for people to self-regulate; but the Govt needs to step in if things get out of hand, like for the case of scams and runaway speculation for instance.

For the case of cars, since Singapore is a very tiny red dot, it is understandable why Govt wants to control the supply of cars. What I don't understand, however, is how they managed to screw up the car population growth rate for the last 5 years! Policy problems concerning our dear Transport Minister?

[Musicwhiz]

This is very scary!

Dec 23, 2010
COE premiums breach $70,000 mark
By Christopher Tan, Senior Correspondent

IT IS going to be a blue, blue Christmas for car buyers and sellers alike after certificate of entitlement (COE) premiums continued their phenomenal spike.

While two out of five COE categories ended slightly lower at the latest tender yesterday, the other three went through the roof.

COEs for cars up to 1,600cc softened from the previous tender, ending 3.1 per cent lower at $46,129 - still among the highest levels in the past 10 years.

COEs for cars above 1,600cc, however, stayed resilient, rising by 15.2 per cent to close at $72,001.

Open COEs - which can be used for any vehicle type, but end up mainly for bigger cars - also continued their surge, hitting $76,102. They chalked the biggest percentage gain yesterday of 17.3 per cent.

Commercial vehicle premiums ended 4.7 per cent higher at $33,501, while motorcycle premiums were 8.8 per cent lower at $1,551.

Motor traders were shocked by the price spiral as it had come just a fortnight after the massive hikes of the last tender, which saw the single biggest increases in more than a decade, with rates for bigger cars rising by more than 30 per cent.

Premiums are now among the highest since the COE system started in 1990. The last time premiums were this high was in the late 1990s.

In 1994, they breached $100,000 twice because of speculation. After anti-speculation measures were introduced, rates softened but still hovered between $50,000 and $75,000 from 1995 to 1999 on the back of a meagre COE supply.

'Prices are running ahead of my own expectations,' said Mr Cheah Kim Teck, motor operations chief executive of multi-brand agent Jardine Cycle & Carriage. 'But I think it will get worse before it gets better. I don't see prices coming down next year.'

Car prices, which have gone up by as much as $50,000 from a year ago, are expected to climb even higher after the latest COE results.

Traders expect the high prices to dampen buying interest severely, seeing how a Japanese family sedan which cost a little over $50,000 last year is now retailing at more than $100,000.

Mr Teo Hock Seng, managing director of Hyundai agent Komoco, said his company might start quoting prices without COE.

Mr Teo, who is also the Motor Traders Association (MTA) president, said the year-end rush to meet sales targets has driven many companies 'to deliver on every booking they have'.

'Whoever is brave gets the COE,' he put it plainly.

The 'brave', industry watchers reckon, are the luxury car sellers, led by the German brands.

A perennial tussle between BMW and Mercedes-Benz to be the No. 1 luxury marque is fuelling the frenzy. As at last month, the two were neck and neck, having registered about 4,000 cars each.

But with such lofty COEs, observers are doubtful if sellers - who often subsidise the cost of a certificate to clinch sales - can make decent profits, if at all, even for the premium brands.

Cycle & Carriage's Mr Cheah said: 'There is no money to be made this round. It is just window dressing and attempts to lighten the inventory load.'

The MTA had earlier this year made an appeal to the Government to help mitigate the sharp cut in COE supply. But the association has not received any word yet.

christan@sph.com.sg

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Business Times - 23 Dec 2010

Motorists survey damage from $72,000 COEs

Dealers taken aback by Cat B surge that comes weeks after $14,612 hike

By SAMUEL EE

(SINGAPORE) The COE premium for the big car category continued to climb strongly in the last bidding exercise of the year yesterday, this time to a 15-year high, with its sharp ascent surprising most dealers.

A Category B certificate of entitlement - for cars above 1,600 cc - now costs $72,001, up $9,499.

Two weeks earlier, Cat B had jumped $14,612, shocking the market by rising to a 13-year high. As a result, new orders slowed down as distributors adjusted their sticker prices upwards to reflect the new COE price levels.

Only two premium makes did not raise prices, said the sales manager of a luxury dealership.

'It could be due to the desire to gain market share just before the year-end,' he added.

The last time that an equivalent big car COE premium was in the $70,000-plus range was from early to mid-1995. But back in 1995, the total market size for new cars was even smaller, at about 31,000 units. This year, total new registrations are expected to be over 41,000.

But the sales manager pointed out that comparing annual registrations may not reveal the full picture. 'In the second half 2010, the COE quota was small, whereas the first half was a bonus,' he explained.

He described the number of bids in Cat B yesterday as 'heavy'.

'The interest for luxury cars is still there. Perhaps some dealers are bidding for the future,' he said, referring to market concerns of a further reduction in the COE quota from February 2011 onwards.

If so, that would explain the sharp hike in Cat E, the open category. Currently used to register Cat B cars, Cat E yesterday soared $11,202 to $76,102.

But Cat A - for cars below 1,600 cc - slipped $1,474 to $46,129. Cat C - for goods vehicles - rose $1,500 to $33,501, while Cat D - for motorcycles - fell $50 to $1,551.

'The Cat A premium is softer because customers in this segment are more price-sensitive,' said the boss of a mid-sized mass market dealership.

He added that if not for late bids from the taxi companies, the Cat A premium would have been slightly lower.

In yesterday's tender, the strength of the passenger car categories was evident. Cat A and B were the first off the mark, with Cat B already surpassing its previous level of $62,502 with about 40 minutes remaining. Not more than 10 minutes after, Cat E joined the party by jumping straight to about $58,000.

[koh_52]

Tonite on news said next year COE may touches 100k....crazy

COE S$72k = RM 170k

CAN BUY A HOUSE IN JB OR CAN BUY 4 PROTON...heheh

[Jon-san]

As usual, the rising costs hits mainly the middle incomes. To the rich, $75k for a COE isn't much of a drop in the pond. So higher property prices deprives us of our homes, higher COEs deprives us of our cars (am not a driver, have to confess). Win-win situation for the govt, increased income from higher stamp fees for higher property prices, increased income from higher COE prices, increased share of taxes of increased profits from transport companies due to higher passenger traffic on public transport, and all the while, ERP is going up. Well done!

[Musicwhiz]

As usual, the rising costs hits mainly the middle incomes. To the rich, $75k for a COE isn't much of a drop in the pond. So higher property prices deprives us of our homes, higher COEs deprives us of our cars (am not a driver, have to confess). Win-win situation for the govt, increased income from higher stamp fees for higher property prices, increased income from higher COE prices, increased share of taxes of increased profits from transport companies due to higher passenger traffic on public transport, and all the while, ERP is going up. Well done!

I am beginning to feel this myself, even though I had bought my property in 2004 and I do not own a car. I know of friends' friends who purchased a resale HDB @ $500K or an EC at $700K, and they maxed out the leverage and the tenure as well. One wonders how they will cope once interest rates start to rise......

As for cars, even for those who purchased earlier than late 2009 or 2010, they have to face rising costs of maintenance as petrol prices are increasing yet again (up 4c today).

[barista]

I would think the LTA is correct to stand firm against "relief" measure against rising COEs. If you drive(i am a driver), you would have notice the overcrowding situation in expressways and main artery road of various estate.

OT a bit..
just looking at the various on-going road upgrading/widening, you would have notice the situation is real bad to warrant some firm action.

even the mrt and neigbourhood shopping mall is packed!

[Jon-san]

Who are the main listed companies that are authorized by LTA to conduct road works? I can think of only OKP ATM, other than the foreign biggies.

[FFNow]

OKP is one of LTA's major contractors I think. They are currently doing the raising of Orchard Road awarded by PUB also.