COE and Car Prices

[Musicwhiz]

The Straits Times
May 10, 2012
COE prices down in two categories

By Daryl Chin

CERTIFICATE of entitlement (COE) prices generally continued to climb in the latest tender yesterday, although they fell slightly for smaller cars and those in the open category.

The Government has signalled that it will take steps to ease supply cuts for the certificates - which drivers need to bid for before they can buy a vehicle. However, analysts said the effect will be felt only when more concrete measures are implemented down the road.

COE prices for cars with engines bigger than 1,600cc jumped to $92,050 from $91,000 last month. Premiums for commercial vehicles - such as buses or trucks - rose from $57,589 to $58,553, while those for motorcycles climbed from $1,924 to $2,021.

However, COE prices for cars up to 1,600cc fell to $62,600 from $64,201 three weeks ago, while for COEs in the open category - which can be used to register any vehicle but are mostly used for bigger cars - prices dipped to $88,990, from $92,010 before.

Singapore Vehicle Traders Association secretary Raymond Tang said prices are likely to remain high in the coming months, unless more is done to increase the supply of certificates.

'The main problem is that there aren't enough COEs going around,' he said. 'Already the Government has said they will look into it, but even then, the effects downstream might not be significant.'

The supply of certificates is likely to shrink further in August when the Government caps the growth in the number of vehicles on the road at 0.5 per cent, down from 1.5 per cent now.

Last weekend, Transport Minister Lui Tuck Yew announced that the authorities were considering staggering this move. At the moment, they are reportedly reducing the supply of certificates by 6 to 7 per cent a month to make up for an oversupply in previous years. Mr Lui said this process could also be slowed down.

Mr Michael Wong, vice-president of the Motor Traders Association, said it is still too early to know if the new measures will turn things around.

'The issue stems from car owners holding on to their vehicles as it's too costly for them to scrap the old car and purchase a new one.'

Car owners who spoke to The Straits Times appeared to back up this trend. Mr Gerald Lim, a teacher who has a seven-year-old Toyota Vios, said he had been wanting to buy a new vehicle since last year, but was holding out due to climbing COE prices. 'Since I cannot imagine life without my car, in the worst-case scenario, buying a new COE to use an old car might be all I can afford,' he said.

[Musicwhiz]

The Straits Times
May 24, 2012
COE prices continue to slide as buyers adopt wait-and-see stand

CERTIFICATE of entitlement (COE) prices ended lower at the latest tender yesterday, continuing a slide that started soon after the Government said it would manage the severe shortage three weeks ago.

The premium for cars up to 1,600cc and taxis ended 7.3 per cent lower at $58,001. For cars above 1,600cc, it fell by 7.4 per cent to close at $85,216.

COEs in the open category, which are for any vehicle type but end up being used mainly for bigger cars, finished 2.4 per cent weaker at $86,889.

The premium for commercial vehicles closed at $57,106, down 2.5 per cent from two weeks ago, while the one for motorcycles slipped by 6.5 per cent to $1,890.

Transport Minister Lui Tuck Yew said three weeks ago that he had asked the Land Transport Authority to explore ways to mitigate a crunch in the supply of certificates that could last until next year.

For example, plans to lower an annual cap on the growth in Singapore's vehicle population from 1.5 per cent to 0.5 per cent could be introduced more gradually.

Mr Lui said he had also asked the authority whether it could defer a planned measure to claw back certificates following an oversupply in past years.

The number of certificates, which motorists must secure before they can own a vehicle, has been falling since 2009. Last year, there were fewer than 30,000 for cars, and this year, the figure is expected to fall below 25,000.

Between 2004 and 2008, the annual average was 105,000.

Motor traders said that Mr Lui's statements had created some uncertainty among buyers, who are now adopting a wait- and-see stance.

Taxi companies, however, are not.

Yesterday, they submitted some 230 bids, or one-quarter of the total made at the tender. The highest bids, at $60,999, were from SMRT.

This helped to push the premium for cars up to 1,600cc from around $52,000 to $58,000 within the final minutes of bidding, said Mr Ron Lim, general manager of Nissan agent Tan Chong Motor.

CHRISTOPHER TAN

[kichialo]

Motor traders said that Mr Lui's statements had created some uncertainty among buyers, who are now adopting a wait- and-see stance.

Taxi companies, however, are not.

Yesterday, they submitted some 230 bids, or one-quarter of the total made at the tender. The highest bids, at $60,999, were from SMRT.

This helped to push the premium for cars up to 1,600cc from around $52,000 to $58,000 within the final minutes of bidding, said Mr Ron Lim, general manager of Nissan agent Tan Chong Motor.

The culprit as always is ..... hehehe.

[shanrui_91]

A temporary solution to push inflation effect to 2013. If not for this change, 656 COEs per month will be cut from Aug 2012 onwards

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LTA Implements Measures to Ease Transition to Lower Vehicle Growth Rate

1. The Land Transport Authority (LTA) has completed its study on measures to ease the transition to a lower vehicle growth rate of 0.5% p.a. in light of the slow-down in the rates of de-registration in recent months.1

2. The following measures will be implemented to ease the transition with effect from August 2012.

More gradual reduction in vehicle growth rate

3. In October 2011, LTA announced that the vehicle growth rate will be reduced from the current 1.5% p.a. to 0.5% p.a. from August 2012. Following this review, the vehicle growth rate will now be reduced to 1.0% p.a. from August 2012, before being further reduced to 0.5% p.a. from February 2013 to January 2015. This will make available about 390 more COEs per month from August 2012 to January 2013. These additional COEs are equivalent to about 10% of the current monthly quota.

Deferment of COE adjustments for over-projections in 2008/2009

4. A total of 4,789 remaining adjustments for over-projections in Quota Years 2008 and 2009 as well as expired COEs from 2009 were scheduled to be spread over bidding months from August 2012 to January 20142. These adjustments will now be deferred for 1 year from August 2012 to July 2013. They will resume from August 2013 to January 2015. This will make available 266 more COEs per month (or about 7% of the current monthly quota) from August 2012 to July 2013.

5. These two measures will bring about a smoother transition to a lower vehicle growth rate, as the Government continues to manage the growth of the vehicle population at a sustainable pace.

Reduction in Contribution Rate to Category (CAT) E

6. Currently, 25% of COEs from de-registered vehicles in each vehicle category form the COE quota for the Open Category (CAT E), which can be used to register vehicles from CAT A to CAT D, to provide flexibility for changes in the vehicle mix.

7. To maintain a more stable supply of COEs in each COE category under a lower vehicle growth rate, the contribution rate to CAT E will be gradually reduced from the current 25% to 20% from August 2012, and to 15% from February 2013. The effect of this is to return more COEs from de-registered vehicles to their respective categories, with proportionately fewer quotas in CAT E.

8. The quota for the COE bidding period from August 2012 to January 2013 will be announced in July 2012.

1 Replacement COEs will be issued in August 2012 to January 2013 for vehicles de-registered in January 2012 to June 2012. The average number of vehicles (excluding taxis) de-registered per month between January 2012 and April 2012 is 2,395, compared to a monthly average of 2,696 between July 2011 and December 2011.


2 A total of 17,558 adjustments for over-projections in Quota Years 2008 and 2009, as well Quota Years 2008 and 2009, as well as expired COEs from 2009 were scheduled to be spread over 46 bidding months from April 2010 to January 2014. An adjustment of -12,769 has already been factored in the quotas from April 2010 to July 2012.

http://app.lta.gov.sg/corp_press_content...pdt25gh3dj

[Musicwhiz]

The Straits Times
May 31, 2012
COE prices unlikely to go into free fall
But new measures may moderate premium hikes, say industry players

By Christopher Tan

THE latest tweaks made to the certificate of entitlement (COE) system may moderate the increase in premiums, but are unlikely to cause prices to go into free fall in the months ahead, motor traders and industry watchers said.

Yesterday, the Land Transport Authority (LTA) announced that, first, the vehicle population growth rate will be cut to 1 per cent from August, instead of to 0.5 per cent as planned. The 0.5 per cent rate will kick in only from next February.

Second, an exercise to reduce COEs to compensate for an oversupply in 2008 and 2009 will be deferred for a year to July next year.

And third, the number of Open category COEs will go down, because its supply will be made up of smaller contributions from the other four categories; conversely, the number of COEs in the other categories will grow modestly.

Singapore Vehicle Traders Association secretary Raymond Tang said the August to January quota will still shrink, but 'the reduction will be more moderate'. The premium for cars up to 1,600cc might still go up to $70,000 for a few months.

This is because the mitigating measures will not fully offset a sharp drop in supply in this category.

Industry players had been bracing themselves for this category to shrink by more than 60 per cent before the LTA's latest steps.

Mr Tang expects COE prices for bigger cars to continue to 'shoot up', given that fewer COEs on the whole will be available for this group of bidders.

This is because the Open category, on which big-car sellers and buyers rely heavily, will shrink sizeably.

In recent months, the COE premium for cars up to 1,600cc breached $60,000, while that for bigger cars crossed $90,000.

This has, in turn, sent car prices to near record levels and contributed to a rise in the inflation rate.

Industry players said the decision to redistribute Open COEs - which can be used to register any vehicle type but end up largely for big cars - will go down well with the public.

Mr Ron Lim, general manager of Nissan agent Tan Chong Motor, described the move to trim the Open category as 'logical'.

'COEs in this category are used almost exclusively for bigger cars,' he said.

But motor companies which sell predominantly bigger cars are not thrilled.

Audi Singapore managing director Reinhold Carl said 'it will not be easy' for premium marques, and expects COE prices for cars above 1,600cc to go up further.

However, he said he reckoned a $100,000 COE premium was unlikely at the moment.

This was also the view of Dr Park Byung Joon, who heads the Master of Science programme in urban transport management at SIM University.

'For the time being, these measures will help avert the $100,000 COE,' he said, in reference to the all-time record premium of $110,000 in 1994.

He noted that when the number of COEs supplied last year was about 30,000, COE prices were floating within the $50,000 to $70,000 range.

With these measures, the number of COEs available this year will be around the same as last year's; thus, it would be reasonable to speculate that COE prices will be around those of last year's for the time being, he said.

Motor traders, however, expect prices to surge in the coming tender next week.

Mr Lim said this could be fuelled by 'pent-up demand' - from buyers having held back in the past month in anticipation of an increase in supply.

christan@sph.com.sg

[Musicwhiz]

The Straits Times
Jul 5, 2012
COE premiums up for all categories but one

JUST like in previous tenders, bids by taxi companies again pushed up the premium for Certificates of Entitlement (COEs) for cars up to 1,600cc.

Just five minutes before the latest bidding exercise closed at 4pm yesterday, the premium was hovering at $28,000.

It rocketed in the final minutes, fuelled by bulk bids from taxi companies. They put in about 170 bids, accounting for about 20 per cent of bids for this category, with some bids as high as $65,000. The premium finished 0.7 per cent higher at $59,421.

Premiums for all other COE categories but one also ended higher.

The COE premium for cars above 1,600cc closed 3.6 per cent lower at $82,289 - yet another sign of nervousness over the global economy, industry players said.

But the premium for Open category COEs, which can be used for any vehicle type but ends up mainly for bigger cars, ended 3.1 per cent higher at $86,999.

This reflects an imminent cut in the supply of Open category certificates starting next month, which is likely to drive prices north.

The commercial-vehicle COE cost was 1.9 per cent higher at $55,556, while the motorcycle premium climbed 2.8 per cent to close at $1,760.

Mr Ron Lim, general manager of Nissan agent Tan Chong Motor, said the premium for cars up to 1,600cc was 'not reflective of the car market'.

'A lot of consumers are holding back as they still believe there will be more COEs come August,' he added.

The next six-monthly allocation of COEs starting next month is likely to see a 40 per cent supply shrinkage in this category - the mainstay of most car buyers.

Mr Lim said the commercial-vehicle COE premium has stayed firm because unlike many economies in the West, many big infrastructural projects are still ongoing here, thus boosting the demand for heavy vehicles.

CHRISTOPHER TAN

[Musicwhiz]

From TODAY Online:-

More COEs for big cars for next 6 months
Updated 04:10 PM Jul 12, 2012

SINGAPORE - There will be more certificates of entitlement (COEs) for buyers of large cars, commercial vehicles and motorcycles for the next six months starting next month, but small car buyers will have to content for fewer certificates.

The Land Transport Authority said today there will be a total of 3,226 COEs per month from August to January, next year - down 12.7 per cent from the 3,694 available monthly between February and this month.

There will be 786 COEs per month for cars up to 1,600cc and taxis, 36.6 per cent less than the 1,239 per month for the previous six months. For cars above 1,600cc, the 701 COEs a month represent a 0.29 per cent increase from the 699 previously. COEs in the Open Category, which can be used to register any vehicles but are mostly used for large cars, there will be 485 COEs a month, a 21.4 per cent drop from the 617.

There will be 894 COEs per month for motorcycles, 9 per cent more than the 820 per month for the previous six months.

[morten]

The headline highlighted big car COE supply will go up. Ya. By 2 to 701. Ignored the massive plunge in Cat A supply.

Looks like small car prices will shoot up immediately from now.

Sent from my GT-I9100 using Tapatalk 2

[paullow]

the way to not get entangled in this high coe mess is to use cars which are 8-9yr old. downside limited by paper+ bodyvalue. limit as to how much dealers can mark up prices. thats one way to escape the coe heat. imo

[Musicwhiz]

Taken from CNA website.
http://www.channelnewsasia.com/stories/s...34/1/.html

COE prices for cars up sharply
Posted: 18 July 2012 1622 hrs

SINGAPORE: Certificate of Entitlement (COE) premiums rose across the board at the end of the latest bidding exercise on Wednesday.

The sharpest increase was in Category A (cars 1,600cc and below and taxis). Here, the premium rose 15.5 per cent or S$9,235 to S$68,656.

This was followed by Category B (cars above 1,600cc), where the premium rose nearly 10 per cent or S$8,212 to S$90,501.

In the Open Category, where the COEs can be used for any vehicle type but which are used mostly for cars, the premium rose nearly 7 per cent or S$5,701 to hit S$92,700.

The COE prices for both commercial vehicles and motorcycles also moved up. The premium for commercial vehicles went up S$249 to S$55,805 while the premium for motorcycles increased S$99 to S$1,859.

This latest round of bidding will be the final exercise before the new quota numbers for the next six months (August to January 2013) take effect.

The Land Transport Authority announced on July 12 that there will be 3,226 COEs available per month in the next six months, which are 12.7 per cent fewer than the number for the last six months.

- CNA/cc