COE and Car Prices

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Rich people. Some times I wonder if we should complain too much about the high COE price - let the rich pay for the COE to increase government revenue as much as possible.
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(22-11-2012, 08:19 AM)egghead Wrote: Rich people. Some times I wonder if we should complain too much about the high COE price - let the rich pay for the COE to increase government revenue as much as possible.

Yes, but the result is you pay higher prices for daily necessities of life. And our PAPYs are famous for believing fully in meritocratic practices almost to the point that everyone should take care of themselves to their best of their own abilities and circumstances..
Therefore any welfare or subsidy is always an "evil necessity". Why then you think Singapore Gini Coefficient is ranked at the top of the World if not the highest in the world.
PAPY don't call "PAP" for nothing. "PAY AND PAY"
So in Singapore, who are the top people who group themselves as the most meritorious. In fact the group is very large if you consider civil service, army, gov. etc....TongueTongue
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2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

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(22-11-2012, 08:19 AM)egghead Wrote: Rich people. Some times I wonder if we should complain too much about the high COE price - let the rich pay for the COE to increase government revenue as much as possible.

I am not so sure mostly rich people are paying the COE. If that is the case, i agree we should not worry. We should welcome it and taking it as higher tax contributed by them.

Base on observation on HDB's car parks. There should not be the case. I admit that there are rich people staying in HDB, but majority should be middle class.

Cost of owning and using a car will almost equivalent to the cost of 10 years basic retirement needs, base on CPF minimum sum on SA now
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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Today, a person buying a Toyota Altis have to pay the following taxes (not counting ERP which is a form of road usage tax):

1. ARF - 100% OMV which is about $15,000
2. Duty - 20% OMV $3,000
2. COE - which is about $77,000
3. 10 years road tax - $7,400

All in he is paying a car-related tax bill of $ 102,400 over 10 years for this example.

I was looking at yesterday's BTO release and a 3-rm flat in non mature estate like Seng Kang costs $151,000. I can't help but see people who buy cars at today's price as rich people.
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(22-11-2012, 10:27 AM)egghead Wrote: All in he is paying a car-related tax bill of $ 102,400 over 10 years for this example.

I was looking at yesterday's BTO release and a 3-rm flat in non mature estate like Seng Kang costs $151,000. I can't help but see people who buy cars at today's price as rich people.

And there you have it! You've hit the nail on the head. Big Grin

Everytime I walk around my HDB estate I nearly get run over by the flashy BMWs, Mercedes, Peugeot, VW and other Continental brands. And I see many such cars parked around the car parks here as well.

Either these people are very rich (I guess most of them stay in HDB but own investment property - a condo perhaps), or they enjoy using loans to fuel their purchases! Tongue
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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(22-11-2012, 10:27 AM)egghead Wrote: Today, a person buying a Toyota Altis have to pay the following taxes (not counting ERP which is a form of road usage tax):

1. ARF - 100% OMV which is about $15,000
2. Duty - 20% OMV $3,000
2. COE - which is about $77,000
3. 10 years road tax - $7,400

All in he is paying a car-related tax bill of $ 102,400 over 10 years for this example.

I was looking at yesterday's BTO release and a 3-rm flat in non mature estate like Seng Kang costs $151,000. I can't help but see people who buy cars at today's price as rich people.

No doubt there're many rich people amongst our midst.

But, from my observation of people around me, I get the impression that there're many out there who're spending their hard-earned $$ (some even use future earnings thro' ready credit) to APPEAR rich ie. Nice House, Nice Car, Nice Clothes, Nice Gadgets, Nice Hols, Eat at Nice Restaurants, Kids go to Nice Schools,...

From the Net Worth POV...Rolleyes
Luck & Fortune Favours those who are Prepared & Decisive when Opportunity Knocks
------------ 知己知彼 ,百战不殆 ;不知彼 ,不知己 ,每战必殆 ------------
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COE is just like the stock mkt... when it is high no one sell and keep their cars
When it is low no one buy...
The thing about karma, It always comes around and bite you when you least expected.
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(22-11-2012, 10:54 AM)KopiKat Wrote: But, from my observation of people around me, I get the impression that there're many out there who're spending their hard-earned $$ (some even use future earnings thro' ready credit) to APPEAR rich ie. Nice House, Nice Car, Nice Clothes, Nice Gadgets, Nice Hols, Eat at Nice Restaurants, Kids go to Nice Schools,...

From the Net Worth POV...Rolleyes

You've brought up a very interesting point and I've always been curious on this - how do you tell if a person APPEARS rich or if he is REALLY rich? Tongue
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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(22-11-2012, 10:27 AM)egghead Wrote: Today, a person buying a Toyota Altis have to pay the following taxes (not counting ERP which is a form of road usage tax):

1. ARF - 100% OMV which is about $15,000
2. Duty - 20% OMV $3,000
2. COE - which is about $77,000
3. 10 years road tax - $7,400

All in he is paying a car-related tax bill of $ 102,400 over 10 years for this example.

$100k invested in 4% yielding stocks can yield $4k a year tax free. This translates to 200 taxi rides costing $20 per trip. After 10 years, you will still have your portfolio of stocks instead of a depreciated car ! Tongue
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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(22-11-2012, 11:45 AM)Nick Wrote:
(22-11-2012, 10:27 AM)egghead Wrote: Today, a person buying a Toyota Altis have to pay the following taxes (not counting ERP which is a form of road usage tax):

1. ARF - 100% OMV which is about $15,000
2. Duty - 20% OMV $3,000
2. COE - which is about $77,000
3. 10 years road tax - $7,400

All in he is paying a car-related tax bill of $ 102,400 over 10 years for this example.

$100k invested in 4% yielding stocks can yield $4k a year tax free. This translates to 200 taxi rides costing $20 per trip. After 10 years, you will still have your portfolio of stocks instead of a depreciated car ! Tongue

wonderful! i dont think it is hard to make 4% nominal returns on 100k in today's market. We can also see the 4% returns as 2 months of $2000 of after-tax salary.

If i have to choose between having a car today or 2 months of $2000 (after-tax) salary for the rest of my life, i would gladly choose the latter.
I cant imagine why many of my friends and relatives are so keen on getting a car lately.

On a side note, i intend to scrap my current car that is 8 years old, air con compressor spoilt, facing road tax renewal and car insurance soon, will the scrap value increase as the current COE is rising?? Smile Smile
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