Why must push up COE premium ???

[Ahyoo2002]

Sorry for post in Chinese, will try to translate some of it:

 

小型车拥车证成价　最后一刻才突破一元

 

李静仪 (2008-05-08)

 

　　市场对新车需求疲弱，导致三大汽车组别的拥车证最低成功标价连续第二期全面下跌，跌幅比上一期还要激烈。

 

　　其中，中小型汽车组（A组）成价昨天更是

[Ahliew]

cause of the rebate they have to give back buyers if coe falls below a certain level?

[Eyke]

what is "artificially high"? the bids are the bids; accept the reality of the system.

 

as long as dealers need COE to sell car, they will compete for COE and thus drive up COE prices.

 

but they want it as low as possible but not lower then their rebate level.

 

think about it.

[Nkps]

they can always lower their COE rebate what....

[Boxster]

Generally in my opinion the report may not report the actual market sediments regarding

 

"1) Why must they push the COE or maintain the COE premium at the high level?"

 

The reason is for CAT A & B they need to bid on behalf of the car buyer (eg they need to use the car buyer's IC" Therefore they cannot bid under the company's name.

The reason of the last 5 mins maybe because they have less booking therefore they need to make sure they secure a COE in order to deliver. So some dealers tends to place their bids near the last moment so that they would not have to adjust their bids just b4 the closing time.

 

I remember when I spoke to a PI regarding the 5K+ COE, the salesman told me that for cat A & B they are unable to do much when the bid was 5K near closing time as they do not have enough orders.

This is my view but of course as regarding to the report the dealers can choose to raise the bid to maintain the high COE premiums.

[Nutty]

forces... mysterious forces...

[Ahyoo2002]

The rebate, is either giving to LTA or giving back to customer, so no diff to them.

[Ahyoo2002]

I use the word "artificially high" bc the demand is not that high, if can not get this round, they can always bid next round, they have up to 6 bids to sercure the COE.

[Ahyoo2002]

maybe

[Qinglong]

it is good for the dealers when the COE is high.

this means the overall car price is higher, the loan amount is higher, and they get more commission from the finance company.

after all, it is the customer's money --> let the customer pay more and i earn a bit more from him

[Ahyoo2002]

Wah lau, if can sell the price higher, maybe every $1k they only can get extra $30 assuming 3% from loan amount, but buyer need to pay $1000 more

[Osiris]

cause of the rebate they have to give back buyers if coe falls below a certain level?

 

 

You got it all wrong.

 

First off rebates are ok for car dealers

 

Example

Car only price 40K

COE expected 15K (Max They bid 16K)

Final car price to customer 56K

Rebate Level set 13K

 

If COE is 14K, they pocket 2K difference

If COE 16K, they don't make from COE

If COE 17K, u don't get car

If COE 13K, they pocket 3K difference

 

If COE 10K, They pay gahmen 10K for COE, rebate u 3K. They pocket 3K difference.

If COE 5K, they pay gahmen 5K for COE, rebate u 8K, they pocket 3K difference.

 

Why should they worry about COE crash?

 

They are more piss when COE is near their reserve bid because they can't make more money from ur COE

Edited May 9, 2008 by Osiris

[Osiris]

It's peanuts they earn from loan amount

 

They earn more from COE difference per transaction

 

From loan, If they earn 3%, every 10K they earn $300

 

It will take about 30K raise in price to earn $1K more compare vs the previous bidding.

 

Now for every COE bidding, please see my above post for how much they can earn.

 

My ride, COE reserve was ~17K, COE was ~15K.

Like that they earn 2K liao.

[Leepee]

Wah this chinese reporter really LTA spin doctor lah.

Already start to scare people to buy before the september quota cut!

 

Reduced deregistration = Reduced car buyers.

Therefore reduce car quota will not cause COE price to suddenly shoot up high.

This is more true especially in this poor economic climate, of potential recession.

Those youngsters without cars, may not want to plonk down money to get their first car as yet.

 

The only time COE will start to rise upwards, is when economy is getting better. Looking at the US trend, I think it may only happen in 2009.

[Leepee]

Actually when the car price is 'high', people will not look at the small 'money'.

People will trade in their cars without due care. This allow the SE to earn more on taking in the 2nd car at a better profit.

 

When car price is 'high', means demand is there. SE can play "buy it or else someone will buy, less you buyer I also no heart pain". Therefore people will not ask for kuching-kurat freebies form SE, so in turn SE can take home full commissions takings.

 

When the car price is 'high', SE can earn more $$$ from dealing in more parf rebates paper, Open Cat COE sub-sales, Loans, insurances, etc.

[Seaweed]

the garment will clamp down such system....why not all the car dealer work together and have a internal bidding....for example this month 2000 COE....they will work together have only 2000 bid at $1...so sure can get 1 mah....

 

So now the organization have 2000 COE....then they do their internally bidding...whom ever bid highest get the COE....just like the COE system....then they have the COE bidding money kept and rebate to people just like how the garment do it when people scrap car...then the COE money they earn can support some charity or open a discounted petrol station or etc etc....then they money don't go to garment.... some naive ideas from me...

[Iziz]

Most SEs can no longer deal in Parf paper, in fact some cant even deal with used cars, wad has Open CAT sub-sales got to do with me? Perhaps u could enlighten me?

 

Pls get ur facts right b4 making comments like this. Alternatively, since u think being a salesman is such easy money, y dun u join us as one

Edited May 9, 2008 by Iziz

[Leepee]

Many PI SE do play with open cat COE.

 

Sorry if I have offended you personnally.