ST Forum: COE Prices Are Unlikely To fall: Experts

[Vulcann]

Bros, maybe time to think of second- or third-hand rides...

 

From ST Forum:

 

http://www.straitstimes.com/STForum/Story/...ory_806066.html

 

COE prices are unlikely to fall: Experts

Published on Jun 2, 2012

 

WE NOTE that consumers in general are expecting a decline in premiums of certificates of entitlement (COEs) following the Land Transport Authority's announcement that it will pull back on its drive to crimp the growth of the vehicle population here ('Government answers call to ease COE crunch'; Thursday).

 

In our analysis based on current deregistration numbers, despite the recent measures, the Category A quota - for cars of 1,600cc and below, and taxis - is expected to fall by some 40 per cent from current levels. It is unlikely the COE premium will decline for this category.

 

Tan Wah Sern

 

Executive Secretary

 

Motor Traders Association

 

--------------------------------------------------------------------------------

 

WHILE the revised COE quantum formula averts a worse situation, it does not address the system's boom and bust cycles.

 

In view of the uncertain number of deregistrations until the end of this month, an objective way to assess the revised formula is to apply it to the present February-to-July allocation window.

 

With annual growth allowance raised to 1 per cent in lieu of 0.5 per cent from August this year, and the temporary suspension of negative adjustments due to past oversupplies, the average number of COEs across all categories for each bi-weekly auction would be about 1,786 compared to the current 1,846. Some 627, 331 and 151 COEs would be available in Categories A (for cars with engine size 1,600cc and below and taxis), B (for cars with engine size above 1,600cc) and E (unrestricted) respectively.

 

These numbers account for the lower provision of COEs in Category E from August.

 

The average number of COEs in the forthcoming allocation window between August and next January will most likely be below 1,786 per bi-weekly auction due to fewer deregistrations this year compared to the second half of last year. Thus, the COE premiums can be expected to stay at their high levels.

 

Singfat Chu

 

Associate Professor of Analytics

 

NUS Business School

 

[Achee]

These lastest measures by LTA are not long term solutions, it merely defers a problem. The COE system requires a complete overhaul

[Theobserver]

It is really interesting that when coe is at its lowest the issue of an overhaul was never brought up. I think the one that needs overhauling is the bidding system itself, which is like a free for all system. Also those dealers should be reined in. every bidding seems to be a battle royal where in these dealers pit against one another. Therefore I believe current level has a lot of sentiments in it. I still believe the buyer should personally bid for the coe. They should also outlaw the practice of asking buyers to top up for the cow. My 2c worth

[Wt_know]

ban DEALER from bidding coe ... that's the LEAST LTA can do

 

there is a huge conflict of interest for dealer to bid coe

 

1. dealer outbid another dealer to secure coe in order to sell more car

2. dealer has no mercy to customer ... dealer bid $90K coe with no feeling as the cost is passed on to buyer. they will give you c--k-and-bull story that's the market ... high coe is artificially pump up by dealer and suffered by buyer

3. conflict of interest where dealer want to sell high buyer want to buy low. the higher the selling price the bigger the loan equal to more profit for dealer

4. coe up price adjusted upward fast and furious ... coe down price adjusted tam pok like no adjust

5. dealer is CROOK !

 

coe should be bidded by customer .... then some customer who don't know how to do online bidding or find it leceh to do so can sign the authorisation letter to dealer to bid on their behalf (current method). this should be minority as i believe 9/10 buyer want to bid coe by themself.

Edited June 2, 2012 by Wt_know

[Tigerwoods]

  On 6/1/2012 at 11:38 PM, Theobserver said:

It is really interesting that when coe is at its lowest the issue of an overhaul was never brought up. I think the one that needs overhauling is the bidding system itself, which is like a free for all system. Also those dealers should be reined in. every bidding seems to be a battle royal where in these dealers pit against one another. Therefore I believe current level has a lot of sentiments in it. I still believe the buyer should personally bid for the coe. They should also outlaw the practice of asking buyers to top up for the cow. My 2c worth

Agree.

The current COE prices are expected because there are many potential buyers that left the scene because they cannot afford and only the rich are at the poker table.

Now with more COEs those that left will come back and as more bets to maintain the current prices.

[Meanmachine]

it 's about TIME we loook at our OCE system of car, are'nt there any better ways of getting new car out WITHOUT COE, the main bulk of money goes to LTA's coffer,

 

We are known as a bunch of idiots who follow rules, yet the gahmen made us like an idiot, really !

 

Dealer can oso bid, so which sides is he standing on, the answer is obvious . . . Im' very sure COE will go up to $100K by the end of 2012 and beyond,

 

THe rich and the shameless will juz get the car they wanted, look around you, Lambo, Bentley, Aston & Maserati, all are exotic & expensive cars and much younger driver/s

[Theobserver]

I personally heard from people close to this industry that the main profit for the conti cars comes from the after sales rather than the direct sale ie servicing repairs etc. the more they sell the better the profit. So they dont mind losing some at the point of sale. Those japs suffer because many workshops can service jap cars

[Yuan]

  On 6/2/2012 at 12:40 AM, Wt_know said:

ban DEALER from bidding coe ... that's the LEAST LTA can do

 

there is a huge conflict of interest for dealer to bid coe

 

1. dealer outbid another dealer to secure coe in order to sell more car

2. dealer has no mercy to customer ... dealer bid $90K coe with no feeling as the cost is passed on to buyer. they will give you c--k-and-bull story that's the market ... high coe is artificially pump up by dealer and suffered by buyer

3. conflict of interest where dealer want to sell high buyer want to buy low. the higher the selling price the bigger the loan equal to more profit for dealer

4. coe up price adjusted upward fast and furious ... coe down price adjusted tam pok like no adjust

5. dealer is CROOK !

 

coe should be bidded by customer .... then some customer who don't know how to do online bidding or find it leceh to do so can sign the authorisation letter to dealer to bid on their behalf (current method). this should be minority as i believe 9/10 buyer want to bid coe by themself.

 

I am with you on this.

[Hosaybo]

Don't think it was the intention of the gov to make coe cheap. They have let it through once and they know they cannot let it happen again.

[Gendut]

Stupid lui now bereft of ideas to develop a new system for private transport.

 

My sentence above alr hints at something.

 

If he wants ideas, he knows where to find me. But of course must share the million dollar salary.......

[Fuelsaver]

Those statements were made to sustain car dealer livelihood.

 

Garment won't do anything rash to help commoners at expense of incurring wrath fr rich as it hurt country / their pocket.

 

Let the rich play their own games.

 

See, hear n know no evil...

Edited June 2, 2012 by Fuelsaver

[Jim]

  On 6/2/2012 at 12:40 AM, Wt_know said:

3. conflict of interest where dealer want to sell high buyer want to buy low. the higher the selling price the bigger the loan equal to more profit for dealer

 

I bought my car from a PI and I bid for my own COE, so I could be completely wrong about this, but once you sign on the dotted line for the most common packages, ie 6 bids non guaranteed, isnt it in the interest of the car dealer to secure the COE at a price as low as possible?

 

Even if the dealer needs to give you a rebate, they are still making more money with low COE price than, say the COE price hitting exactly the highest COE limit agreed, or worse still, exceeding the limit, and they have to delay closing the deal, or if this is the 6th bid, lose the deal altogether.

 

In fact, it is the car buyer who wants the COE secured at as high a price as possible, under the agreed limit.

Edited June 2, 2012 by Jim

[Dark]

  On 6/2/2012 at 3:18 AM, Jim said:

I bought my car from a PI and I bid for my own COE, so I could be completely wrong about this, but once you sign on the dotted line for the most common packages, ie 6 bids non guaranteed, isnt it in the interest of the car dealer to secure the COE at a price as low as possible?

 

Even if the dealer needs to give you a rebate, they are still making more money with low COE price than, say the COE price hitting exactly the highest COE limit agreed, or worse still, exceeding the limit, and they have to delay closing the deal, or if this is the 6th bid, lose the deal altogether.

 

In fact, it is the car buyer who wants the COE secured at as high a price as possible, under the agreed limit.

 

You could be logically right on the surface but you need to look beyond this.

 

When dealer sells you car with COE, there is already a built-in reference price set for the COE based on previous month COE plus the recent trend and demand (based on no of bookings, etc). It is in their interest to set this price as high as possible with sufficient buffer to absorb any increase in COE price in order to secure a COE (and hence a deal).

 

If demand for that month increase and COE shoot up, do you think they will still help you secure a COE (assuming non-guaranteed) when other buyers in the subsequent months will book at a higher price than you? In my opinion, the 6 bids is to give them more chance to secure the deal should the COE price ease up later.

 

This versus ALL buyers booking a car at cost-plus and bidding for their own COEs where no reference price has been set beforehand. If combined with a pay-as-u-bid system, wouldn't these buyers bidding with their own money be more careful and conservative with their bids?

 

[Timbuktu]

  On 6/2/2012 at 2:06 AM, Meanmachine said:

THe rich and the shameless will juz get the car they wanted, look around you, Lambo, Bentley, Aston & Maserati, all are exotic & expensive cars and much younger driver/s

I do own one of the marques that you have mentioned.

Superbly-crafted cars, I must say - all of 'em.

I still pay my taxes - not limited to the vehicular type only, and I do contribute back to society in more ways than one.

 

So how?

Banish our "type"?

Do I detect a sense of envy here?

 

Better still, lead a revolution and like the French, send the Marquis and all royalists to the guillotine!

Viva la France!!!

 

[Darthrevan]

  On 6/2/2012 at 12:40 AM, Wt_know said:

ban DEALER from bidding coe ... that's the LEAST LTA can do

 

coe should be bidded by customer .... then some customer who don't know how to do online bidding or find it leceh to do so can sign the authorisation letter to dealer to bid on their behalf (current method). this should be minority as i believe 9/10 buyer want to bid coe by themself.

i agreed with customers bidding for themselves but i believed that its the majority who do not know how to bid

 

 

 

[Eyke]

  On 6/2/2012 at 4:21 AM, Darthrevan said:

i agreed with customers bidding for themselves but i believed that its the majority who do not know how to bid

 

if forced to, learn they will.

 

even ah gong & ah mah can tee tee atm,

so coe bidding is not difficult

[SimonTan]

Very simple. Some people willing to pay for the ease of AD to settle and bid on their behalf.

 

All Coe bidded thru dealers computer system will cost 10% more on the bidded price.

 

Those who use ATM or inter bank account to self bid will get it at the bidded price.

 

Fair?

[Zxcvb]

Actually, what's there to complain about ah?? Isn't the COE a simple of "whoever can afford wins the bid"?? What's there to fix??

 

Release more COE so more cars on the road??

 

Make COE cheap so everybody buys a car??

 

Give commoner an affordable car to buy, so everybody owns a car??