My Take on COE System and transferable issues

[Vblaster_w211]

The rich is already buying cars at whatever the price. They are the ones getting the Ferrari's, Lamborghini's etc. But many successful COE bids are now for VW, Toyota, and lower end BMW, Merc, Audi etc. These means the measures suggested will lower the price of COE, not increase.

 

These buyers think they have more disposable income by virtue of masking the costs of COE into 100% 10 yr loans. Taking out cash $30K is different from "hmm, ok, I pay an additonal $100 per month for 10 yrs...."

Edited August 14, 2012 by Vblaster_w211

[Kar_lover]

I personally will like that just that it is a waste of resources if cars get scrapped/exported too early.

Also I think the COE bidding will be more fierce since its use is more flexible.

 

Which means COE prices will go up even more but i believe what ppl are saying now it is already too high.

[Dojon]

reduce the length of COE and more cars will be scrape due in time and set near to zero growth rate for a few years then starts to find the balance again. Just like how the birth rate is controlled in the early days ;)

[Vblaster_w211]

The past COEs are based on contractual terms of 10 yrs. They cannot be retroactively shortened. Shortening new COEs will not release more COEs on the road as they will only expire after their life span.

[Timbuktu]

dear all,

 

was just thinking: since coe is used to control the car population, why can't it be transferrable, since in effect the number of coe remains the same?

 

that could be useful especially when the low coe bought in 2009 can be transferred to a new car now. that would not lead to a change in car number, since when the coe is transferred to the new car, the old car has to be scrapped.

 

any thoughts?

Liddat, if I got COE at low price earlier on, I can deregister current car, buy a new car and sell it immediately to a market which is at high prevailing COEs.

Rampant speculation and market chaos would result.

Which govt in the world would support such a stoopid idea?

 

[Kar_lover]

Liddat, if I got COE at low price earlier on, I can deregister current car, buy a new car and sell it immediately to a market which is at high prevailing COEs.

Rampant speculation and market chaos would result.

Which govt in the world would support such a stoopid idea?

 

Well, if the govt wanted to allow this system of transfering COE to new car, then they can easily add the stipulation that you can only transfer to another new car (or newly imported used car) registered under your own name. In other words the COE is non-transferable until he gives it up which is then "scrapped" and returned to the govt. That would solve the speculation issue.

 

 

[Elmo]

Which means COE prices will go up even more but i believe what ppl are saying now it is already too high.

 

Knowing Singaporean's threshold for financial pain, it will reach an apex and then we will get used to it.

10 years from now if COE A is an average of $100K, we will feel it is normal and a $80K COE is a "fluke"

 

Currently people who throw in big loans to buy are either "panic" buyers or in real need of cars.

Hopefully these panic buyers make up the bulk of ex-owners of 2003 - 2005 cars which will be picked up by perpetual 2nd-hand car buyers who will scrap them when their COE is due.

Impt is that these "panic" buyers who are under big loans can't afford to offload their cars come 2014/2015 and stay out of the new car market.

And if LTA don't tweak the expected increase in quota from these deregistered 2004/2005 cars, then we may see a drop in prices.

 

 

[Timbuktu]

Yes, agree with TS that current policies may need to be amended to make it very, very, very difficult to buy and own cars in SG.

 

- COEs paid up front, in full cash - even before any car is registered under one's name.

- MAS to amend bank loans restricted to cost of car only, less COE.

- MAS to amend max. bank loan quantum back to 70% (30% cash down payment, on top of COE paid in cash). Consider reducing the limit to 50% only, in view of COE prices softening further with these moves.

- MAS to amend max. bank loan tenure back to 7 years ... perhaps now, to only 5 years (since COE prices may soften with these moves).

- Illegalize AD over-trade in any form, subject to regular audit. Make it difficult for existing owners to jump ship. Overtrades simply force people to take even larger loans, to settle existing loans, just to jump ship.

 

So, yes - agree to all the above.

Must make it very, very, very painful to buy and own cars in SG.

 

 

[Kar_lover]

Knowing Singaporean's threshold for financial pain, it will reach an apex and then we will get used to it.

10 years from now if COE A is an average of $100K, we will feel it is normal and a $80K COE is a "fluke"

 

For all you know, its not even painful. Long time back COE had hit $100k before. Based on today's dollar that's like $200k!

[987]

Yes, agree with TS that current policies may need to be amended to make it very, very, very difficult to buy and own cars in SG.

 

- COEs paid up front, in full cash - even before any car is registered under one's name.

- MAS to amend bank loans restricted to cost of car only, less COE.

- MAS to amend max. bank loan quantum back to 70% (30% cash down payment, on top of COE paid in cash). Consider reducing the limit to 50% only, in view of COE prices softening further with these moves.

- MAS to amend max. bank loan tenure back to 7 years ... perhaps now, to only 5 years (since COE prices may soften with these moves).

- Illegalize AD over-trade in any form, subject to regular audit. Make it difficult for existing owners to jump ship. Overtrades simply force people to take even larger loans, to settle existing loans, just to jump ship.

 

So, yes - agree to all the above.

Must make it very, very, very painful to buy and own cars in SG.

 

then, why change the system? isn't it painful enough to own a car now? to me, high coe is very, very, very painful.

[Timbuktu]

then, why change the system? isn't it painful enough to own a car now? to me, high coe is very, very, very painful.

TS is proposing a change in the system.

I am just agreeing with him that to whichever system we go to, we'd need to make it hard and painful to own cars in SG.

 

Perish any thought of getting cheap cars in SG.

That will never happen from here on, as we move toward 6.5 million people and where land mass is not expandable any more.

It's simply material balance!

[987]

TS is proposing a change in the system.

I am just agreeing with him that to whichever system we go to, we'd need to make it hard and painful to own cars in SG.

 

Perish any thought of getting cheap cars in SG.

That will never happen from here on, as we move toward 6.5 million people and where land mass is not expandable any more.

It's simply material balance!

 

bro, think you are going round in circles...

[RadX]

ok pls stop creating too many COE threads.......this is getting out of hand.

 

onemore COE thread, i gonna delete straight off

[Kspchew]

Yes, agree with TS that current policies may need to be amended to make it very, very, very difficult to buy and own cars in SG.

 

- COEs paid up front, in full cash - even before any car is registered under one's name.

- MAS to amend bank loans restricted to cost of car only, less COE.

- MAS to amend max. bank loan quantum back to 70% (30% cash down payment, on top of COE paid in cash). Consider reducing the limit to 50% only, in view of COE prices softening further with these moves.

- MAS to amend max. bank loan tenure back to 7 years ... perhaps now, to only 5 years (since COE prices may soften with these moves).

- Illegalize AD over-trade in any form, subject to regular audit. Make it difficult for existing owners to jump ship. Overtrades simply force people to take even larger loans, to settle existing loans, just to jump ship.

 

So, yes - agree to all the above.

Must make it very, very, very painful to buy and own cars in SG.

 

Fully 100% sarpork, change it to 70%DP cash and 3yr loan, best if paid 100% cash.

Even shanghai is practicing 50% DP cash and 5yrs loan.

 

 

[Vblaster_w211]

The whole idea is to reduce the indebtedness of Singaporeans aspiring to owning a car, NOT to make it less painful.

 

By paying up front cash for COE, pay as you bid system (instead of pay for lowest successful bid system), bid on your own system, and 70% 7 yr max loan on car price ONLY, it will drive down the indebtedness. It will also make sure Singaporeans earn and save enough before buying their cars.

 

Living too much on credit was what brought the US economy down.

 

Having less indebtedness will also mean more assets when we retire eventually. All in line with Singapore's Government thinking.

 

By implementing these measures, the outcome will be:

 

a. Car population is still controlled (by virtue of COE quota system).

b. Lower indebtedness of Singapore car owners and encourages prudence in spending (save first, then buy). Less living on credits and future earning, thereby;

c. Having more set aside for retirement.

 

Only "downside" for Government is lower COE revenue. And that, as we all suspect, is why they fail to adjust the system as suggested. Instead of refuting these changes, they simply say their system is "sound".

 

Sigh...

Edited August 14, 2012 by Vblaster_w211

[Timbuktu]

The idea of reducing societal indebtedness is a noble one.

 

But who can really reduce indebtedness (on big-ticket items like property and cars, here in SG) when an open market is driven by demand and supply?

 

If the not-so-rich were to earn-first-before-purchase, then they would already have lost out to the richies on the word go ... who would have bought cars before they could. And by the time that they have saved enuf, more HNW FTs would have landed on our shores and will directly compete with them for COEs.

 

In the end, they may be chasing "the dragon's tail" as car (and property) prices keep rising beyond their reach ... each and every time they think that they have saved enuf!

Edited August 14, 2012 by Timbuktu

[Vblaster_w211]

Once the measures are introduced, there will be a drop in COE prices. It's about bidding systems and source of readily available cash (through long term loans) or not. Really quite simple to understand.

 

This benefits all except Government in terms of revenue.

 

[Old-driver]

We must look further than just trying to control vehicle population. The eco-system must be in sync as well. Imagine cars going off the roads. More people taking buses, MRTs, taxis. Can they support the increase in ridership? Possibly, but it takes time or the MRT will break down more often.

 

Just take 2 -3 years ago, when the influx of cheap COEs flooded the market. People complain not only about jams, but also not enough parking lots!

 

The COE system though seems out-dated, it is still the optimum way of controlling vehicle population. Those who can afford, happy. Those who are feeling out of reach, this is life.