My Take on COE System and transferable issues

[Arcfire]

Sorry for the long post.... Transferrable COEs may have its benefits but I think the logistics behind that may well be too complicated to be beneficial. Not to mention the higher scrapping/exporting rate of vehicles which lead to more wastage and higher pollution to the environment due to production demands.

 

Perhaps we should look at alternatives to lower the demand for new cars.

How would that be possible? Take a look at all the used cars sitting at the car marts on any given day. There are so many just waiting for people to buy. Yet, the COE goes up and up and up. Why would that be?

 

Is it that its used? Or because the used car is not worth its current price? Or is it because everyone just wants a new car, no matter the cost?

 

I feel that if the prices for used cars can be adjusted, to the extent that it would be more preferred to buy a used car rather than a new car. The demand for new cars will be lowered, leading to a more reasonable market for COEs. At the same time, there should be other measures to ensure that COEs are not completely under market forces and dealers collaborating to control prices.

 

1) Unpeg used car prices from current new car prices. By pricing cars to their actual value (COE and OMV) with some markup by dealers for their profit would result in a more vibrant used car market. Eventually, cars that are simply not sellable due to their high COE will be scrapped or exported in the end, leading to a more predictable pricing and promotes better service and accountability on the dealers end to generate sales.

 

This also will help in financial aspects of buyers who would not over-pay for a used car as they would now, paying in the range of 30k and up over the actual value of the car, as COE prices are sky high now.

 

 

2) At the same time, modify the loan cap to a more acceptable level, say 15-20% for used cars and 30-40% for new cars. In this way, there is more incentive for buyers to go for used cars which are there in the market anyway, already with a COE.

 

 

3) This in turn lowers the demand for new COEs, lowering the premium and those that are really keen on a new car will have to be ready to pay a higher downpayment for it, but will be lower compared to the current situation. Restrictions will have to be put in place to control the bidding, perhaps putting in a closed bidding which is only made public after bidding ends. This is something that I have yet to think in depth about. Perhaps a balloting system or a certain quota for dealers and a separate 1 for individual bidders etc. Feel free to comment and suggest.

 

 

4) Because of the lowered prices, buyers may be more willing to change cars more often, also resulting in a better used car market with more business for dealers. New car dealers will still have a stream of buyers but only those who are dead-set on a new car even with the affordability of a used one.

 

With the above, the car prices will reach an equilibrium level where the COE will be reasonable. Its a 2 way effect, the used car prices controlling the COE price and vice versa because no one will want to bid high for COE because they will not be able to sell their cars without making a bigger loss. No one will pay a high price for a used car just because the COE is of higher value because they have alternative cars to look at.

 

 

I know that there are flaws in this so feel free to discuss. I just want this to be a productive discussion so please don't post any unnecessary comments. Thanks!

[Maseratigood]

  On 3/8/2013 at 3:12 AM, Romandeesh said:

I agree...Just transfer of COE for life time if you have one is really Injustice for the people who never own a COE or car in Singapore...Dont be so Selfish...

 

They should allow COE transfer from old car to new car and should keep the COE term of 10 years only.... That means if you have money change as many cars as you can by scrapping your old cars...but the max period for your COE is 10 Years....lets give the chance to others. At any point of time...say in the 9th year you bought a new car and decided to keep the car for next 10 years...use your existing COE for 1 year and pay the new COE for 9 years on prorata basis of the maximum bid of that catogory....

This basically means the owner of a fresh COE can keep it for the next ten years for his car, or cars (but only one at at a time) during the same period. Which also means he is protected against the swing of COE prices with that 10 year period. At the same time, if COE prices drop within the period, he won't be able to enjoy the cheaper COE if he changes his car.

 

So far so good because price stability is a good thing, at least for him during that ten years.

[Mllcg]

  On 3/8/2013 at 3:12 AM, Romandeesh said:

I agree...Just transfer of COE for life time if you have one is really Injustice for the people who never own a COE or car in Singapore...Dont be so Selfish...

 

They should allow COE transfer from old car to new car and should keep the COE term of 10 years only.... That means if you have money change as many cars as you can by scrapping your old cars...but the max period for your COE is 10 Years....lets give the chance to others. At any point of time...say in the 9th year you bought a new car and decided to keep the car for next 10 years...use your existing COE for 1 year and pay the new COE for 9 years on prorata basis of the maximum bid of that catogory....

 

COE for life is good

 

those who can afford buy new cars.

 

those who cant, get 2nd hand

 

at least we wont have to scrap cars after 10 years