Nov-2014 to Jan-2015 COE quota

[Dafansu]

this is a clear sign, Govt wants to control vehicles within 1 million regardless how many population, now vehicle 92k already, so vehicle population 0% even negative growth is possible

 

every little measure is critical. This is clearly highlighted in the land transport master plan that they will be aggressively be promoting public transport and reduce the demand for private car.

[car138]

So do you all think ADs will lower their car price these few days? If yes, how much $ reduction?

[Forte3737]

That's what the sales people would use to persude customers to buy now or never

Hi, newbie here… some comments to share but donna if this is what it will turn out..

 

1) The reduction of vehicle growth from Feb is to offset slightly the expected high number of de-registrations and also the expiry of current deductions due to over-projections in 2008/09 which is around 200+ for Cat A alone per month! So the 0.25% reduction is not significant

 

2) Revision of CEV in Jun 2015 is also possible due to expected decrease in COE prices by then and since so the govt will review this tax reduction so to say?

 

*But somehow some people might see the vehicle growth reduction (without analyzing the true figures) and rush into panic buying!!??

 

[Quantum]

So do you all think ADs will lower their car price these few days? If yes, how much $ reduction?

CAT A cars might cut 2 to 3K, don't think CAT B especially those luxury brands will lower price, few ks is not significant for this category buyers

[Forte3737]

Not sure but different AD have their own strategy.expect at least a 3k reduction for some b&b models

So do you all think ADs will lower their car price these few days? If yes, how much $ reduction?

 

[Joshelerry]

personally I do not see a spike again and I don't think govt wants it that way bcos it harms their relationship with the people which consequences we see last elections ...

 

so quite obvious that they are trying to streamline the COE supply evenly …. and so these few years will see adjustments like such to offset …

 

But well … ultimately its down to the buyers… if people wants to buy cars at ridiculously high price, they asked for it! … even quota is low, why sign on the dotted line at such high price and high loan?

[Columbian78]

This morning announcement means there will not be any clawbacks for the expiring COEs, at least in 2015. If they clawback, then they will not achieve the targeted 0.25% growth. 100 COEs expire means 100 COEs placed back into the market, plus additional 0.25 COE.

[Joshelerry]

This morning announcement means there will not be any clawbacks for the expiring COEs, at least in 2015. If they clawback, then they will not achieve the targeted 0.25% growth. 100 COEs expire means 100 COEs placed back into the market, plus additional 0.25 COE.

 

Yap, this is to prevent over demand vs supply (even though now this is already the situation)

So reducing the vehicle growth is to offset (in this case little) vs the hugh COE expiring! taking note that the 2008/09 over projections reduction will be removed. If you check out the data thats around 323 for three month period… not significant but still every COE is now being coveted after ...

 

Of course another important thing is as COE gradually increase due to deregistrations, dealers are able to lower their premiums as they expect to sell more to cover their overheads… these few years, buyers are paying for 2-3 cars premiums built into the buy price!!

 

When COE quota increase, we might see a lower pricing by dealers as they will strive to attract buyers! … after all beside the makes and models, the very important issue is still the COST …

[ST69]

So do you all think ADs will lower their car price these few days? If yes, how much $ reduction?

 

If AD lower price, more people buy, that will mean the COE price will be supported again.

 

If AD doesnt lower price, then, there's a good chance COE price will drop. & if it drops, it means AD make more $$$ since its to fulfill orders already on hand.

 

 

Edited October 16, 2014 by ST69

[yo2020]

100 COEs expire means 100 COEs placed back into the market, plus additional 0.25 COE.

no, not correct. the 0.25% growth is basing on the car population (of respective Cat), not the number of dereg.

[Lincoln]

 

If AD lower price, more people buy, that will mean the COE price will be supported again.

 

If AD doesnt lower price, then, there's a good chance COE price will drop. & if it drops, it means AD make more $$$ since its to fulfill orders already on hand.

 

 

 

You need to know the order of the events to predict the outcome and for every quarter, the first event is the quota announcement.

 

1. Impact on AD's margin

COE Quota Increase ==> Can sell more cars ==> AD can afford to lower margin as fixed costs is shared among more sales ==> Car Price is generally lower ==> More people will buy

 

2. Impact on COE's price

COE Quota Increase ==> More supply ==> COE price is lower (simple demand & supply theory) ==> Existing car owners' with high COE tempted to change cars ==> More people scrapped their cars ==> COE Quota increase

 

Both #1 and #2 means that car price is generally cheaper because it is a combination of smaller AD's margin and lower COE price.

 

AD doesn't lower price is unlikely becos he will not be competitive priced to attract the higher number of people to buy the cars. It is unlikely for a COE price to be higher if quota is higher than previous rounds. COE is going to slide lower but how low is a guess. The longer you wait the better it is. As long as quota is increasing, you just wait. When that quota increase is no longer significant or is about to shrink, it will be the best time to buy.

Edited October 16, 2014 by Lincoln

[Powxus]

 

You need to know the order of the events to predict the outcome and for every quarter, the first event is the quota announcement.

 

1. Impact on AD's margin

COE Quota Increase ==> Can sell more cars ==> AD can afford to lower margin as fixed costs is shared among more sales ==> Car Price is generally lower ==> More people will buy

 

2. Impact on COE's price

COE Quota Increase ==> More supply ==> COE price is lower (simple demand & supply theory) ==> Existing car owners' with high COE tempted to change cars ==> More people scrapped their cars ==> COE Quota increase

 

Both #1 and #2 means that car price is generally cheaper because it is a combination of smaller AD's margin and lower COE price.

 

AD doesn't lower price is unlikely becos he will not be competitive priced to attract the higher number of people to buy the cars. It is unlikely for a COE price to be higher if quota is higher than previous rounds. COE is going to slide lower but how low is a guess. The longer you wait the better it is.

 

Existing owner buying a new car and scrap his old car does not increase the overall number of COE. He will still hold one COE just that he "transferred" it to a new car. To increase COE, you will need either LTA to increase the supply or existing owners to give up driving.

[Lincoln]

 

Existing owner buying a new car and scrap his old car does not increase the overall number of COE. He will still hold one COE just that he "transferred" it to a new car. To increase COE, you will need either LTA to increase the supply or existing owners to give up driving.

 

We do not have to worry too much about COE long term supply. That's for sure is a 0.25% increase yoy as announced and the long term effects on overall COE price is it is going to be higher and higher in the future as this is not in line with population increase.

 

As a buyer making a new car purchase within the next few years, the key number to watch is COE quota. As long as this is increasing and is expected to increase, we know that car price is going to be cheaper due to the 2 effects discussed in my earlier post.

[Powxus]

 

We do not have to worry too much about COE long term supply. That's for sure is a 0.25% increase yoy as announced and the long term effects on overall COE price is it is going to be higher and higher in the future as this is not in line with population increase.

 

As a buyer making a new car purchase within the next few years, the key number to watch is COE quota. As long as this is increasing and is expected to increase, we know that car price is going to be cheaper due to the 2 effects discussed in my earlier post.

 

Your pt 2 is more complicated. With the increase in population which is not in line with car growth, demand could far outpace the 0.25% car growth. It is also not clear how many existing buyers who brought during the 2005-2008 COE peak is willing to give up driving.

[ST69]

 

You need to know the order of the events to predict the outcome and for every quarter, the first event is the quota announcement.

 

1. Impact on AD's margin

COE Quota Increase ==> Can sell more cars ==> AD can afford to lower margin as fixed costs is shared among more sales ==> Car Price is generally lower ==> More people will buy

 

2. Impact on COE's price

COE Quota Increase ==> More supply ==> COE price is lower (simple demand & supply theory) ==> Existing car owners' with high COE tempted to change cars ==> More people scrapped their cars ==> COE Quota increase

 

Both #1 and #2 means that car price is generally cheaper because it is a combination of smaller AD's margin and lower COE price.

 

AD doesn't lower price is unlikely becos he will not be competitive priced to attract the higher number of people to buy the cars. It is unlikely for a COE price to be higher if quota is higher than previous rounds. COE is going to slide lower but how low is a guess. The longer you wait the better it is. As long as quota is increasing, you just wait. When that quota increase is no longer significant or is about to shrink, it will be the best time to buy.

 

For your own sake, I hope you are right as you would be the minority that has figured this out.

 

For me, I just buy if I need it as there are just too many variables, the AD profit making schemes, the orders they have on hand, their obligations to quotas, their existing unfilled orders, how aggressive they bid, plus the buyers irrational behaviour & hidden unknowns...

Edited October 16, 2014 by ST69

[Quantum]

 

Your pt 2 is more complicated. With the increase in population which is not in line with car growth, demand could far outpace the 0.25% car growth. It is also not clear how many existing buyers who brought during the 2005-2008 COE peak is willing to give up driving.

80% population increase is FT, and most of FT don't want to buy car in SIngapore,

I heard a few colleagues and friends are hunting rent car, their car COE going to expiry in couple of months,

than driving rent car until COE drop to reasonable range

[Ahseng]

Why will lower car price ley?

 

Who don't want more commission? Demand is there what, quota still limited, if i am agent i won't lower lor.

[Powxus]

80% population increase is FT, and most of FT don't want to buy car in SIngapore,

I heard a few colleagues and friends are hunting rent car, their car COE going to expiry in couple of months,

than driving rent car until COE drop to reasonable range

 

If demand for rental goes up, rental company will increase the pool of rental cars which still needs COE.

It's a zero sum game whether it's rental or buy because at the end of the day the number of cars are capped by the number of COE.