COE down, those bought at high COE how?

[Soya]

  On 5/22/2015 at 5:15 AM, RadX said:

 

 

and its the fastest leh...

 

no matter how fast you are, there is always another one ahead of you

 

 

got TRD version hor. dun pray pray. that big spoiler muz be worth at least 50 bhp.

[RadX]

  On 5/22/2015 at 5:18 AM, Soya said:

 

 

got TRD version hor. dun pray pray. that big spoiler muz be worth at least 50 bhp.

 

 

[Lowrider]

[Piyopico]

That is why demand will come in when COE drops to 50k for CAT A as many bought around 80-90k around two years back. Worth it for them to change.

 

And yes, they will have the money.

 

😝

[Ben5266]

  On 5/22/2015 at 4:16 AM, Wt_know said:

assuming you take that $64,500 and buy a brand new car at $80k

$125K + $15.5k (top up) / 13 years = sama sama as $125k / 10 years

just for simple calculation ... worth it?

 

 

 

Look at this...

 

New car is $60k.

Sell old car get $64.5k.

$4.5k cash can go Europe holiday.

Come back, drive brand new car.

 

Song!

[Piyopico]

  On 5/22/2015 at 5:58 AM, Ben5266 said:

Look at this...

 

New car is $60k.

Sell old car get $64.5k.

$4.5k cash can go Europe holiday.

Come back, drive brand new car.

 

Song!

Can. COE must drop to $1.

 

😁

[starofall]

Thanks guys ...understand a bit more now.

 

from what I see COE need to drop at least half of the price you pay for your COE then will have incentive to change but with a bit of top up la..also depend if the dealer give you more $$ for trade in / body price right?

 

Piyopico

Posted Today, 01:55 PM

That is why demand will come in when COE drops to 50k for CAT A as many bought around 80-90k around two years back. Worth it for them to change.

And yes, they will have the money.

 

not only that still got those waiting at the side line with coe expiring or new buyer

[Watwheels]

Aiya, ppl are just being optimistic.

 

Say stuff to console themselves.

 

Whoever came up with COE is the winner. The one paying to get COE is the loser. Period.

Edited May 22, 2015 by Watwheels

[Ben5266]

  On 5/22/2015 at 6:00 AM, Piyopico said:

Can. COE must drop to $1.

 

😁

No need $1.

Take Altis for example.

Total cost is about $36k. BM's margin about $10k. Total $46k.

So, COE $14k.

 

  On 5/22/2015 at 6:02 AM, starofall said:

Thanks guys ...understand a bit more now.

 

from what I see COE need to drop at least half of the price you pay for your COE then will have incentive to change but with a bit of top up la..also depend if the dealer give you more $$ for trade in / body price right?

 

Piyopico

Posted Today, 01:55 PM

That is why demand will come in when COE drops to 50k for CAT A as many bought around 80-90k around two years back. Worth it for them to change.

 

And yes, they will have the money.

 

not only that still got those waiting at the side line with coe expiring or new buyer

Yes, COE needs to go down more than half.

Also, the car has to be mass market car where the AD's margin is small, like $10k or less.

Those conti brand with margin of $30-40k, does not make sense to change as the money you pay evaporated once you collect your car.

[7hm]

If you ask me if COE drop substantially like that it's worth it because the depreciation of COE is flat 10% (e.g. a 75k COE always depreciate $7.5k a year but a 25k COE is only $2.5k per year) so the decrease in depreciation of a new car with a low COE can really offset.

[starofall]

  On 5/22/2015 at 6:44 AM, 7hm said:

If you ask me if COE drop substantially like that it's worth it because the depreciation of COE is flat 10% (e.g. a 75k COE always depreciate $7.5k a year but a 25k COE is only $2.5k per year) so the decrease in depreciation of a new car with a low COE can really offset.

 

but we lose the "car value".... only get back a bit.

I mean we have to factor this "lose" into the depreciation.

Edited May 22, 2015 by starofall

[Detach8]

I think the crash has to be significant for this to make sense, and small cars stand to benefit.

 

If you buy a car like a VW Jetta around $120K when COE was $70K, then drive it for 3 years and COE crashes, you'll take back maybe $60K.

 

You lost $60K driving for 3 years, or $20K/yr. If you had driven the Jetta all the way till scrap, the depre would have been just around $11.5K/yr.

 

If COE dropped to $30K the same car would still cost around $80K. The depre would be around $7.5K/yr.

 

Let's extrapolate this.

 

You lost $8.5K/yr ($20K - $11.5K) for first 3 years = $25.5K

You gained $4K/yr ($11.5K - $7.5K) for next 7 years = $28K

 

The nett gain is only $2.5K. Close to a zero-sum game, but you get a new car and warranty. Not too bad.

 

--

 

 

If you buy a car like a Merc E-class around $220K when COE was $90K, then drive it for 3 years and COE crashes, you'll take back maybe $100K.

 

You lost $120K driving for 3 years, or $40K/yr. If you had driven the Merc all the way till scrap, the depre would have been just around $20K/yr.

 

If COE dropped to $40K the same car would still cost around $170K. The depre would be around $15K/yr.

 

Let's extrapolate this.

 

You lost $20K/yr ($40K - $20K) for first 3 years = $60K

You gained $5K/yr ($20K - $15K) for next 7 years = $35K

 

The nett loss is $25K.

 

It doesn't make sense at all for the Merc owner.

Edited May 22, 2015 by Detach8

[7hm]

  On 5/22/2015 at 6:52 AM, starofall said:

 

but we lose the "car value".... only get back a bit.

I mean we have to factor this "lose" into the depreciation.

 

well... if gonna lose $60~75k over the next 7-8 years on a $90k COE car, but COE somehow amazingly drop to $45k, and new car is $70k...

Seems to me like a why-not situation.

[Kusje]

  On 5/22/2015 at 4:13 AM, Civic6228 said:

Lets look at one example ...

 

Current Selling Price : 125k

COE : 65k

OMV(PARF) 12k

 

 

After 3 year, paper value of car upon deregistration ...

 

COE = 65k X 0.7 = 45500

PARF = 0,75 x 12k = 9000

Car Body = 10000

 

Total 64,500

 

Depreciation = 120,000 - 64,500 = 55,500/3 = 18,500 per year.

 

Worth it ?

 

You can't count depreciation like that. Your money was lost when the COE price fell not when you sold the car.

 

You should ask yourself how long more you intend to drive that car. After 3 years, if you can exchange the car for a similar model (no extra cash required) with 10 year COE then why not? Don't need to harp on depreciation.

[Detach8]

Here's a chart for easier understanding using the Jetta example above.

 

X axis is years

Y axis is amount spent in terms of depreciation

 

Blue line is keeping a high COE car for 10 years till scrap.

Red line is selling a high COE car at 3rd year to replace with a low COE car.

 

 

The numbers does not make sense. The red line is constantly above the blue, i.e. higher spending.

 

The breakeven point is at the 9th year.

 

This is not considering any financing losses incurred during early loan settlement, and other opportunistic losses with the money spent towards the early years of car ownership.

[Hyundai8818]

  On 5/22/2015 at 7:10 AM, Kusje said:

 

You can't count depreciation like that. Your money was lost when the COE price fell not when you sold the car.

 

You should ask yourself how long more you intend to drive that car. After 3 years, if you can exchange the car for a similar model (no extra cash required) with 10 year COE then why not? Don't need to harp on depreciation.

I think during the COE crash time

The interest also went down, so new car and new loan cheaper

why not ?

Got a friend's friend, Nissan sunny change to Nissan Sunny

Get a new car with lower loan interest

[Detach8]

Here's an example using the Jetta above, but assuming that COE crashes all the way to $10K -- which we know is very unlikely -- but just for discussion sake.

 

 

Even so, the breakeven point is at the 7th year. Is it worth it? It's up to you to justify.

 

Towards the first 5 years, you would have spent around $15-20K more just by switching to a new car despite a lower COE. You do this only to save the same $15K towards the end.

Here's the chart for the Merc E class example I used above. It never makes sense because the car loses a lot of it's body value, hence the red line is always higher.

 

  On 5/22/2015 at 7:22 AM, Hyundai8818 said:

I think during the COE crash time

The interest also went down, so new car and new loan cheaper

why not ?

Got a friend's friend, Nissan sunny change to Nissan Sunny

Get a new car with lower loan interest

 

You got it wrong. When COE was low, interest rates were 2.88%. When COE was high, interest rates were 1.88%.

 

Even if your example is valid, early settlement of a loan has penalties too.

 

Unless COE reaches $10K, it doesn't make sense at all.

[Throttle2]

If you bought a car at high price means you bought at high price, whether it is worth it or not by rolling the life in the form of a new but cheaper car is subjective.

 

Subjective to what?

Subjective to how long you will drive the new car, how much difference in interest, how much difference in base value.

 

In life there is a price to pay for certainty and convenience. This may be the reason why there is no point in chasing or playing the COE game.