Monthly Sharing on Dereg Data & Projected COE Quota

[Mustank]

Bro Yo2020 is really expert

Respect!

I just come in see see learn learn

[youpapalite]

Anyone mind explaining to me some things?

COE quota up = Prices go down (most people thinks that way). But most car dealers have what 4 bid 6 bid COE. So, when they bid during this period, will they bid lower or do they bid at the previous months price (60k+)? So lets say if the price goes down to 40k. Wouldn't the dealer make a loss for those that agreed to the 60k COE price as the difference would have to be refunded? Am i right to say the dealers are the ones controlling how "high" the COE is regardless of quota?

Or how does it work? Sorry dam new to this.

[jaytan]

further comments:

* 64 more Cat B & E combined COE quota per bidding exercise means up 7.7%.

* both dereg for Cat A & B up a lot in Dec, especially Cat B. Cat A up 9.4% n Cat B up 18.6% when compared to Nov's.

Great Yo2020, Prefect on target. Salute!

[Handsomedi]

Anyone mind explaining to me some things?

 

COE quota up = Prices go down (most people thinks that way). But most car dealers have what 4 bid 6 bid COE. So, when they bid during this period, will they bid lower or do they bid at the previous months price (60k+)? So lets say if the price goes down to 40k. Wouldn't the dealer make a loss for those that agreed to the 60k COE price as the difference would have to be refunded? Am i right to say the dealers are the ones controlling how "high" the COE is regardless of quota?

 

Or how does it work? Sorry dam new to this.

Nope dont expect the dealer to bid below 55k, lets say the rebate level is at 55k. there is no benefit for the dealer to bid lower than 55k as any amount lower than this will need to return to the buyer.

 

With the current motorshow coming, dealer will take in more orders, i doubt you will see the coe drop too much at least for the next few months

[Piyopico]

Nope dont expect the dealer to bid below 55k, lets say the rebate level is at 55k. there is no benefit for the dealer to bid lower than 55k as any amount lower than this will need to return to the buyer.

 

With the current motorshow coming, dealer will take in more orders, i doubt you will see the coe drop too much at least for the next few months

No true. If prices dun drop why would the dealers take in more orders.

 

It's a game of poker.

[Hosaybo]

Price drop only when no or little customer in line for dealers. If got people that can pay, why would dealer drop price? So the cue is to see look show room and get a sense of no of people signing up to buy car.

[Ben5266]

Nope dont expect the dealer to bid below 55k, lets say the rebate level is at 55k. there is no benefit for the dealer to bid lower than 55k as any amount lower than this will need to return to the buyer.

 

With the current motorshow coming, dealer will take in more orders, i doubt you will see the coe drop too much at least for the next few months

... Should be... AD gets max profit when rebate is activated.

Everybody is happy except those got Coe in previous rounds.

[Chucky2007]

Anyone mind explaining to me some things?

 

COE quota up = Prices go down (most people thinks that way). But most car dealers have what 4 bid 6 bid COE. So, when they bid during this period, will they bid lower or do they bid at the previous months price (60k+)? So lets say if the price goes down to 40k. Wouldn't the dealer make a loss for those that agreed to the 60k COE price as the difference would have to be refunded? Am i right to say the dealers are the ones controlling how "high" the COE is regardless of quota?

 

Or how does it work? Sorry dam new to this.

for example, last weekend you go and current COE is 71k, you book a Cat B car priced at 150k selling price, with COE rebate set at 60k (meaning if coe falls to 50k, the dealer will refund you $10k, translating to a final purchase price of $140k), and from this sale, the dealer will make a gross profit of 30k. If the dealer bid for an coe of 61k, and really manage to get the car for you, the dealer will make additional 10k profit, making the total gross margin to be 40k... But you still pay the car at $150k.

 

So it's up to anybody's guess what the dealer will be bidding the coe at.

[Piyopico]

for example, last weekend you go and current COE is 71k, you book a Cat B car priced at 150k selling price, with COE rebate set at 60k (meaning if coe falls to 50k, the dealer will refund you $10k, translating to a final purchase price of $140k), and from this sale, the dealer will make a gross profit of 30k. If the dealer bid for an coe of 61k, and really manage to get the car for you, the dealer will make additional 10k profit, making the total gross margin to be 40k... But you still pay the car at $150k.

 

So it's up to anybody's guess what the dealer will be bidding the coe at.

Adding on. Whether the COE is 60k or 50k is a matter of how much more the dealer makes. With COE at 75k most dealers bmw and merc set their rebates at 55k to 59k. In other words even if COE drops 15k you still pay the same amount. However the next bidding price package will definitely be lower. I noticed that most luxury makes adjust their prices by less than 5k when the COE drop could be 12k or more. Many simply hold their prices and play around with overtrade values. Just dun expect a car to be 20k cheaper even if COE drops by a corresponding figure.

[Ben5266]

for example, last weekend you go and current COE is 71k, you book a Cat B car priced at 150k selling price, with COE rebate set at 60k (meaning if coe falls to 50k, the dealer will refund you $10k, translating to a final purchase price of $140k), and from this sale, the dealer will make a gross profit of 30k. If the dealer bid for an coe of 61k, and really manage to get the car for you, the dealer will make additional 10k profit, making the total gross margin to be 40k... But you still pay the car at $150k.

 

So it's up to anybody's guess what the dealer will be bidding the coe at.

Based on your example, the dealer gross margin is $29k.

When Coe is $61k, the dealer is paying 61k lah. Not $50k.

[Chucky2007]

Based on your example, the dealer gross margin is $29k.

When Coe is $61k, the dealer is paying 61k lah. Not $50k.

I already say assuming the gross profit is 30k.. and also assuming current selling price of $150k is based on a current coe of 71k.. and assuming Coe rebate set at 60k...

 

if next round of coe is still 71k, dealer pay 71k COE, you pay $150k for car, dealer makes 30k..

 

If next round of coe drops to 61k, dealer bids at any level above 61k or even $million for coe, the dealer will get the coe, and pay $61k.. you still pay $150k for the car, dealer makes $40k profit (initial $30k profit+$10k from the coe drop)

[Prozac51]

Shifu, can you project this weekend's 4D results as well?

 

LTA has jz made the announcement. wow... 2 days earlier than the last 2 rounds.

here's the summary:
a) Cat A up 41% as projected! there r 289 more Cat A quota per bidding exercise!!!
B) Cat B up 27%, Cat E down 34%. But NETT is 64 more Cat B & D combined COE quota per bidding exercise!!

 

[Duckduck]

long term COE sure higher n higher to LTA going towards zero growth policy but short term a combo of the boom bust cycle plus election coming shld bring prices lower. if they dont clawback anything at all, theyre destined to repeat the boom bust cycle, which makes it better for consumers short term, but longer term the volatility will b even worse than past few yrs IMO

[Ben5266]

I already say assuming the gross profit is 30k.. and also assuming current selling price of $150k is based on a current coe of 71k.. and assuming Coe rebate set at 60k...

 

if next round of coe is still 71k, dealer pay 71k COE, you pay $150k for car, dealer makes 30k..

 

If next round of coe drops to 61k, dealer bids at any level above 61k or even $million for coe, the dealer will get the coe, and pay $61k.. you still pay $150k for the car, dealer makes $40k profit (initial $30k profit+$10k from the coe drop)

Correct.

If Coe goes up to $80k, dealer margin down to $20k.

So, the incentive to the dealer is when Coe is at $60k where they earn $41k.

Anything lower, they will still earn $41k. Buyer pocket the saving.

So, no reason why the dealer will push the Coe as high as they light.

Right?

[Powxus]

Correct.

If Coe goes up to $80k, dealer margin down to $20k.

So, the incentive to the dealer is when Coe is at $60k where they earn $41k.

Anything lower, they will still earn $41k. Buyer pocket the saving.

So, no reason why the dealer will push the Coe as high as they light.

Right?

 

Dealer also want to close deal. No point keep bidding low and cannot get COE. So at the end they will bid high and pocket the profit and move on to other deals.

 

[Piyopico]

Correct.

If Coe goes up to $80k, dealer margin down to $20k.

So, the incentive to the dealer is when Coe is at $60k where they earn $41k.

Anything lower, they will still earn $41k. Buyer pocket the saving.

So, no reason why the dealer will push the Coe as high as they light.

Right?

Well many dealers are known to call up the buyer and ask for top up to secure a coe and get their ride ASAP. This works particularly well if the buyer fail to plan and is left without a car while the bidding drags on. I am a good example. I will be without a car for at least 6 weeks cos the stock is not in yet.

[Andyngps]

What if COE really crashed? I think the second hand car dealers may suffer as they took in most trade in cars at relatively a high price too. So having said this, no one really knows how COE will move!!!

[Ben5266]

Well many dealers are known to call up the buyer and ask for top up to secure a coe and get their ride ASAP. This works particularly well if the buyer fail to plan and is left without a car while the bidding drags on. I am a good example. I will be without a car for at least 6 weeks cos the stock is not in yet.

because they want to keep the margin and the market share.

99% success on the first time car buyer.