COE bidding - 2nd round of Feb 2017 delayed with change

[mcflhw]

I scrap a 2003 car with 30k coe in 2006 and brought a 2006 car with 10k coe.

I don't need to come out any cash at all for down payment and the installment in fact is still lower by a lot.

You are the winner, from the coe up and down.

[Pocy]

Example a $100K car (including COE at $50K) ....... if COE suddenly crashed to $10K, will banks start calling those taking 30% loan to top up the difference as collateral 'car' has a lower value now?

[Vratenza]

Lock in guaranteed COE at current price. Within the next few bids the COE cheong double. 

 

ideally is low price high coe.. but how to achieve that?

 

high coe equate to high car price 

 

[Spring]

Example a $100K car (including COE at $50K) ....... if COE suddenly crashed to $10K, will banks start calling those taking 30% loan to top up the difference as collateral 'car' has a lower value now?

Think there is an agreement amongst banks n partly prompted by the authorities (my own conjecture) that as long as u continue to service your loans, the banks will not ask for a top up though in theory they can. This is because if the banks start asking for top up, some borrowers will be unable to do so n may resort to selling their cars and this in turn may effect used car prices which could be catastrophic for the market n push prices further down which would not benefit the banks at all.

[LaBamba]

Think there is an agreement amongst banks n partly prompted by the authorities (my own conjecture) that as long as u continue to service your loans, the banks will not ask for a top up though in theory they can. This is because if the banks start asking for top up, some borrowers will be unable to do so n may resort to selling their cars and this in turn may effect used car prices which could be catastrophic for the market n push prices further down which would not benefit the banks at all.

In the first place, how can there be any reduction in loan quantum? If I borrow at 40% loan over 4 yrs, and the amount is $41K based on a $103K car, and if Coe drops to 30K, it wouldn't affect my loan quantum nor the price of my car, and I would still have to pay the same loan instalment for 4 yrs. Correct?

[Pocy]

Think there is an agreement amongst banks n partly prompted by the authorities (my own conjecture) that as long as u continue to service your loans, the banks will not ask for a top up though in theory they can. This is because if the banks start asking for top up, some borrowers will be unable to do so n may resort to selling their cars and this in turn may effect used car prices which could be catastrophic for the market n push prices further down which would not benefit the banks at all.

Look like a crash in COE will not be easy to handle for the banks and govt. Thus, if COE were to decline, the economy would rather it be gradually.

 

Probably ppl could try to see the COE trend for the next couple of rounds, beyond it will be uncertainties like intervention, PH factor, and etc ..... becomes speculative.

[Spring]

In the first place, how can there be any reduction in loan quantum? If I borrow at 40% loan over 4 yrs, and the amount is $41K based on a $103K car, and if Coe drops to 30K, it wouldn't affect my loan quantum nor the price of my car, and I would still have to pay the same loan instalment for 4 yrs. Correct?

Correct, Everything remains same.

 

Not sure if I understand what u mean by reduction in loan quantum? There is no loan reduction in loan quantum when COE Drops. From bank's point of view if COE drops , your outstanding loan maybe bigger than what your latest car market value is n hence, banks can ask u to top up in theory but my point was they unlikely to do so.

 

E.g. Car costs $100k with $50k COE, borrower takes 70% loan ie $70k. COE drops to $10k, similar new car now costs $60k n your used car probably lower than that but your outstanding loan is $70k less whatever instalments u have paid so your used car value is now lower than the outstanding loan so banks in theory can ask u to top up. Similar situation also happens in property loans.

Edited February 25, 2017 by Spring

[plim8888]

I scrap a 2003 car with 30k coe in 2006 and brought a 2006 car with 10k coe.

I don't need to come out any cash at all for down payment and the installment in fact is still lower by a lot.

 

Hi,

 

I am curious about how the $ math works.

 

How much you paid for your 2003 car with 30K COE? What is your monthly installment for this 2003 car? And for how many years?

 

Then how much for your 2006 car with 10K COE? What is your monthly installment for this 2006 car? And for how many years? And how much is the 2003 car trade-in value when you purchase your 2006 car? 

 

I think it can happen that you no need come out any cash at all for down payment and have lower installment. But I believe you will now have to pay 3 more years of installment, right? Then in the end may be still pay more?

 

Care to share the figures to help me understand?

 

Thanks.

[AXS]

Think can start to get ready for low 40s coe v soon. Those who having cars reaching 10 years soon are considered lucky.

I think it is difficult to see $40K COE so soon especially when everyone all behaves nervously. My belief has always been to remain calm and not react unnecessarily. Perhaps the last COE bidding exercise is a lesson for all. Edited February 25, 2017 by AXS

[mcflhw]

I think it is difficult to see $40K COE so soon especially when everyone all behaves nervously. My belief has always been to remain calm and not react unnecessarily. Perhaps the last COE bidding exercise is a lesson for all.

Agree,but got chance as 2nd Feb utilized too much buying power, now there will be an return. Wait and watch patient ly , learnt from the lesson.

[Nutty]

Wah Congrats leh Sgt!

 

Collecting ur new Kar in 2 weeks time?

Can collect as early as next Wed.

 

But I delay to next Sat, 4 days before my Fit expires :)

[Pocy]

Hi,

 

I am curious about how the $ math works.

 

How much you paid for your 2003 car with 30K COE? What is your monthly installment for this 2003 car? And for how many years?

 

Then how much for your 2006 car with 10K COE? What is your monthly installment for this 2006 car? And for how many years? And how much is the 2003 car trade-in value when you purchase your 2006 car?

 

I think it can happen that you no need come out any cash at all for down payment and have lower installment. But I believe you will now have to pay 3 more years of installment, right? Then in the end may be still pay more?

 

Care to share the figures to help me understand?

 

Thanks.

I scrapped 2003 car in 2006 and replaced with new likewise. If one had been thru that period would remember much fewer 2003 cars 2016 onwards. Cheap COEs, change to new car leh LOL.

[Sktan10]

Hi,

 

I am curious about how the $ math works.

 

How much you paid for your 2003 car with 30K COE? What is your monthly installment for this 2003 car? And for how many years?

 

Then how much for your 2006 car with 10K COE? What is your monthly installment for this 2006 car? And for how many years? And how much is the 2003 car trade-in value when you purchase your 2006 car?

 

I think it can happen that you no need come out any cash at all for down payment and have lower installment. But I believe you will now have to pay 3 more years of installment, right? Then in the end may be still pay more?

 

Care to share the figures to help me understand?

 

Thanks.

 

 

 

 

 

Just give a rough figures la cos can't really rem the exact detail.

-2003 the car cost 68k.

-Down 20k.

-Loan 48k,6yrs repayment.

-Trade in 39k in 2006.

-Since only repayment 3yrs,still own bank 3yrs loan.After full settlement,take back around 11k.

-2006 the car cost 46k.

-Down 10k.

-Loan 36k,5yrs repayment.Dealer still give 1k cheque to me.

Yes,the loan extend.

If l keep the 2003 car,my loan will end in 2009.

But i change to 2006 car,so my loan end in 2011.

[Shibadog]

Example a $100K car (including COE at $50K) ....... if COE suddenly crashed to $10K, will banks start calling those taking 30% loan to top up the difference as collateral 'car' has a lower value now?

 

low COE for new car doesn't affect paper value of used car, which is based on the relevant COE and PARF. Market value of the used car has a price floor, which is the paper value + body value (low for most BnB cars)

[Titanium]

Can collect as early as next Wed.

 

But I delay to next Sat, 4 days before my Fit expires :)

Sgt, must show me some pictures ya! Edited February 25, 2017 by Titanium

[Pocy]

low COE for new car doesn't affect paper value of used car, which is based on the relevant COE and PARF. Market value of the used car has a price floor, which is the paper value + body value (low for most BnB cars)

I think you meant the paper value at that time probably higher than 30% loan. I meant to say 70% loan .... my bad.

[LaBamba]

Correct, Everything remains same.

 

Not sure if I understand what u mean by reduction in loan quantum? There is no loan reduction in loan quantum when COE Drops. From bank's point of view if COE drops , your outstanding loan maybe bigger than what your latest car market value is n hence, banks can ask u to top up in theory but my point was they unlikely to do so.

 

E.g. Car costs $100k with $50k COE, borrower takes 70% loan ie $70k. COE drops to $10k, similar new car now costs $60k n your used car probably lower than that but your outstanding loan is $70k less whatever instalments u have paid so your used car value is now lower than the outstanding loan so banks in theory can ask u to top up. Similar situation also happens in property loans.

Thanks for your explanation. Unaware of such a technicality. Perhaps this might only happen in a global recession or wartime.

[flashbang]

Just give a rough figures la cos can't really rem the exact detail.

-2003 the car cost 68k.

-Down 20k.

-Loan 48k,6yrs repayment.

-Trade in 39k in 2006.

-Since only repayment 3yrs,still own bank 3yrs loan.After full settlement,take back around 11k.

-2006 the car cost 46k.

-Down 10k.

-Loan 36k,5yrs repayment.Dealer still give 1k cheque to me.

Yes,the loan extend.

If l keep the 2003 car,my loan will end in 2009.

But i change to 2006 car,so my loan end in 2011.

 

You were very lucky.

 

From original 6.8k/year depreciation, you managed to reduce it to average of 5.75k/year over 13 years.