Drop in OMV

[Porker]

OMV determines how much margin the AD will take! A 2k drop in OMV translates to $4700 more profit margin to AD!!!

I will demand compensation if it's written in black and white when booking was made!

 

Drop in $2k OMV does not equate to $4.7k profit for the dealer.

 

The profit is actually $2.72k (110% OMV for ARF, 5% GST and 20% customs duties)

[Vino]

I could be wrong but I really doubt so. Anyway, this is how I get the figure....

 

Assuming COE @ 12500

Booked car @ 80k with 24k OMV = 24k x 2.35 + 12500 + 11100 (profit margin).

 

Now with 2k drop in OMV hence...

80k = 22k x 2.35 + 12500 + 15800 (profit margin).

 

Margin has increased by $4700 from $11100 to $15800!

Edited January 2, 2007 by Vino

[Galantspeedz]

For cars before 5yrs into their COE, it's 75% of 110% ARF.

Hence the PARF difference is 1.6K for 2K OMV.

 

And 130% ARF are meant for cars before Apr 2004, not pre-2002 cars.

 

140ARF- before april 02

130ARF- apr 02 - apr 04

110ARF-the rest

[Porker]

The cost price of a car (minus the taxes, duties, GST and etc) is more often than not fixed. Dealers play around with the OMV (read: carefully and not overboard) to adjust their overall cost price.

 

Hence a drop in the OMV does not equate to the actual drop in the cost price of the car (minus the taxes, duties, GST and etc). They're just declaring a lower value so they don't have to pay so much tax! Oops

[Porker]

And the profit margin is not really accurate because they have staff overheads, facilities management (their big beautiful showrooms), management pay package and other miscellaneous stuff such as 1 yr road tax (packaged in the price), radio license and sometimes the odd insurance rebate.

[Silver_z]

If Forex rates were to skyrocket and your OMV hits 29k, the dealer still have to honor the price quoted. I guess its fair for both parties.

[Silver_z]

Is it right for the dealer to refuse to sell you the car at the agreed price if the OMV were to increase by 2k?

[Char]

Can declare lower OMV to pay lower tax meh ?

When high in OMV will resulting higher selling price for new car , so I can't understand why don't car dealer just declaring lower OMV to make their car more afforable ?

[Kokanadan]

Have you forgotten to add the 2K OMV difference itself?

[Kokanadan]

140ARF- before april 02

130ARF- apr 02 - apr 04

110ARF-the rest

 

So isn't it 130ARF for cars before Apr 2004, and not pre-2002?

[Kokanadan]

And the profit margin is not really accurate because they have staff overheads, facilities management (their big beautiful showrooms), management pay package and other miscellaneous stuff such as 1 yr road tax (packaged in the price), radio license and sometimes the odd insurance rebate.

 

The contention is not about the profit margin that they earn, cos rightfully they should earn sufficient to stay profitable and sustainable for their business.

My question is whether is it ethical to claim that the OMV is at price A when it's only price B?

 

I can understand OMV fluctuation, hence that's why a range of min. & max. OMV should be communicated instead of giving a ball-park figure.

For my case here, I was told +/- 21K. Get my drift?

 

Anyway, I'm not that eager to pursue any compensation now, as I've treating this as school fee for a precious lesson learnt. Just want to take this opportunity to advise future buyers to watch out for this glitch that may happen to them.

After all, a difference in OMV does make a difference in PARF value, be it significant or not.

Edited January 3, 2007 by Kokanadan

[Kokanadan]

The cost price of a car (minus the taxes, duties, GST and etc) is more often than not fixed. Dealers play around with the OMV (read: carefully and not overboard) to adjust their overall cost price.

 

Hence a drop in the OMV does not equate to the actual drop in the cost price of the car (minus the taxes, duties, GST and etc). They're just declaring a lower value so they don't have to pay so much tax! Oops

 

Great insight

Unfortunately, I'm not very sure whether that saving is passed onto the consumer?

Can you advise?

[Kokanadan]

If Forex rates were to skyrocket and your OMV hits 29k, the dealer still have to honor the price quoted. I guess its fair for both parties.

 

So I guess you buy the story that the difference in OMV is caused by currency fluctuation?

Honestly, I didn't quite buy the story as I've done a bit of study on 1yr forex rate movement for SIN-EUR.

 

Jan 06 - 0.503

Dec 06 - 0.492

 

Variance - 2.1%

 

52week high - ~0.520

52week low - ~0.480

 

Hope you understand where I'm coming from.

[Char]

They always quote higher OMV to make their car value for money ! In the real picture always come out lower omv when registeration . I believe most people can see from PI ads WISH OMV 21k , the actual omv less than 20k and can check from MTA website .

Edited January 3, 2007 by Char

[Kokanadan]

Well, that's why I'm asking whether is it ethical for AD/PI to sweeten the deal by mis-informing the consumers?

Based on what Brandon has mentioned, I'll take it as AD/PI would only save on the taxes, then is that saving pass onto the consumer then, bearing in mind that they achieved the saving on an expense of the car's PARF value.

[Mroonws]

Think maybe you can go speak with the SE's manager or management....But since you got no black and white, don't be mean... Ask whether they can give you compensation in some way...They might not refund you the difference but maybe refund you in terms of freebies....

[Kokanadan]

I'll try, but not having too much hope on it.

I'd expect more "lame" excuses than freebies.

[Silver_z]

I believe that forex does fluctuate the price of OMV. Need to check on the rates during the period they quoted you and the rates at the time they calculated OMV, to find out if they are really pulling a fast one. If they are indeed pulling a fast one, i think you should ask for compensation.