Not Another COE Thread!! Thud!!!

[Summer69]

Rises in COE premiums: Were speculative elements the cause?

by Wayne Chan 05:55 AM Dec 24, 2010

SINGAPORE - Were speculative elements behind the recent sharp rises in Certificate of Entitlement (COE) premiums?

 

That is what the Government parliamentary committee chairman for transport, Dr Lim Wee Kiak, wants to know.

 

Dr Lim told MediaCorp that he has filed a question on the issue to be addressed by the Transport Minister at the next Parliamentary sitting.

 

COE premiums have been rising, going over the $70,000 mark in the latest bidding exercise on Wednesday. And many - including car buyers, car dealers and others in the industry - want to know what caused the recent surge.

 

Dr Lim said: "With the sudden run in prices over the last two bidding sessions, I hope that the Land Transport Authority will be looking very closely into the bidding patterns as well as who are the ones that are bidding these COE prices up. Are they individuals or are they the car dealers themselves?"

 

He said if there are speculative elements like what was seen 10 years ago, then the Government may need to step in.

 

Industry players told MediaCorp that some dealers who were successful in bidding for COEs could be selling them at a higher price to other dealers who had buyers for their vehicles but were not able to secure COEs.

 

Apart from prospective car buyers, the rising COE premiums are also putting the strain on courier and delivery companies.

 

Some of these firms have turned to buying second-hand vehicles or renting them.

 

Mr Paul Ng, operations executive with WARP Logistics Trading and Services, told MediaCorp: "If we buy a new vehicle, it would cost much more than if we were to rent it for a particular month."

 

And if business declines the following month, the company will not have to face the recurrent cost of monthly instalments, which would have been the case if the company had bought a vehicle.

 

Delivery companies said they may have to increase their charges by 20 per cent next year to pay for rising operating expenses - arising from road tax, parking and ERP changes.

 

Parallel importers have also come up with new ways to increase sales, such as sharing the cost of COE premiums with buyers.

 

Some dealers are resorting to selling second-hand cars, as the prices of such vehicles are more stable.

 

To improve the COE system, Dr Lim suggested curbing vehicle financing to 70 per cent of the value of the vehicle, instead of the current 90 per cent.

Dr Lim also suggested that the authorities "let the buyers bid for what they want to pay".

Said Dr Lim: "(This) means that when you bid for it you pay the actual price for what you bid. Rather than the current system where you pay the lowest (bid), not the highest." ADDITIONAL REPORTING BY LYNDA HONG AND SEET SOK HWEE

 

[Yeshe]

did he come in the forum to read wat we wrote?

[Summer69]

warning shot fired! sorry, blanks only.

 

as usual, it will take months before they really take action, until they collect enough COE $$$, until a lot of AD casualties, until new carbuyer (CAT A), business owners and those car owners scrapping their cars make enough noise to irritates.....just like the HDB scenario.

 

for the meantime, $100K COE here we cum!!!

[Summer69]

did he come in the forum to read wat we wrote?

 

 

i think these ideas has been floating for donkey years, just that revenue will be drastically reduce= lesser bonus.

 

he never mention forcing car buyer bid COE themselves. now everything can be done on-line, should be very easy. secured COE first than buy car.

 

who in the right of mind will depart over 40K cold hard cash to bid senselessly?

 

only AD/ PI got the right of mind....yah, using customer's money...they ought to be headshot.

[Carbon82]

I don't think speculator are in the market yet. The recent spike in COE premium might seem very drastic to most buyers, but if you factored in the following considerations, well you are the best judge...

 

1) Many dealer / agent need to meet quota (maybe for retaining dealership) or fight for sales ranking (especially the case of PM & C&C)

2) With such high premium, budget buyer are kept out of the market, and premium brand will have more bidding power, since their profit margin are usually $30K or more, so bidding S$10K higher from the last round and the nett P&L is still pretty healthy

3) With the relatively low interest rate, there might be some buyer taking "personal" loan at lower interest rate. Example, a business man whom own a say S-Class. He might have fully paid for his ride 2 years back and in today environment, he can sell his ride for say S$200K, and instead of using the S$200K to pay for another new car, he chose to invest the amount in business or stock market, while taking a 90% loan @1.88% for another ride. Low interest loan package is the culprit, get it?

[Jaf78]

Rises in COE premiums: Were speculative elements the cause?

by Wayne Chan 05:55 AM Dec 24, 2010

SINGAPORE - Were speculative elements behind the recent sharp rises in Certificate of Entitlement (COE) premiums?

 

That is what the Government parliamentary committee chairman for transport, Dr Lim Wee Kiak, wants to know.

 

Dr Lim told MediaCorp that he has filed a question on the issue to be addressed by the Transport Minister at the next Parliamentary sitting.

 

COE premiums have been rising, going over the $70,000 mark in the latest bidding exercise on Wednesday. And many - including car buyers, car dealers and others in the industry - want to know what caused the recent surge.

 

Dr Lim said: "With the sudden run in prices over the last two bidding sessions, I hope that the Land Transport Authority will be looking very closely into the bidding patterns as well as who are the ones that are bidding these COE prices up. Are they individuals or are they the car dealers themselves?"

 

He said if there are speculative elements like what was seen 10 years ago, then the Government may need to step in.

 

Industry players told MediaCorp that some dealers who were successful in bidding for COEs could be selling them at a higher price to other dealers who had buyers for their vehicles but were not able to secure COEs.

 

Apart from prospective car buyers, the rising COE premiums are also putting the strain on courier and delivery companies.

 

Some of these firms have turned to buying second-hand vehicles or renting them.

 

Mr Paul Ng, operations executive with WARP Logistics Trading and Services, told MediaCorp: "If we buy a new vehicle, it would cost much more than if we were to rent it for a particular month."

 

And if business declines the following month, the company will not have to face the recurrent cost of monthly instalments, which would have been the case if the company had bought a vehicle.

 

Delivery companies said they may have to increase their charges by 20 per cent next year to pay for rising operating expenses - arising from road tax, parking and ERP changes.

 

Parallel importers have also come up with new ways to increase sales, such as sharing the cost of COE premiums with buyers.

 

Some dealers are resorting to selling second-hand cars, as the prices of such vehicles are more stable.

 

To improve the COE system, Dr Lim suggested curbing vehicle financing to 70 per cent of the value of the vehicle, instead of the current 90 per cent.

Dr Lim also suggested that the authorities "let the buyers bid for what they want to pay".

Said Dr Lim: "(This) means that when you bid for it you pay the actual price for what you bid. Rather than the current system where you pay the lowest (bid), not the highest." ADDITIONAL REPORTING BY LYNDA HONG AND SEET SOK HWEE

 

 

guys... shall we bid a dollar for it all the way kaozzz...

car population = licence holder population....more road kaozzz...