CM1 for COE?

[Vextan]

Good news. I got friend's nephew who bought a 140k car and took 140k loan yet earn $3k a month... These 100% loan thingy are making the GenY poorer in the long run bec they are thinking only of current material comfort.. the parents are the screwed ones bec still have to help their children maintain their life style

Amazing $3k salary can take $140k loan. Hard to believe. Are banks so liberal in giving out loans ?

Edited February 3, 2013 by Vextan

[macrosszero]

Amazing $3k salary can take $140k loan. Hard to believe. Are banks so liberal in giving out loans ?

 

They're only too happy to give out rope for people to hang themselves as long as the government allows it and there's some semblance of "assessment". What better than overpriced "assets" that most segments of the population can ill-afford? Long after the COE prices have crashed, stock markets have slumped, resale value of the car plummeted, the loan still remains.

 

 

[Beehive3783]

Good news. I got friend's nephew who bought a 140k car and took 140k loan yet earn $3k a month... These 100% loan thingy are making the GenY poorer in the long run bec they are thinking only of current material comfort.. the parents are the screwed ones bec still have to help their children maintain their life style

140k loan with 3k salary? Crazy.

 

I can bet this nephew will be selling the car 1 year down the road or even earlier. Or the car will end up getting repossessed by bank.

[Quirky]

Some people over commit to buy a car they cannot afford, because they want that face.

Face to impress a date, to impress relatives and friends, to hint to fellow neighbours that he/she has made it!

 

So rather than drafting up new policies to control loan quantum, we could use a simple solution:

 

Use different colour license plates to indicate loan duration!! (or to indicate % of monthly pay, or a combination of both.)

 

Black license plate for owners who didn't take loan.

Green for people who took 1-3 years loan. And so on. And a loud colour for people who took more than 7 years loan.

 

This way, there wouldn't be any fake face value for people who over commit to buy an expensive car.

 

[Gendut]

Some people over commit to buy a car they cannot afford, because they want that face.

Face to impress a date, to impress relatives and friends, to hint to fellow neighbours that he/she has made it!

 

So rather than drafting up new policies to control loan quantum, we could use a simple solution:

 

Use different colour license plates to indicate loan duration!! (or to indicate % of monthly pay, or a combination of both.)

 

Black license plate for owners who didn't take loan.

Green for people who took 1-3 years loan. And so on. And a loud colour for people who took more than 7 years loan.

 

This way, there wouldn't be any fake face value for people who over commit to buy an expensive car.

 

Just like your nick, quirky wnd neat.

 

I simply love your idea. It would work wonderfully in a place like Singapore where kiasuism and face is so important.

[Chucky2007]

3k can take 140k loan? Need guarantor?

Ya.. the mother is guarantor. . Crazy right? My friend stressed out when the nephew asked him to be guarantor initially.. haha

[Chucky2007]

Amazing $3k salary can take $140k loan. Hard to believe. Are banks so liberal in giving out loans ?

That's why the 100% loan is crazy.. I woulnt have paid 140k and down 3k for a car at all.. now youngsters so easy to buy 140k to 200k car when they are earning less than 5k a month.. they are only enriching your mental state. But not their bank accounts.. only LTA, banks and car dealers are enriched.

[FocusWagon]

Some people over commit to buy a car they cannot afford, because they want that face.

Face to impress a date, to impress relatives and friends, to hint to fellow neighbours that he/she has made it!

 

So rather than drafting up new policies to control loan quantum, we could use a simple solution:

 

Use different colour license plates to indicate loan duration!! (or to indicate % of monthly pay, or a combination of both.)

 

Black license plate for owners who didn't take loan.

Green for people who took 1-3 years loan. And so on. And a loud colour for people who took more than 7 years loan.

 

This way, there wouldn't be any fake face value for people who over commit to buy an expensive car.

 

LIKE. then i will hv black colour plate to show off. hahaha...

[Voodooman]

Ya.. the mother is guarantor. . Crazy right? My friend stressed out when the nephew asked him to be guarantor initially.. haha

 

It is, people like him helps to push up COE prices for all. It doesn't matter if he has bought a pre-owned car, the number of cars allowed on the roads is limited while he just added to the demand, supply is same, demand is up, price climbs. Banks and govt happy, most of us who can still afford it LL pay more tax, this is what I called Collateral Damage.

 

Leverage and unconditional love in this case, can distort real market clearing price, hence the boom and bust cycle.

Edited February 3, 2013 by Voodooman

[Mockngbrd]

LIKE. then i will hv black colour plate to show off. hahaha...

Go jb with black plate sure tio rob

[Roh96]

That's why the 100% loan is crazy.. I woulnt have paid 140k and down 3k for a car at all.. now youngsters so easy to buy 140k to 200k car when they are earning less than 5k a month.. they are only enriching your mental state. But not their bank accounts.. only LTA, banks and car dealers are enriched.

 

I guess 140K can only buy an entry level car. One Altis already cost more than 140K, so what can we expect?

[Pokyman]

I too agree if cant afford then dun drive.

 

Then again, those who made it and are rich, yes, they are entitled to buy as many cars and houses as they would want to. They would have earned that right to. I would to if i had the cash.

 

But what if those middle income earners who desire to own one? With things as it is now, it is very difficult to have a shot at that Merc or condo without killing ur savings. Plus the costs of raising kids now.. It is no wonder those who chase the cars and condos are not willing to have kids ... and we have to import another million or 2 of foreingers in because we are not replacing ourselves. And this will apparently lead to a whole of issues we are familiar with.

 

This vicious cycle is not going to be solved in this generation or even the next.

 

Bottomline is, if not born rich or elite, too bad. Work harder and smarter ... If work harder and smarter also CMI, then suay liao ...

[Deckbuild]

Good news. I got friend's nephew who bought a 140k car and took 140k loan yet earn $3k a month... These 100% loan thingy are making the GenY poorer in the long run bec they are thinking only of current material comfort.. the parents are the screwed ones bec still have to help their children maintain their life style

 

Woah! Earn 3k, take 140k loan.... Next time when want to buy HDB KPKB govt no help but in fact already spend all hard earn money on mthly loan....

[Deckbuild]

I guess 140K can only buy an entry level car. One Altis already cost more than 140K, so what can we expect?

 

If the car was purchase prior to the first CEVS discount, 140k can get a VW golf or Jetta.

[Maz0608]

The measure depends on the intention. Is the reason for high COE due to cheap/max loans or overwhelming demand. We have seen from the last few CM for property that tightening the loan flow has not really curbed rising prices. Consumers may be taking max loans cos its cheaper and the alternative use of their cash can be better utilised elsewhere.

 

If supply remains largely the same ie limited, having a similar LTV approach for cars may not bring about the desired effects in driving COE prices lower.

I think the objective is not to lower the COE price but rather to control over leveraging by some folks who are paying through their nose to buy a car.