How low will COE go?

[Chowyunfat]

Almost a foregone conclusion - Mar 13 COE for Cat A will be above 60k due to more than 300 orders before 26 feb plus backlog with COE rebate above $70k.

After this backlog is clear there will not be enough orders for new car dealers to bid for the Mar 27 exercise, and COE should drop like an atomic bomb to less than $10k or $1!!!

[Jp66]

Few of my friends shorting COE as a group, they going to bid at $1

for COE to plunge, they should not bid.

 

simple mathematics, assuming there are 10 COE available. 2 AD bid 50k and 40k, but 9 other bid $1, COE premium will shoot up from $1 to $40k.

[Mehaha]

Strange no one talking about those that have been lending monies to Used car dealers. May it be banks or credit companies. Surely these guys are pulling their lines right? That makes lots of gung-ho dealers very desperate man!!

[Chucky2007]

Yup solid gold Rolex.

 

I mostly wear Solid gold Rolexes so when i say Rolex, i meant solid gold.

Sorry didnt explain, ,

 

 

 

 

Ps dont flame me hor...

Haha sibei haolian.. But I like

[Throttle2]

Haha sibei haolian.. But I like

Aiyah talk c--k only lah, i wear Seiko.

 

[Chucky2007]

Just a thought on Coe quota.

 

Currently LTA release around 200+ to 300+ new Coe. Other than the fact that everyone knows the real demand for a high price Coe may be capped, will supply from scrapping of existing cars increase the pool?

 

If Coe is low, existing car owners with a 8 years + or 9year car may renew Coe..

 

But if I am a car dealer with around 50 cars that I have paid $$ to the sellers and are now waiting for buyers.. I will have around $1.5mil in my inventory.

 

With this new measure, my first move is to improve cash-flow. Immediate task at hand is to identify which model least likelY to sell, which car is near break-even from scrap. Will easily lelong or scrap these 2 categories of cars to improve my business cash position to handle the new MAS rule.

 

If most dealer react this way, wouldn't there be a few hundred or thousands more car being scrap for the next few months? Hence even lagi more supply..?

 

Best news for car buyers coming soon in the next few months!

[Chucky2007]

Aiyah talk c--k only lah, i wear Seiko.

I also have Seiko.. Am wearing a citizen and casio also..

[Ahseng]

Just a thought on Coe quota.

 

Currently LTA release around 200+ to 300+ new Coe. Other than the fact that everyone knows the real demand for a high price Coe may be capped, will supply from scrapping of existing cars increase the pool?

 

If Coe is low, existing car owners with a 8 years + or 9year car may renew Coe..

 

But if I am a car dealer with around 50 cars that I have paid $$ to the sellers and are now waiting for buyers.. I will have around $1.5mil in my inventory.

 

With this new measure, my first move is to improve cash-flow. Immediate task at hand is to identify which model least likelY to sell, which car is near break-even from scrap. Will easily lelong or scrap these 2 categories of cars to improve my business cash position to handle the new MAS rule.

 

If most dealer react this way, wouldn't there be a few hundred or thousands more car being scrap for the next few months? Hence even lagi more supply..?

 

Best news for car buyers coming soon in the next few months!

 

 

Am hoping that your predictions will come true! Hoping to swoop in to for a 5 yr old car or if COE cat B drop lagi low, can consider new car to replace my ahpek altis.

[Wt_know]

it is a no brainer that if coe plunges to $30k, new car price fall follow by used car

7/8/9 years owner all change car ... new or used (<5yrs)

bammm ... a lot more coe roll in to the pool ... huat ah!!!

 

coe prive level need to be stabilise ... else roller coaster ... up up up all hold on to car ... then govt chut pattern ... down down down ... bam all change car

 

Just a thought on Coe quota.

 

Currently LTA release around 200+ to 300+ new Coe. Other than the fact that everyone knows the real demand for a high price Coe may be capped, will supply from scrapping of existing cars increase the pool?

 

If Coe is low, existing car owners with a 8 years + or 9year car may renew Coe..

 

But if I am a car dealer with around 50 cars that I have paid $$ to the sellers and are now waiting for buyers.. I will have around $1.5mil in my inventory.

 

With this new measure, my first move is to improve cash-flow. Immediate task at hand is to identify which model least likelY to sell, which car is near break-even from scrap. Will easily lelong or scrap these 2 categories of cars to improve my business cash position to handle the new MAS rule.

 

If most dealer react this way, wouldn't there be a few hundred or thousands more car being scrap for the next few months? Hence even lagi more supply..?

 

Best news for car buyers coming soon in the next few months!

Edited March 2, 2013 by Wt_know

[Alheych]

if everyone chiong-ing 2015 cos many cars getting deregistered, but LTA continue to regulate supply (means no bumper crop), the 2015 price that everyone has been waiting for may never come right?

[Adrianlim13]

actually , after reading so much... my conclusion is not much difference la.

 

1) current owners - if coe goes up or down, ur current resale car price moves in tandem .. buy high , sell high .

2) current owners with high coe cars :

 

-if coe maintains, no difference

-if coe crash to 10-20-30, can scrap(or rather export) the car and change to new ones.

 

so tell me where got difference ?

 

(only difference is 50% downpayment which i think is right . u want it, u save n pay for it. Those who kpkb clearly dont have ready cash for whatsoever reasons...)

[Angcheek]

 

The new rules tackled the new and secondary market.

 

But as some of them are saying , if COE drop , many will extend their car life span.

 

In such case, deregistration rate may not be accurate .

 

 

[Camrysfa]

actually , after reading so much... my conclusion is not much difference la.

 

1) current owners - if coe goes up or down, ur current resale car price moves in tandem .. buy high , sell high .

2) current owners with high coe cars :

 

-if coe maintains, no difference

-if coe crash to 10-20-30, can scrap(or rather export) the car and change to new ones.

 

so tell me where got difference ?

 

(only difference is 50% downpayment which i think is right . u want it, u save n pay for it. Those who kpkb clearly dont have ready cash for whatsoever reasons...)

 

 

Let's say a car bought at $140K, $80K COE and $16K OMV,

 

---- u mean it is very easy ( not painful ) for the owner to scrap it at say year 2?

 

 

[Throttle2]

actually , after reading so much... my conclusion is not much difference la.

 

1) current owners - if coe goes up or down, ur current resale car price moves in tandem .. buy high , sell high .

2) current owners with high coe cars :

 

-if coe maintains, no difference

-if coe crash to 10-20-30, can scrap(or rather export) the car and change to new ones.

 

so tell me where got difference ?

 

(only difference is 50% downpayment which i think is right . u want it, u save n pay for it. Those who kpkb clearly dont have ready cash for whatsoever reasons...)

 

There is some difference although you are quite right, sell low, buy low.

 

Current owners with high COEs cannot sell their cars without losing a chunk

The scrap vAlue is nowhere near market value.

All else equal, they are left high and dry servicing a bigger loan over a longer period for the same car.

 

Current owners with low OMV (under $70k) cars nearing end of COE will benefit the most.

They can scrap if required since scrap is near market value.

Take the money and buy a new car for much cheaper than before.

They can choose to renew COE to drive another ten yrs cheaply depending on the condition of their cars.

 

But the DP alone will prevent a lot of people from reentering.

Current owners who cannot recoup enough cash, cannot buy. They also cannot afford to extend COE which requires one time full payment.

 

Basically either way you look at it. Dont buy car if you dont have one to trade now.

 

 

 

[Voodooman]

actually , after reading so much... my conclusion is not much difference la.

 

1) current owners - if coe goes up or down, ur current resale car price moves in tandem .. buy high , sell high .

2) current owners with high coe cars :

 

-if coe maintains, no difference

-if coe crash to 10-20-30, can scrap(or rather export) the car and change to new ones.

 

so tell me where got difference ?

 

(only difference is 50% downpayment which i think is right . u want it, u save n pay for it. Those who kpkb clearly dont have ready cash for whatsoever reasons...)

 

Parf is 75% of ARF when scrapped by year 5 and we haven't consider the profit margin of the AD, discount on the body (new and preowned). To buy another new car, you need to pay more ARF and the AD his profit, so only those with deep pocket can scrap and buy new, most will need to drive at least 3 years to get out, unless COE crashes to 10k, which is unlikely. Many people with high COE car will be stuck with their rides for a long time, hope they bought something they like.

 

Those with 10 years loan, they are screwed, of course.

[Throttle2]

The new rules tackled the new and secondary market.

 

But as some of them are saying , if COE drop , many will extend their car life span.

 

In such case, deregistration rate may not be accurate .

 

 

Extend must have cash.

If COE is $30k, need to cough out full amount or perhaps do a reloan over 5 yrs and pay higher interest.

 

 

[Throttle2]

Those with 10 years loan, they are screwed, of course.

 

Sounds like music to my ears.....

 

 

 

But screwed or not depends if they have money somewhere backing the loans.

If really borrow on speculative future income, then confirmed stamp chop, SCREWED....

[Galant1688]

Let's say a car bought at $140K, $80K COE and $16K OMV,

 

---- u mean it is very easy ( not painful ) for the owner to scrap it at say year 2?

 

 

These group of owners will suffer huge loss.

Scrap yr 2

Part 75% = 12k

Coe rebate = 64k

Total cash back if scrap = 76k

 

Export car body say 30k for a jdm

 

Buyer lose 40k over 2 yrs!!! Not including his car loan charges for early settlement n penalties.

buyer will not scrap.. As It is negative liability ...

 

Welcome to the harsh fact...