How low will COE go?

[Dark]

You are confused with the 50% loan matter. Which comes into effect on Monday.

 

The ARF matter only comes into effect When the car is registered with a COE bidded in this coming round.

 

All COEs securred Before March will still be the 100%ARF calculation.

 

So in theory, those luckyy Cat.B buyers who already got their COE, but has not use it to register a car, may want to register for a higher OMV cars(if the AD allow them to do it or break contract and go buy other brands) to enjoy the 100%ARF to the max!!

 

Ok got you. I miss that part about new ARF applicable based on Mar COE bidding onwards. Makes sense now.

[Yeshe]

Actually why all of u so confident Coe will drop a lot?

1) sg got many richie rich la...

2) even if drop, many will Chong in to buy then next bidding also go back up..

3) if really drop, might not be so easy to change car also as many will not get good price for trade in... End up also need to fork out $$ to top up current full settlement...

 

So Coe not necessary will drop a lot.. Maybe drop a little bit only la...

 

rich doesnt mean brainless, even if the rich wants to buy, they also wont kill each other for the next few COE bids.

[Astralee]

Guess will not drop more than 10k.

 

[Dark]

Guess will not drop more than 10k.

 

I hold the view that it will be more than 10k judging from the way AD are dropping price (30-40k).

 

Those with backlog orders will see no point in bidding high too if they expect COE to drop since this will maximize their profit.

[Thaiyotakamli]

Yes not incorrect.

Debatable but not incorrect.

 

Thats why i advocate huge DP and short loan or fullcash.

People like me always walk away unscathed either ways.

 

Not about rich or poor.

About choosing a car suitable for yourself and financial position.

 

Cheers

like this

[Thaiyotakamli]

Actually why all of u so confident Coe will drop a lot?

1) sg got many richie rich la...

2) even if drop, many will Chong in to buy then next bidding also go back up..

3) if really drop, might not be so easy to change car also as many will not get good price for trade in... End up also need to fork out $$ to top up current full settlement...

 

So Coe not necessary will drop a lot.. Maybe drop a little bit only la...

u dont know how majority bought their merc

 

i have some friends who owned merc from C class to E class but none of them paid a DP more than half and in fact majority only dp 10%

so even COE drop at 40k, it will mean that they still need to dp more

[Angcheek]

Bro as mentioned, i dont need more than one car and i am already driving my childhood dream.

So i probably wont be buying.

Although a nasty though of swopping to an M3 did cross my mind awhile ago.

 

 

didnt you chiongest too

[Beng2]

Yesterday's ST reported that MAS' new rule does not apply to credit/leasing company. That means they are still allowed to loan whatever amount they want. Which means they will now raise interest rates. Which means the 2nd hand cheap car I'm looking at will not materialise as more will buy 2nd hand cars and take full loan from these companies.

[Throttle2]

didnt you chiongest too

 

 

sorry dont understand

 

[Yewheng]

Yesterday's ST reported that MAS' new rule does not apply to credit/leasing company. That means they are still allowed to loan whatever amount they want. Which means they will now raise interest rates. Which means the 2nd hand cheap car I'm looking at will not materialise as more will buy 2nd hand cars and take full loan from these companies.

 

Thought finance minister say the new ruling come out is to make sure people to be financial prudence? sigh.

[Alim]

Yesterday's ST reported that MAS' new rule does not apply to credit/leasing company. That means they are still allowed to loan whatever amount they want. Which means they will now raise interest rates. Which means the 2nd hand cheap car I'm looking at will not materialise as more will buy 2nd hand cars and take full loan from these companies.

 

The Straits Times

http://www.straitstimes.com

Published on Mar 02, 2013

Credit firms push up car loan interest rates

They are not bound by new MAS rules and offer more flexible financing

 

By Christopher Tan Senior Correspondent

 

WITH restrictions imposed on the car loan quantum and loan period, at least two credit companies have raised interest rates to ride on the greater demand for more flexible financing.

 

Credit companies do not come under the purview of the Monetary Authority of Singapore (MAS), which announced on Monday that loans for new and used cars are now restricted to 50 per cent or 60 per cent of purchase price, and must be repaid within five years.

 

Observers expect that many potential car buyers will not be able to stump up the hefty down payments and that some will seek alternative financing sources like credit companies - despite the higher interest rates.

 

The Straits Times understands that Century Tokyo Leasing and Hitachi Capital have raised car loan interest rates by about one percentage point each.

 

Century's rates are now between 2.98 per cent and 3.28 per cent a year while Hitachi's are 3.25 per cent to 3.88 per cent.

 

Century's previous rate was 2.28 per cent while Hitachi's were 2.28 per cent for used cars and 1.88 per cent for new cars.

 

Both still offer loan tenures well beyond five years.

 

Banks and finance companies, which are regulated by MAS, have not revised rates despite speculation that they will do so to make up for a foreseeable plunge in earnings because of the loan restrictions. Their rates for new cars remain at around 1.88 per cent.

 

The move by the two credit companies did not take many by surprise. Mr Anthony Lim, director of credit company Kenso Leasing, said credit companies have been swamped with car loan applications because of the new rules. "We are also looking at raising our rates," he admitted.

 

Car manufacturer-owned finance firms also intend to support their customers.

 

According to Mr Say Kwee Neng, managing director of authorised BMW agent Performance Motors, BMW Financial Services financed up to three in 10 cars it sold before the loan restrictions.

 

He expects the figure to rise. Car manufacturer-owned financiers are also not legally obliged to comply with the MAS curbs.

 

A BMW Asia spokesman told The Straits Times: "We will do everything we can to support our customers without contravening the spirit of the law."

 

When contacted, the MAS said it is aware that "there are entities unregulated by MAS that also finance motor vehicle purchases".

 

It added, however, that such lenders account for less than 3 per cent of total motor vehicle loans.

 

An MAS spokesman said the authority will address "the risk of leakage" through financiers it does not govern in two ways.

 

It has instructed financial institutions that provide funds to credit companies to ensure that they comply with the restrictions.

 

It is also working with other government agencies "to strengthen the effectiveness of the car financing restrictions".

 

It would not elaborate on what it meant but observers expect it to ask the Ministry of Trade and Industry to pressure companies which provide car loans to keep within the new curbs.

 

Meanwhile, industry watchers said new-fangled schemes are likely to proliferate to help buyers overcome the heftier payments. These include balloon or deferred payment schemes, credit card payments, guaranteed buyback plans and overtrade.

 

The last refers to a practice of paying a higher price for a buyer's trade-in car to help him with the down payment.

 

[email protected]

[Camrysfa]

 

An indicator has emerged that COE for Cat A likely to soften to around $45K in next bid. ( drop 33K )

 

why? Borneo willing to make a deal at $97K for Altis. This car is usually around $50K (without COE ).

 

An Altis selling pice possible to drop to $75K, even in limited COE times. Bec trade-in car to buy new will not be attractive, confirmed a pool have DP problem, buyers turn to used market.

[Voodooman]

Bro as mentioned, i dont need more than one car and i am already driving my childhood dream.

So i probably wont be buying.

Although a nasty though of swopping to an M3 did cross my mind awhile ago.

 

M5 is more suited for you, not as harsh as M3.

 

[Kauctions66]

The move is pretty drastic. Can see the economy is going down hill from here on. To prevent ppl from buying cars it's obvious they do not want ppl to burden themselves with huge loans.

 

I second that. Its part of the bigger picture.

 

[Solar]

u dont know how majority bought their merc

 

i have some friends who owned merc from C class to E class but none of them paid a DP more than half and in fact majority only dp 10%

so even COE drop at 40k, it will mean that they still need to dp more

 

They already had car to trade in? Maybe that's the reason since their previous car already has high resale value to begin with.

[Solar]

u dont know how majority bought their merc

 

i have some friends who owned merc from C class to E class but none of them paid a DP more than half and in fact majority only dp 10%

so even COE drop at 40k, it will mean that they still need to dp more

 

They already had car to trade in? Maybe that's the reason since their previous car already has high resale value to begin with.

[Throttle2]

M5 is more suited for you, not as harsh as M3.

 

I dont need such a big car now since i bought wife a car to ferry the kids.

And also, M5 to me is unaffordable. Why would i want to put $400-$500k on a car? No lah, doesnt make sense to me. Desnt make sense and heart not comfortable = cannot afford.

[Solar]

I second that. Its part of the bigger picture.

 

Agreed on this too. Imagine the social problem if economy tanks and people deep in debt. Radx may need to open a branch at Bedok reservoir. .