How low will COE go?

[Altivo]

There'll be 'marginal buyers' for different makes.

 

for eg entry level lux car, BMW 3 /5 series are sought after by many to boost their image. Many will take max loan to drive these car.

for MIJ / MIK BnB cars, lower income group with desire to own car will take loan to go for these.

 

Of course, there'll be many prudent people with the cash but choose to drive something 'cheap'. So you cannot stereotype buyers by the cars they go for...

 

With the current 'cooling measures' these people will be squeezed down to the next affordable level...

 

Exactly, to use a car make and brand the buyer as marginal or not is the most silly thing to do.

[13177]

yeah.. everything is relative for low to middle class.. we can only chose a few enjoyment not all..

 

either you want to live in condo but in debts and worse due to no saving cannot buy car now.

 

or

 

you can live in HDB and have lots of saving.. and because of that, can buy car if you want to

True, if you are in the low to middle class, you cannot get to enjoy all the luxuries. Like some of my friends, they rather use the money to go holidays than buying a car.

[Karoon]

Easy to go around the new rules.

 

'Normal' 5 year loan on 50% of car value.

 

Balance 50% - Bank to offer 'bridging loans' service interest for first 5 years, then payment plus interest starts on 61st month.

 

Collateral is the car with 10 year COE.

 

Back to square one, ha ha! What's so difficult?

 

One of the most stupid ruling I have seen.

 

LOL... i think u underestimate our gahmen

 

i can imagine a bunch of young scholars given stacks of finance and legal documents and they spend days just highlighting loopholes and another team formed to plug them, sometime early last year

[Mustank]

Will see more people registering a SGD2 company to buy a company car....

 

I Thot the 5 yrs 50% rule applies to all cat a b e regardless of type of buyer? Unless you mean these clowns go buy cat c euro van :angry:

[Cheepo]

Will see more people registering a SGD2 company to buy a company car....

 

Ya, lots more vans on the road conveniently transporting nothing but an old sofa in the cargo compartment.

 

[Zanter]

True, if you are in the low to middle class, you cannot get to enjoy all the luxuries. Like some of my friends, they rather use the money to go holidays than buying a car.

 

Actually with current measure even middle income will not find it easy to buy an entry level continental, which currently is about 200k, as that would mean at least 100k DP. Unless the same entry level conti drops to 120k , then 60k is not to painful to cough out I suppose.

[Mockngbrd]

Did BMW and Toyota ever had a major industrial presence here?

 

Authorised Dealer no count hor. The link between Inchcape and Toyota is as close as that between your friendly ah beng handphone shop and Singtel. Ditto for PML and BMW.

BMW Asia is in SG. They actually have quite a good relationship with PML.

Edited February 26, 2013 by Mockngbrd

[GoodCar]

I think we at Singapore paying more for a car is already an accepted norm due to our physical and nation constraint.

But if buying an Toyota Altis here bccome five time more expensive than other country. Something is very wrong.

I think 1 to 2 fold still acceptable.

 

I thing this move of limiting the loan is a better way to bring price down and prevent our people from overstretching on a depreciating item. Unless one is using the vehicle as a revenue generating asset.

 

Just my humble opinion.

 

[macrosszero]

Cycle and Carriage may just bring Mitsubishi back into their lineup - it has all but disappeared since the COE spike.

[CH_CO]

Whilst i understand your point but that's not necessarily true. It is only your assumption (that MIK buyers are marginal). There are many who want a car with the best value and feel that this is what Korean cars are. Because as with many things, as you go up the ladder you get less incremental gains per additional dollar spent. So Korean cars at this time probably give the best balance of price and value. That doesn't make them marginal buyers. Real marginal buyers will go for the absolute cheapest as all they want is a car from point A to point B at the lowest possible price. MIKs are not the absolute cheapest. In fact these days they are not far away (price wise) from MIJ cars - the difference being the better features (and design) they offer compared to a similar MIJs.

 

For your second point, you have not shown any evidence that the previous loans are/were not sustainable as you claim. Again this is only your assumption. Based on an applied interest rate (AIR) of 1.88% flat rate, the effecttive interest rate (EIR) gets lower and lower the longer the tenure. For a 10yr loan, i believe a 1.88% loan is about 3%, maybe less. If i have $50,000 ot $100,000 sitting in my bank, i would rather invest for 4-5% return instead of saving on 3% interest. That's not over-extending myself. If govt really wanted to protect the consumer, they just need to reduce the max amount of loan that is allowed to be taken based on the borrower's current take home salary (eg 25%) rather than a limit based on the price of the car. When u based on price of a car, a person earning $5k/mth and a person earning $8k/mth are limited in the same way which doesn't make sense as what is over-extending to the former is comfortable to the latter.

 

 

To your first point , if you think i am doing baseless assumptions then i guess you are wrong. Dude , i work in the credit dept and i think of the guys here know. I know the stats of the ratio of the marginal lenders in different makes and income even until the demographics of these lenders but i cannot say it here due to various reasons. So if you want to compare the income of a KR make driver to any other make , apple for apple , you probably would find the difference in income. I was away from here for many reason and have warn in my previous post on potential sh1t happening. You can scroll back on my post to check.Can you prove me or at least tell me what dept you work in the bank to know this? While people point fingers , they always forget that the same accusation can be used on themselves. Self pawned as usual.

 

I am not sure if your brain works on aesthetics for things that don't last , given the quality , paint work and electronics in KR makes what makes you think it is absolutely better? Yes , if the car is made in Thailand under Toyota then it is made in Thailand and not MIJ , it is probably inferior. We all know the Thai made toyotas cars have an inferior quality just like we know the cars made in Japan are better. So it is pointless arguing this when i see is and hear from mechanics are the cost of maintenance and repairs for Korean makes are so high that it isn't worth it. Even the recent BB models like the cerato forte are having alot of problems as compared to jap makes like axio , allion , fit ,latio etc. Yes maybe an occasional lemon thats all.Those that i know which are driving the jap model has not mentioned of any problems as compare to those driving MIK complaining here spoil there spoil. So what is the point of this feature that feature when it doesn't last?

 

The issue here is we are comparing to marginal buyers which are going for price so please don't drag the higher models in , this way it is easier to compare and relate. When you say MIK not absolute cheapest , yes i agree but compare it to drivable cars with a certain amount of reliability not to trash cars which you won't even bother to look at unless no choice , but again you yourself is making assumptions.

 

 

As for your second point , you are assuming if you have the 50k or 100k , ok we can work on this . Yes, currently rates are at 1.88 , real rates are probably around 3%. Now the question i post to you is , you tell me you can invest to get 4~5% , is this investment absolutely risk less and the returns are guaranteed? If so , please name me that investment , i will put my whole fortune in it. If not , don't come and tell me c--k and bull story about people making this amount that amount. I have heard enough of this kind of crap which is not ealistic with those amounts. 50k cash want guarantee 4~5% , show me what investment? Else please don't be a joke. Another baseless assumption?

 

As for income , 8k vs 5k , given everything being equal i.e expenditures and stuff , what makes you think the banks would give the 5k a lower credit line as compared to an 8k fellow? As such , who can potentially spend more?

Edited February 26, 2013 by CH_CO

[Baphomet]

True, if you are in the low to middle income, you cannot get to enjoy all the luxuries. Like some of my friends, they rather use the money to go holidays than buying a car.

 

 

don't say class la..i change for u

Edited February 26, 2013 by Baphomet

[Ahseng]

My friend in the used car biz say that his boss toldhim to lelong the cars now!!!!

[Karu]

Does it mean that those 5yr old 2nd hand car will be the most sought after since can take 'maximum loan tenure'?

[macrosszero]

Even used older cars may have a market due to a lower required deposit.

 

The used car landscape will change but people adapt faster than you may think.

[Mockngbrd]

My friend in the used car biz say that his boss toldhim to lelong the cars now!!!!

better leg go and wait see what happens then to be holding onto non moving inventory i guess

[Baphomet]

any mention on renewal of COE?

 

Must pay full cash for 100% or same as buying cars; pay 40/50% and max loan 5 years?

[Mockngbrd]

any mention on renewal of COE?

 

Must pay full cash for 100% or same as buying cars; pay 40/50% and max loan 5 years?

COE renewal never had loan wan ler. full cash or prvt loan.

[Baphomet]

COE renewal never had loan wan ler. full cash or prvt loan.

 

haha isit? okie.. neber renew before.. ty