Next Coe this Monday 25mar

[Civic6228]

yes, buyer who is the one is paying and no one is pointing a gun to their head.

but, they have no choice ... do they?

is there a FAIR CHANCE for buyer to buy car without coe and let him/her to decide what is the value of coe?

no choice, the value of the coe is determined by the dealer.

you talk to dealer, hey you set coe rebate at $73K means you don't expect the coe falls below $73K? isn't it too high?

dealer will ask you go fly kite. they will tell you, you go see all other dealer la ... all set $70K-73K rebate ... so you will LL go back to the dealer

ie: omv+arf+tax+gst+profit+coe = selling price. straightaway you know how much they factor as coe liao. isn't this mean coe is pre-determined even before bidding start (2 weeks later)

 

if a buyer want to buy a car, he/she goes to AD/PI and AD/PI all lump COE to the car

yes, he/she can bid the COE and then go buy a car. but, will AD/PI sell the car without COE in true value? answer is no.

 

give you a scenario, if all retailers in singapore sell rice at $50/kg ... do you think is buyer problem?

you can say, all don't eat rice la, there are alternatives.

it's easier said than done. one want to eat rice, one pay. similar to car.

 

and coe is dealer most lethal profit margin.

coe up $10K, car price up $10K

coe down $10K, car price down $5K (you laugh already, may be down $2K nia)

 

Buyer where got no choice ..... there is still a choice to buy and not to buy what .... i do not agree that there is No choice.

 

Tell you a true story .... many years ago, a friend of mine bid for COE on his own and he managed to secure a COE. With his COE, he went to the different ADs to look and buy his car. He was pissed off by many of the ADs as they offered him a price that is ridiculous high for a car without COE. He finally went ahead to buy one which he felt was offering him the best deal. But did he really got a good deal .... I doubt so, he probably would get better value for a car complete with COE. ADs also have their bottom line to consider and they have their right to the price strategy.

 

Like I say, I agree with your point about "Pay as you Bid" .... but this is a policy that the Gahment has to implement and it has nothing to do with ADs. Whether "Pay as you Bid" will bring down the COE, noone knows .... it could be as simple as the buyers taking two loans - one for car and one for COE.... it could be just LPPL.

 

At the end of the day ..... there is a choice and I prefer noodle.

 

 

 

 

 

[Wt_know]

obviously, AD fk buyer upside-down if owner bid their own COE

i rest my case that COE is controlled by AD ... buyer either buy or don't buy ...

 

Buyer where got no choice ..... there is still a choice to buy and not to buy what .... i do not agree that there is No choice.

 

Tell you a true story .... many years ago, a friend of mine bid for COE on his own and he managed to secure a COE. With his COE, he went to the different ADs to look and buy his car. He was pissed off by many of the ADs as they offered him a price that is ridiculous high for a car without COE. He finally went ahead to buy one which he felt was offering him the best deal. But did he really got a good deal .... I doubt so, he probably would get better value for a car complete with COE. ADs also have their bottom line to consider and they have their right to the price strategy.

 

Like I say, I agree with your point about "Pay as you Bid" .... but this is a policy that the Gahment has to implement and it has nothing to do with ADs. Whether "Pay as you Bid" will bring down the COE, noone knows .... it could be as simple as the buyers taking two loans - one for car and one for COE.... it could be just LPPL.

 

At the end of the day ..... there is a choice and I prefer noodle.

Edited March 28, 2013 by Wt_know

[Alfc]

It is a valid point that ADs do have a hand in setting prices but the buyers themselves cannot be free from blame.

I think bro Wt sees demand for cars as inelastic, hence the "no choice" which is true for one part of the equation.

However, I believe the fact that there are indeed a group of buyers (spoilers if i may called them) who are willing to accept the price set.

They are the very ones that constitute the "demand" and you dun need a lot of such spoilers to soak up the so-limited supply.

Should all buyers say no to priced-in $73k COE, the ADs would simply drop price to say $70k or any amount that would attract the next group of spoilers.

[Mcfguy]

Between car being a luxury and a necessity is a whole range of greys within. We will never know everyone's need for owning a car. But just like the rice example given above, one can choose not to eat rice.. but to some...rice is a must.

[Wt_know]

yup, this is the word i'm finding.

 

population 5.2M ... 20% (conservative) are car buyer equal to 1.04M (about current car population) ...

1.04M people MUST buy even COE is > $100K ... i say one ! just buy car already, go home eat roti and tell friend on diet

 

6.9M population? ho say liao !!!

 

It is a valid point that ADs do have a hand in setting prices but the buyers themselves cannot be free from blame.

I think bro Wt sees demand for cars as inelastic, hence the "no choice" which is true for one part of the equation.

However, I believe the fact that there are indeed a group of buyers (spoilers if i may called them) who are willing to accept the price set.

They are the very ones that constitute the "demand" and you dun need a lot of such spoilers to soak up the so-limited supply.

Should all buyers say no to priced-in $73k COE, the ADs would simply drop price to say $70k or any amount that would attract the next group of spoilers.

Edited March 28, 2013 by Wt_know

[Turbonetics]

your maths all wrong lah...

 

Let me put it this way.

 

Lets say there is

 

400 quota. And 600 bids. Put it another way, All you need to do is to control 201 bids you CAN SET THE COE price ANYWHERE below the lowest price of the 399 bids.

 

It does not matter how the other 399 bids because EVERYONE pays the lowest bidder. Bottom line is you just have to control a sizeable number of bids.

 

 

ok,thanks for correcting.

[Yrvsport]

hahaha no matter what how many bidders you talking about... the result still in their hands...Don't Get Fool By The Fools...

Edited March 28, 2013 by Yrvsport

[Windchoco]

2nd that... they shld hav shot the guy that intro the 10yr-loan/100% and removed the 7-year loan/30% limit. That was how the chaos was created.

 

How to shoot Ah Gong? U ?

 

I remember the words then were something like - "changing to usage based taxing so that more can afford a car" and that "Singaporeans don't mind a little traffic jam, as long as they all get to buy and enjoy their cars"

 

Thats like way back in 2002? 10 years later the experiment did not work as intended because someone realised that SGreans will just continue buying no matter how high the COE as long as they can make the monthly installments, and continue driving no matter how high the ERP is..

 

In the end if all crash together then his problem again..

Edited March 28, 2013 by Windchoco

[Civic6228]

Between car being a luxury and a necessity is a whole range of greys within. We will never know everyone's need for owning a car. But just like the rice example given above, one can choose not to eat rice.. but to some...rice is a must.

 

Poor example lah ... how can the physilogical need for food be compared to the the Esteem need for a car.

[Coolad]

How to shoot Ah Gong? U ?

 

I remember the words then were something like - "changing to usage based taxing so that more can afford a car" and that "Singaporeans don't mind a little traffic jam, as long as they all get to buy and enjoy their cars"

 

Thats like way back in 2002? 10 years later the experiment did not work as intended because someone realised that SGreans will just continue buying no matter how high the COE as long as they can make the monthly installments, and continue driving no matter how high the ERP is..

 

In the end if all crash together then his problem again..

 

Good summary... actually i am saying to shoot the brainchild that suggested removing those safe gates. Usually some highly paid civil servant/ scholar that came up with the idea and submit proposal to the top guy for endorsement. Same witht the FT/ housing/ public transport policy.. all one dimensional crap that just hurt the pple and nation in the long run....

 

But then again... a significant portion of the population are just too immature to be given all these financial freedom... we shot ourselves in the foot....

[Wahlaoeh]

By agreeing to the price (which includes the COE at the prevailing level), isn't the buyer already placing the bid? Just that not he physically clicking the buttons. But he did AGREE to the price, i.e. willing to pay the price of the COE at that time. If nobody buy the cars from the AD, the AD how to bid $70k for COE?

 

For your second part, AD's profit is already built into the price which includes COE. They don't need to bid high in order to "preserve" their profit. Usually the rebate level is a few thousand dollars below the current level so even if COE really drop they still make the EXTRA profit of that same few thousand (between prevailing COE and the COE rebate). They are not "coughing out" money from their margins. In fact they already ate up some additional margin from the drop in COE. Perhaps it is best illustrated by actual example.

 

Real life example (my friend):

Friend bought Golf 7 during launch. Was $137k net. At that time, the previous COE exercise was at around $80k (rebate was around $70k). At the next COE exercise VW straight put in a bid of $98k for him (this shows that VW had already factored in additional buffer of $18k of COE provision in their price). End up COE was $92k. Let's say COE had fallen to say $65k, wouldn't VW have made even more profit? COE had dropped total of $15k but they only return $5k to my friend and pocket the balance $10k and they still "earned" the $18k of COE provision that was *already built into the selling price* but not utilized so after contra off the $5k returned to my friend, they still pocket the additional $10k + $18k = $28k in total when COE had fallen to $65k instead of rising to $92k where they only pocket additional $6k from their COE provision.

 

Summarize:

 

Selling price $137k based on latest COE of $80k

COE bidded at $98k (additional provision of $18k for COE)

Price of car sold to my friend w/o COE = $137k - $98k COE = $39k (already got normal profit "$x" inside)

 

Scenario A: Final COE $92k (against provision of $98k)

Actual price of car sold to my friend w/o COE = $137k - $92k COE = $45k (normal profit $x + $6k extra from unutilised COE provision)

 

Scenario B: Final COE $65k (against provision of $98k)

Actual price of car sold to my friend w/o COE after returning the rebate = $137k - $5k rebate - $65k COE = $67k (normal profit $x + $28k extra profit from COE drop and unused COE provision)

 

AD earn much more under scenario B, no? So there is no reason for AD to deliberately push up COE. Besides, high COE is also bad for business as it kills consumer sentiment.

 

the assumption is wrong. each AD's profit margin and car selling price is not mutually exclusive. You are making the assumption that the AD can sell the car at the same price with higher margin, while their sales volume is not impacted, and that needs other parties on the table to play the same strategy, which is not going to happen, read more on game theory.

 

[Bomby929]

Buyer where got no choice ..... there is still a choice to buy and not to buy what .... i do not agree that there is No choice.

 

Tell you a true story .... many years ago, a friend of mine bid for COE on his own and he managed to secure a COE. With his COE, he went to the different ADs to look and buy his car. He was pissed off by many of the ADs as they offered him a price that is ridiculous high for a car without COE. He finally went ahead to buy one which he felt was offering him the best deal. But did he really got a good deal .... I doubt so, he probably would get better value for a car complete with COE. ADs also have their bottom line to consider and they have their right to the price strategy.

 

Like I say, I agree with your point about "Pay as you Bid" .... but this is a policy that the Gahment has to implement and it has nothing to do with ADs. Whether "Pay as you Bid" will bring down the COE, noone knows .... it could be as simple as the buyers taking two loans - one for car and one for COE.... it could be just LPPL.

 

At the end of the day ..... there is a choice and I prefer noodle.

 

The reason I believe is that AD is still allowed to bid COE. If you take the AD out of the equation, do you think that the AD will be trying their best to get your friend to buy from them or anyone with a COE in hand?

[Kar_lover]

the assumption is wrong. each AD's profit margin and car selling price is not mutually exclusive. You are making the assumption that the AD can sell the car at the same price with higher margin, while their sales volume is not impacted, and that needs other parties on the table to play the same strategy, which is not going to happen, read more on game theory.

 

Sorry really don't know what you're talking about.

 

What assumption are you referring to that is "wrong"? Wat you mean AD profit margin and car selling price is not "mutually exclusive". They are DIRECTLY related! Your third sentence also can't understand. In the example given (real life, not assumption) when dealer go in to bid for COE on buyer behalf, the sale has already been made (or at least the sales agreement has already been signed).

 

I am just saying that dealers do NOT benefit by high COE (in reply to previous person who said dealers purposely bid high because they don't want to pay out money to buyer should the COE fall below rebate level). In fact, in my example, it is the other way around (dealers stand more to gain if COE drops low).

[Dark]

Sorry really don't know what you're talking about.

 

What assumption are you referring to that is "wrong"? Wat you mean AD profit margin and car selling price is not "mutually exclusive". They are DIRECTLY related! Your third sentence also can't understand. In the example given (real life, not assumption) when dealer go in to bid for COE on buyer behalf, the sale has already been made (or at least the sales agreement has already been signed).

 

I am just saying that dealers do NOT benefit by high COE (in reply to previous person who said dealers purposely bid high because they don't want to pay out money to buyer should the COE fall below rebate level). In fact, in my example, it is the other way around (dealers stand more to gain if COE drops low).

 

You're right to say they stand more to gain if COE drops.

 

However, without a pay-as-u-bid system, there is no reason for the dealer to bid lower than the COE provision in the car price (98k in ur eg) and risk losing the bid. Anything lower (up to the rebate level) becomes their upside but they won't risk by trying to go lower, that's the key point.

 

It then becomes a dealer-vs-dealer game with the dealer who is able to secure the highest $ commitment and survive on the lowest min profit margin will win, with possible upside.

 

I think that is what people mean when they say dealer controlling COE price.

Edited March 28, 2013 by Dark

[Wt_know]

coe up or down, dealer make a cut of it

coe is the lethal weapon to chop buyer

 

i think need to change car cost formula to

 

omv + arf + tax + gst + ad profit + coe + coe variable profit .... huat ah !!!

 

You're right to say they stand more to gain if COE drops.

 

However, without a pay-as-u-bid system, there is no reason for the dealer to bid lower than the COE provision in the car price (98k in ur eg) and risk losing the bid. Anything lower (up to the rebate level) becomes their upside but they won't risk by trying to go lower, that's the key point.

 

It then becomes a dealer-vs-dealer game with the dealer who is able to secure the highest $ commitment and survive on the lowest min profit margin will win, with possible upside.

 

I think that is what people mean when they say dealer controlling COE price.

Edited March 28, 2013 by Wt_know

[Warthog]

why is it pure fantasy?

 

A cartel can be found everywhere and is a possibility. In fact, I think mathematically for a bidding system to actually function well, I think a large number of INDEPENDENT bidders is a requirement.

 

I do think that the AD have a vested interest in controlling the price. It is not the quantum lah. Whether it is 10k or 80k, the AD will want to manipulate the prices depending on the kind of sales orders they have on hand.

 

It is also in their interests to have large fluctuations in the COE prices.

 

COE can be manipulated only if there is a collusion of major bidders. But again, if there are no orders, bidders cannot manipulate the COE system.

 

It takes a lot of guts for dealers to secure COEs at high price without orders!

 

The COE system is open for all. Dealers with the best margins and biggest order book, calls the day. Blame the buyers who take their packages.

 

[inlinesix]

Go & bid your own lor. Pray hard that u will get $10k COE.

[Sdxx]

COE can be manipulated only if there is a collusion of major bidders. But again, if there are no orders, bidders cannot manipulate the COE system.

 

It takes a lot of guts for dealers to secure COEs at high price without orders!

 

The COE system is open for all. Dealers with the best margins and biggest order book, calls the day. Blame the buyers who take their packages.

 

Yup. More over it can only be open cat which valid for 3 months. If no buyer, sell at a loss?