Car dealers preparing for coe supply spike!

[Darryn]

based on the latest dereg figures released by LTA this am, it's likely no spike yet in COE supply for the next quarter (Nov-Jan 2015).

my est by using LTA's formula, it's another positive bump... 12-13% more Cat A n 10% more Cat B for the next quarter.

 

 

But actually a 10% jump quite significant - just have to wait and see what it does to prices...

[13177]

They are still a lot of people continue to buy after COE expire.

I already saw 2 new Altis (replaced the old Atlis) retaining the old number plate at my mscp for the past 2 week.

There are still many rich people buying brand new car to replace their existing car?!

[Jamesc]

after owning cars for 10 years, hopefully many r retired/retiring n no longer need car. plus, hopefully the 40% deposit is too much for young drivers.

 

 

Why only target young drivers?

 

That's just age discrimination.

 

[yo2020]

Why only target young drivers?

That's just age discrimination.

well, even the insurance companies also charged them much higher!

[Whizzard]

The existing marginal car owners (those who have stretched themselves financially to own their current rides) whose cars are expiring will be squeezed out due predominantly to (i) higher COE prices leading to lower affordability and (ii) more stringent financing. They are likely to drop out of the car market with COE at current levels, freeing up supply to the market in general.

 

The kiam kannas who can afford it and who have kept their cars for 10 years will return to the market to buy replacement cars. They will not be freeing up their supply to the market.

 

New car models e.g. Merc C class and Macan will lure some existing car buyers to upgrade, leading to additional demand for COEs because their existing cars will not be deregistered but sold to the 2nd car market.

 

New aspiring car owners who have been waiting on the sidelines (and there will always be such new buyers) will come in when they get tired of waiting for COE prices to drop or when price of COE actually slides. What is the price level of such buyers? This new demand will absorb the supply freed up by people who can't afford to replace their cars. They will determine the clearing price of COEs.

 

Barring a recession (which makes everybody, incl the rich feel relatively poorer), I think COE prices are likely to moderate in the coming months due to the large supply being released to the market. I can't see COE prices crashing as they will be supported by the new aspiring car owners who are keen to own their first car.

 

I think a point we can all agree with is that with the larger quota of COE coming on-stream, prices of COE will not rise. Car dealers are happy to see lower COE prices because it is easier to sell cars at lower COEs. The key beneficiary will indeed be the car dealers.

 

 

 

Edited September 12, 2014 by Whizzard

[Wongwings]

GE coming, need to dangle some goodies for potential/existing drivers.

[Jamesc]

well, even the insurance companies also charged them much higher!

 

Insurance premiums are based on the risk profile of the driver.

 

So you think people who pay higher premiums should also

 

pay more for the car?

 

[Forte3737]

Actully not much also. a 10% rise in CAT A means around 630 COEs avaible only

 

But actually a 10% jump quite significant - just have to wait and see what it does to prices...

 

[car138]

With anticipated increase in COE Quota next quarter based on Jul & Aug 14 de-registration statistics from LTA, will we get to see a drop in COE prices in the next 3 bidding exercises ( Sep 2nd, October 1st & 2nd biddings)?

[joshua182]

COE goes where the wind blows... All over the place. I'd wish it was more stable and everyone else probably does too but as long as we're in the rat race, it's always gonna mess with us, along with everything else.

[Allen]

dun think there will be a spike in the supply of COE, in order to increase the supply of COE, old cars needs to be de-register first.

I have ask my colleagues whose car's COE will be due in 2015 to 2016, 8 out of 10 will extend their COE for another 5 years at least as they feel that forking out S$50k as downpayment for a Japanese bread and butter car is not logical. so those who are hoping for an increase in COE, I think can start waking up and stop dreaming.

[Piyopico]

Its not rocket science. With COEs supply at a low of 22000 in 2013 to the highs of 100,000 even if LTA keep some of the quota we are still looking at an average of 40000 to 50,000. This is 2X of what we get now. Will the market will absorb 20,000 every month from next year? How long can it continue to absorb these figures? Common sense dictates it will drop as long as the financing rules do not change.

 

Demand can roughly gauge from the number of bids placed for every bidding. I dont think the unsuccessful bids total more than 10000 a year. When prices drop, do you think the supply for cars will rise by another 10000? If it does, will demand continue? It has to be a yes and yes or else COE has to drop. Another 20-30K imo.

[So_nice]

Just renew Coe and drive 10 more yrs if ur car condition is still good.

 

Anything between 30-50k will be good. 1 yr only lose 3-5k depending on pqp.

 

Extra money just buy Rolex. Why fert over can buy new car or not? Haha

[yo2020]

Actully not much also. a 10% rise in CAT A means around 630 COEs avaible only

ya, we r looking at roughly 70 more Cat A in every bidding exercise on top of the current 570 to make it a total of 640.

as a comparison, this shall b 75% more than the same period last year when there was a mere ~365 Cat A in every bidding exercise.

[Forte3737]

ya, we r looking at roughly 70 more Cat A in every bidding exercise on top of the current 570 to make it a total of 640.

as a comparison, this shall b 75% more than the same period last year when there was a mere ~365 Cat A in every bidding exercise.

I dun think it will fall below 60k.

[Soya]

Just renew Coe and drive 10 more yrs if ur car condition is still good.

 

Anything between 30-50k will be good. 1 yr only lose 3-5k depending on pqp.

 

Extra money just buy Rolex. Why fert over can buy new car or not? Haha

 

One reason why COE is so high is becoz many ppl seem to hv an allergy towards used cars. How else do u explain why those marginal buyers keep asking for populist COE policies to suit them to they can buy a new car? Knn.....got limited budget still cannot buy used meh?

 

And u suggesting ppl extend another 10 yrs?.......

[So_nice]

 

One reason why COE is so high is becoz many ppl seem to hv an allergy towards used cars. How else do u explain why those marginal buyers keep asking for populist COE policies to suit them to they can buy a new car? Knn.....got limited budget still cannot buy used meh?

 

And u suggesting ppl extend another 10 yrs?.......

I 怀旧...lol

 

Car can drive can Liao. Unless u got a lot of spare cash otherwise can't make demands. Beggars can't be choosers!

[Notsogoodman]

Just renew Coe and drive 10 more yrs if ur car condition is still good.

 

Anything between 30-50k will be good. 1 yr only lose 3-5k depending on pqp.

 

Extra money just buy Rolex. Why fert over can buy new car or not? Haha

 

 

There is still PARF rebate....Assuming a PARF rebate of $10k and a $40k COE

 

1. Renewing 10yr COE will cost $40k upfront paying and foregoing a cash rebate of $10k.....

 

2. Deregistering the car will yield $10k cash, and add in another $40k cash (which one was ready to pay for 10yr COE renewwal), that will be $50k cash for downpayment.... If COE is at $40k, the total basic cost of a car with an OMV of $15k would be about $74k, which means that a prospective buyer will still have choices

 

Same $$$ down, renewing a 10yr old car for 10 more yrs VS paying for a brand new car with the latest tech and warranty