Monthly Sharing on Dereg Data & Projected COE Quota

[Mustank]

Cat B COE 50k can secretly luffing liao

 

arm chio?

 

 

The mistake they make is overestimating deregistration in the past. That mistake is taken care of now in the new formula. What you think is a mistake (consistency of quota) is not a mistake to them. The key to them is population control and population growth. They have also sensibly reduce growth rate during high quotas cycles. When low quotas cycles happened, growth rate will be restored. This is the pressure valve they already said they will use.

 

the pressure valve is crucial

i always use it

[Penknife]

I really wonder why there are so many naive people who do not understand that BURST cannot happen, Dun they understand that the demand is there? Or did they chose to dream?

 

demand will always be there. but we do not know if there is high demand or low demand

 

and what makes up demand? what makes people wanting to buy a car?

 

Car is expensive here. so affordability comes into question.

 

affordability is relative. 2 people with the same $50k may feel a very different. So, what makes affordability different?

 

some examples are

 

1) job security - Mr A's job is foreseen to be secured for the next 10 years as compared to Mr B who works as a contract worker

2) economic health - Mr A's job will huat everyday but Mr B's job will only huat when the economy is good.

 

Quite frankly, burst will happen. it's just a matter of when.

 

However, I do agree with you that BURST cannot happen given the current situation.

[Andyngps]

 

If those 2011/2012/2013 cars with "high COE" start to deregister their cars prematurely and further adding on to the tsunami, Cannot imagine what will happen to the next COE drought come 2021~2023. Are the authorities thinking ahead and not repeat the same mistake again??

Ocs coming soon....but if ocs comes...then how to fulfil the 0.25% growth rate allowed?

[Caravan]

 

Car Population has been declining since Jan 2014 despite that so called 0.25% growth rate in the formula. So, in a way, LTA has been "keeping" the extra quota.

 

They are not keeping. This is an effect of the supply lagging demand.

[zerobim08]

Car owner is analogous to a drug addict. After rehab, they said they have given up car and swore to take public transport but like an addoct a higher proprtion will sooner or later relapse.

Edited April 21, 2015 by zerobim08

[Mkl22]

 

that's bcoz many of those COE bought in 2000-2005 (n supposed to due in 2010-2015) hv already dereg much early in 2006-2009.

 

Precisely. My family alone accounted for 3 cars during that period. Why would LTA 'cheat' on Dereg numbers.

[Hosaybo]

 

 

There was a period where COE were $80K - 90K. These guys may dereg their car early when COE falls and Altis sells at $80K. This will add on to the supply. If 2K per bid is Tsunami, looks like Tsunami is coming end of the year. For those cars who cant last till year end, maybe can take BMW for a couple of months. It could save you $10K.

 

This is another big big reason why gov will not let coe drp too much. However, these are high coe cars where there are still 100% loan so that might limit the number.

 

That period the coe already low. If scrap or what ever, the coe is going to be recycle right? This will add to the pool of current coe.

[Ticklish8]

For those who intend to renew their COE:

 

Singapore: THE number of people revalidating the certificate of entitlement (COE) of their ageing small cars hit a high last month. But those who are doing so are mostly going for the cheaper option - extending their right to continue driving their cars for only five more years, instead of 10.

The Land Transport Authority says that 285 Category A cars (those with engines below 1,600 cc) had their COEs revalidated in March for five years. Among Cat B cars (those with engines of more than 1,600 cc), 118 had their COEs revalidated that month for that length of time.

Only 52 cars in Cat A had their COEs renewed for 10 years; in Cat B, the number was 70.

Owners of cars which are nearing their 10-year COE lifespan may extend the COE for a further five or 10 years before the COE expiry date by paying the prevailing quota premium or PQP, which is the moving average of the COE premiums in the preceding three months.

Renewing the COE for five years means paying only half the PQP, which is now S$62,721 for Cat A and S$71,730 for Cat B cars.

But the difference is that unlike the 10-year COE, the five-year COE is non-renewable, meaning the car has to be deregistered upon its expiry.

The sales manager of a mass market dealership said that he was not surprised by the spike in COE revalidations. "There are more and more people with cars reaching 10 years of age, and those who own smaller and cheaper cars are most likely to be those who - even if they beg, borrow or steal - will not be able to come up with the 40 per cent cash downpayment for a new car."

Under the vehicle-financing rules, a 40 per cent cash downpayment is mandatory if the open market value (OMV) of the new car is below S$20,000, and 50 per cent if the OMV is above S$20,000.

The sales manager said: "The Cat A PQP for five years is about S$31,500, which is lower than the downpayment for the cheapest decent mass market car of more than S$100,000.

"Even if you add the Parf rebate, it will still be less than the 40 per cent you require."

The Parf rebate, commonly known as scrap value, refers to the preferential additional registration fee.

Deregistering a car that is above nine years but below 10 nets a Parf rebate that is 50 per cent of the ARF (additional registration fee) paid. In the case of an old mass-market Cat A model, this is generally about S$6,000 to S$7,000.

The sales manager said: "By paying the PQP, you also do not have to take a car loan with a monthly instalment to service. So revalidating the COE would appear to be a less expensive way to continue driving a car."

But those who renew the COE of their 10-year-old cars have to consider a few important factors, he cautioned.

One is that the road tax for cars older than 10 years of age goes up by 10 per cent each year until it reaches a maximum of 50 per cent.

Another consideration is that the insurance coverage is limited to that for third-party fire and theft; comprehensive-coverage policies are not extended to such cars.

But perhaps the most important issue is the condition of the 10-year-old car. "Those who renew their COEs usually have cars with lower mileage that are still running well," said the sales manager. "Because with an older vehicle, you usually have to spend more money on maintenance and repairs."

 

[yo2020]

Only 6k each for Cat A and Cat B for over 10 years?

Meaning not many actually renewed their COE.

correct. last yr, on avg abt 180 cars extended every mth.

last mth, increased a lot... abt 550. but, it's still a minority as it was only abt 8.5% of the dereg cars (6446).

 

For those who intend to renew their COE:

Singapore: THE number of people revalidating the certificate of entitlement (COE) of their ageing small cars hit a high last month. But those who are doing so are mostly going for the cheaper option - extending their right to continue driving their cars for only five more years, instead of 10.

The Land Transport Authority says that 285 Category A cars (those with engines below 1,600 cc) had their COEs revalidated in March for five years. Among Cat B cars (those with engines of more than 1,600 cc), 118 had their COEs revalidated that month for that length of time.

Only 52 cars in Cat A had their COEs renewed for 10 years; in Cat B, the number was 70.

 

my est was 550 cars extended last mth, verified by LTA's 525!

[Penknife]

Deregistering a car that is above nine years but below 10 nets a Parf rebate that is 50 per cent of the ARF (additional registration fee) paid. In the case of an old mass-market Cat A model, this is generally about S$6,000 to S$7,000.

 

wow, my car got 9K PARF rebate. but only 1.5L car.

[Limwsv]

demand will always be there. but we do not know if there is high demand or low demand

 

and what makes up demand? what makes people wanting to buy a car?

 

Car is expensive here. so affordability comes into question.

 

affordability is relative. 2 people with the same $50k may feel a very different. So, what makes affordability different?

 

some examples are

 

1) job security - Mr A's job is foreseen to be secured for the next 10 years as compared to Mr B who works as a contract worker

2) economic health - Mr A's job will huat everyday but Mr B's job will only huat when the economy is good.

 

Quite frankly, burst will happen. it's just a matter of when.

 

However, I do agree with you that BURST cannot happen given the current situation.

 

Economics 101. There's no such thing as high demand or low demand. Demand is a line for most "normal" products. Supply is a vertical line because LTA is not going to increase the supply even if the price goes infinite. The equilibrium point where the price that demand is willing to pay for the supply is the COE premium we are paying.

 

As the COE supply expands, the equilibrium point should move to the right, ie lower premium. That's why the economist commenting on COE price levels are saying that it is an insane market right now.

 

BTW, I have provided the monthly income statistics by age cohort. The blue box represent the group of people with the income level that can purchase a car comfortably based on the "famous" 5.5 K is required before a car is affordable.

 

 

More economics 101. A demand line is build up by testing the market like this

If COE is free, everyone will want it

If COE premium is 10K, number of quantity demand will be 200 000 buyers

If COE premium is 20K, number of quantity demand will be 140 000 buyers

If COE premium is 30K, number of quantity demand will be 80 000 buyers

If COE premium is 30K, number of quantity demand will be 40 000 buyers

 

Of course, the graph in the picture is just a presentation as the demand line is unknown except where the price points have been tested, ie 55K - 75K COE premiums.

Edited April 22, 2015 by Limwsv

[Mustank]

 

my est was 550 cars extended last mth, verified by LTA's 525!

 

very zhun liao lah!!! zhun to the point of scary man!

everytime i come in, i only come and seriously read what you say

you are really coe guru!

[Forte3737]

That is still a lot.

 

very zhun liao lah!!! zhun to the point of scary man!

everytime i come in, i only come and seriously read what you say

you are really coe guru!

 

[Mustank]

That is still a lot.

 

 

cat a 62k liao

[Mustank]

a:62

b:63

[yo2020]

 

early projection for the next's next quarter:

 

below is the working for the projection for Aug-Oct.

figures in red r est or unknown.

next update on 12 May after the Apr's figures r released by LTA.

 

 

 

 

this is updated basing on LTA's jz released Apr's data.

Cat A & B r slightly less than projected but it's still looking good to hit target.

Cat E has gone up due to lesser new taxi reg.

next update shall b on 12 Jun.

[Angcheek]

Look like after aug is a better period

[Limwsv]

Looks like a shortfall of 5.2% in the projected Cat A de-registration. Assuming that this ratio stays constant, the available COEs for Cat A for the next cycle will be 10600, around, about 1750 per auction. That will be 150 less than the expected tranche.

 

Cat B shortfall is about 4.6%. Assuming it to be constant also, the available COEs for Cat B will be ~ 6400. Over 6 bids, each auction will have 1070 COEs.That will be 80 less than the expected numbers.

 

Looks like we will be seeing a convergence in COEs for big cars and small cars again soon.