2016 Jan, 2nd COE Bidding Exercise

[yo2020]

The ADs already priced their cars @ $55K. question s what did the big boys budded? They could have bidded a couple of thousands below the $51K. So basically they gain la. Extra margins

 

hello, if they bid below $51k yesterday, they didnt get the COE!!

[edwin15]

I am curious, what are the concrete objections against a consumption base model other than the usual "fear of change" emotions?

 

In a consumption mode, assume COE drops to 10K, we pay 10K upfront.

 

Assuming that you need to drive into Shenton Way every day at peak hours, and assume that surge charges goes up to $25 per use.  So over 20 days, that will be 1K.  Over 1 year, that will be 6K, over 10 years, that will be 60K.

 

So the total cost of right of use of the car goes to 70K over a ten year period.  Which is about the price of an upfront COE back in 2014.

 

And that's base on an assumption that someone works 20 days a week and 12 months a year without taking breaks and so forth.  If he can change his work pattern, cost can come down and the total cost over ten years will be less.

 

 

For me I like my costs to be known upfront. With COE, I know how much I paid to drive.

 

With a consumption based model, the cost are spread over 10 years. You have no certainty what your cost is going to be over the next 10 years. (ERP rates can change)

 

Some more, if I have to be hurt, I rather be hurt 1 time big one and get it over with then be hurt slowly over 10 years.

 

Just my own feelings. 

[edwin15]

I am curious, what are the concrete objections against a consumption base model other than the usual "fear of change" emotions?

 

In a consumption mode, assume COE drops to 10K, we pay 10K upfront.

 

Assuming that you need to drive into Shenton Way every day at peak hours, and assume that surge charges goes up to $25 per use.  So over 20 days, that will be 1K.  Over 1 year, that will be 6K, over 10 years, that will be 60K.

 

So the total cost of right of use of the car goes to 70K over a ten year period.  Which is about the price of an upfront COE back in 2014.

 

And that's base on an assumption that someone works 20 days a week and 12 months a year without taking breaks and so forth.  If he can change his work pattern, cost can come down and the total cost over ten years will be less.

 

 

For me I like my costs to be known upfront. With COE, I know how much I paid to drive.

 

With a consumption based model, the cost are spread over 10 years. You have no certainty what your cost is going to be over the next 10 years. (ERP rates can change)

 

Some more, if I have to be hurt, I rather be hurt 1 time big one and get it over with then be hurt slowly over 10 years.

 

Just my own feelings.

 

Worst if after you bought at high COE and then they change to consumption based model. In this case, you get squeezed both ways.

[Runforyourlife]

Well that's the whole point if their intention is to limit rides in sg. If one feels squeezed, just shows lack of financial planning and simply insufficient buffer for the future.

[Showster]

Bro @Limwsv, I share your preference.

 

To understand the objections, just think of this.

 

In the area of car ownership and use, do Singaporeans like to pay and consume, or to not pay and not consume (pay-s-you-use)? If it is the latter, they could always have chosen not to own car.

 

Like Edwin15 mentioned, the worst case is pay (high COE) and cannot consume (due to high usage costs).

 

 

I am curious, what are the concrete objections against a consumption base model other than the usual "fear of change" emotions?

 

In a consumption mode, assume COE drops to 10K, we pay 10K upfront.

 

Assuming that you need to drive into Shenton Way every day at peak hours, and assume that surge charges goes up to $25 per use.  So over 20 days, that will be 1K.  Over 1 year, that will be 6K, over 10 years, that will be 60K.

 

So the total cost of right of use of the car goes to 70K over a ten year period.  Which is about the price of an upfront COE back in 2014.

 

And that's base on an assumption that someone works 20 days a week and 12 months a year without taking breaks and so forth.  If he can change his work pattern, cost can come down and the total cost over ten years will be less.

 

[BenTong]

hello, if they bid below $51k yesterday, they didnt get the COE!!

Oh that's true. You enlightened me. So maybe they could have bid at $55k. Slowly watch market put in the 21 at lower.. So they now pay $51. And make a better margin?

[Hosaybo]

Guess it is coming....else how to be car-lite. Gotta squeeze both ways. Next time, got those rich who dun care abt prices going around with less traffic, a substantial normal group deciding bet car or public and another tier who will be extinct due to high price and high usage cost pricing them out.

[BenTong]

Bro @Limwsv, I share your preference.

 

To understand the objections, just think of this.

 

In the area of car ownership and use, do Singaporeans like to pay and consume, or to not pay and not consume (pay-s-you-use)? If it is the latter, they could always have chosen not to own car.

 

Like Edwin15 mentioned, the worst case is pay (high COE) and cannot consume (due to high usage costs).

What's your take on the general COE trend? Esp Cat B

[Heman75]

Bro @Limwsv, I share your preference.

 

To understand the objections, just think of this.

 

In the area of car ownership and use, do Singaporeans like to pay and consume, or to not pay and not consume (pay-s-you-use)? If it is the latter, they could always have chosen not to own car.

 

Like Edwin15 mentioned, the worst case is pay (high COE) and cannot consume (due to high usage costs).

neither is good. the reason is because no one can promise you anything during the 10years of ownership or fix any cost. now we assume so many things. how are we so sure during the 10years of car ownership.. government wont impose this impose that . your fate lies in the hand of the government. regardless of how much you pay for the coe,, along the way the government happy happy tell u tax up yearly, parking up yearly ... u can only LL or give up. or they tell u all no need to pay carpark now free petrol free.. then u catch gold shit. 

[Jasbert]

You may check if a bid has been submitted on your behalf at this LTA website - https://ocoe.lta.gov.sg/PaInternetAction.do

[Limwsv]

For me I like my costs to be known upfront. With COE, I know how much I paid to drive.

 

With a consumption based model, the cost are spread over 10 years. You have no certainty what your cost is going to be over the next 10 years. (ERP rates can change)

 

Some more, if I have to be hurt, I rather be hurt 1 time big one and get it over with then be hurt slowly over 10 years.

 

Just my own feelings.

 

Worst if after you bought at high COE and then they change to consumption based model. In this case, you get squeezed both ways.

 

Well your point is fair enough.  It is a sensible way to manage household finances.

 

Unfortunately, the rest of us are all force onto the same path by the current charging model and we have no choices.  Also, it has not lessen congestion, thereby failing one of the goals of COE.  Second, it fails the social equity test, where those who needs the unique services of a car occasionally and who does not contribute to congestion is prevented from doing so.

 

In most course of actions, there will always be net winners and net losers.  Unfortunately, if LTA switch to a consumption model, you will happen to be one of those on the other side.  Hopefully, the net karma gained from the happiness of all the other people who would gain access to cars will outweigh the bad karma owe to people like you who now faces the uncertainty in costing the use of cars.

[titarium]

depends, buyers may be paying for the freebies

 

e.g. before car show, price is x, car show, price becomes x + 1K

 

If intend to sign on car show , should have already done homework , so nego is stronger.

 

Further more car show got quota as well , they need to hit quota before end of show , means all exhibitor die die have to sell X number of cars to cover exhibition cost . 

[Showster]

My views are as good as anyone's views.

 

I think an invisible hand is supporting the level. Categories (A, B and E) seem to be equilibrating downwards until there is more certainty in the economy.

 

More volatility ahead in terms of price movements. I see see-saw.

 

What's your take on the general COE trend? Esp Cat B

 

[Limwsv]

Bro @Limwsv, I share your preference.

 

To understand the objections, just think of this.

 

In the area of car ownership and use, do Singaporeans like to pay and consume, or to not pay and not consume (pay-s-you-use)? If it is the latter, they could always have chosen not to own car.

 

Like Edwin15 mentioned, the worst case is pay (high COE) and cannot consume (due to high usage costs).

 

I just don't understand why everyone keeps going back to the HIGH COE/ HIGH operating cost.  As I keep repeating myself, COE numbers will be liberalized, so there will be as many COE as needed.  LTA will slowly liberalize the COE numbers during 2019 - 2025 period to go for a soft landing in COE prices.

 

So,

2018 - 100K COE scrap and made available

2019 - 40K COE is suppose to be scrapped, instead LTA releases 80K COE to avert sharp reverse in COE prices.  NextGen ERP will be implemented for CBD and Orchard before 2019 to prevent congestion due to the extra 40K COE suddenly made available

2020 - 20K COE is suppose to be scrapped, instead LTA maintains 80K COE.  NextGen ERP implements to Tier II congestion areas like regional town centres and major arteries.

 

If it's execute this way, why would COE shoot back up?  And congestion would be avoided.  And all the frogs will be slowly boiled if LTA correctly communicated the plan early and upfront so everyone can plan ahead with 1 to 2 years buffer.

[Forte3737]

The ADs already priced their cars @ $55K. question s what did the big boys budded? They could have bidded a couple of thousands below the $51K. So basically they gain la. Extra margins

How to gain if they bid a few thousand below 51k? Please enlighten

[Limwsv]

When planning policies, test cases will be setup to evaluated the impact of any decisions and weigh the consequences of a course of action.

 

Let's take a test case:

Benjamin Wong and Chloe Wong are newly weds with their marriage just into the 2nd year.  Benjamin is in his early thirties and has slowly move up the career path.  They have prudently bought a HDB flat near a MRT station in a new town.  However, their savings are almost depleted due to

1. Down payments for the flat

2. Renovation cost

3. Wedding cost

 

Chloe Wong is also working but she is almost near thirties and the thoughts of motherhood looms near.  

 

Both of them are replenishing their savings to prepare for children, so both to them utilize public transportation to travel to work.

 

Chloe Wong happily announce to Benjamin that they are going to have a new addition to the family.

 

Fast forward to 9 months down the road.  Chloe woke up 4 am in the morning.  Her water bag has broken and urgently needs to go to the maternity ward.  

 

Scenario (A) COE prices are high => car prices are high.  They could not afford to buy a car, so their only recourse is to call for a cab waiting for about 15 minutes for the cab to respond.

 

Scenario (B) COE prices are low +> car prices are low.  However due to high ERP charges and parking charges at work, they don't ever use the car except to go to Malaysia or to do grocery.  

However, this is the time when the utility of a car is at its highest as the couple urgently need to get to the hospital.  Benjamin drives his wife to the ward and healthy baby is delivered to the happy couple an hour later.

[edwin15]

I just don't understand why everyone keeps going back to the HIGH COE/ HIGH operating cost.  As I keep repeating myself, COE numbers will be liberalized, so there will be as many COE as needed.  LTA will slowly liberalize the COE numbers during 2019 - 2025 period to go for a soft landing in COE prices.

 

 

 

High COE/ High Operating cost is due to the 10 year lag when you buy your car and the policy implementation to usage base.

 

Eg, If I buy car now at 50k COE but government decided to implement usage based model say in 2019. COE at that time might be $1 but it doesn't matter to me as I had already paid 50k for my COE.

 

However, I will be stuffed with high usage costs and high COE.

 

So if there is policy change, there will definitely be people caught with high COE and high usage cost due to this lag.

[Kar_lover]

Actually I do not like the idea of consumption base.

 

Will really feel Scr*wed in this case as a driver. Own car but cannot use.

 

I rather you get charged for the car and then you can use it freely. 

 

Its not about what we *prefer*. It's about what is a more effective and/or fairer way to control/manage congestion.