VES 2018

[Solar]

Don't worry. U can be sure LTA will change the rules again if the ''environmental' reason doesn't result in higher tax for every car

Months ago some smart dude signed some international agreement to support green effort or something right?

 

Was actually expecting this kind of pattern to come

[Solar]

Yes and no.

 

If it's really a emissions issue, promoting electric vehicles would be the answer, but you need to invest in infrastructure like charging stations and drastically reduce taxes on electric vehicles to equalize the cost vs internal combustion vehicles.

 

None of which the govt is doing in a commercially meaningful way.

 

And hard to see how massively increasing the cost of a Prius is helping in that regards either.

 

So it's a thinly (and not very well) disguised tax increase that is levied under the pretense of pollution reduction.

 

And with all due respect, your propagating that fiction of pollution reduction does not help expand the discussion in a meaningful manner.

I do see the pattern..

Like punggol and sengkang. People that moved in had to live with the lack of infrastructure and amenities for years before they gam wan start to do something.

If I don't recall wrongly, the mini star back then said need to have the mass first.

 

Well, it penalised early adopters.

 

Similarly this is likely the case.

 

Of course, some didn't work out, like CNG.

Early adopters have to risk it loh.

 

Maybe one day they find electric cars cause cancer then they'll think walan Heng haven't invested charging stations islandwide yet

i won't be surprised coe crash on Jan 1st bidding

Then tighten further loh..

Car lite is 'working'.. Go from 0 to -0.25 growth.

Coe won't be cheap from now on

Edited November 12, 2017 by Solar

[Kia7200]

that's why when VES kicks in COE will drop further.

Actually the Ves increase for some cars r not that high. So if coe drop 10k plus, then maybe it's a good deal after all

 

And some more get those smaller cars might be even cheaper

[Soya]

Months ago some smart dude signed some international agreement to support green effort or something right?

 

Was actually expecting this kind of pattern to come

I hv no problem in supporting the environment.

 

But the way this VES thingy is being rolled out leaves a lot to desired. Half baked info in drips and drabs. Public guessing away. Dealers using scare buying tactics. And we are getting unverified VES surcharge info from PIs instead.....*shakehead*

[merc280v6]

They don't like small turbo car?lol...

On the contrary, No.

 

It is found that the emission levels of NOx, CO, and CO2 are higher in terms of their concentration in the exhaust fume of the turbocharged engine, in comparison with the naturally aspirated engine

 

http://www.sciencedirect.com/science/article/pii/S1110016817300960

 

That's why, from LTA's initial briefs, small-capacity, NA engines with multi-point injection (MPI), appear to enjoy the highest VES rebates!

[pi3142]

All new PI cars registered after September 2017 need to be tested and certified Euro 6 compliant at an emssion test lab, which will give an emission report. With these emissions reports and the VES guidelines released so far, the PIs know the VES rebates or penalties of the cars for this coming 2018. The knowledge is not absolute because of test data variations and changes in LTA regulations.

[fwm]

Was wondering will VES also affect used car market?

[andrewyewkc]

Don't worry. U can be sure LTA will change the rules again if the ''environmental' reason doesn't result in higher tax for every car

Haha, CEVS, VES next will be EVS or ESV or SEV and will include water vapour.

Maybe we'll hear another famous statement soon....? LOL

 

Haha, they can always announce -0.25% "car growth" and pronounce that COE prices won't be significantly impacted.

[Kia7200]

Was wondering will VES also affect used car market?

Used car dealer will usually priced their used car abt 1k+ yrly dep more than new car

 

 

But this Ves is quite diff. Last time is give discount to cars, now is impose tax to cars that don't meet their standard n discount to those who met.

 

So car price diff will be even widen which will encourage ppl to buy Ves rebate cars

 

Example

Altis 120k

Jazz 85k

 

Which one u choose

[Liuels]

I would say, the trend is clearly towarding for plug-in-hybrid. because nox etc would be halved  for plug-in-hybrid according to LTA formula. And as we don't have enough charging facilities, plug-in-hybrid can still drives like a normal petrol car, this is a huge plus

[andrewyewkc]

Was wondering will VES also affect used car market?

Certain cars like the Subaru FXT will be slapped with a 20k VES. To even buy one now you would need to indent.

So it is likely that the resale price of those cars models with high VES may see an increase in price. 

[mycar1234]

Let me try to paint the whole picture for you...

 

When a AD sells a car, they set a certain profit margin for the car. The sell price of the car to make that margin would be dependent on the Rebate/Surcharge taxes the car is subject to.

 

To appreciate the whole cost picture, please see the attached table I put together for KIA Niro. For scenario 1, all the cost figures are taken from LTA website.

 

https://www.onemotoring.com.sg/content/onemotoring/en/lta_information_guidelines/buy_a_new_vehicle/car_cost/_jcr_content/main_par/download/file.res/Car_Cost_Update.pdf

 

If you look at the table, Cycle & Carriage (CC) buys the car at $27K and sets to make a profit of $29K at a sell price of $118K. The rest (GST+Excise+ARF+Regn Tax+COE = $61.8K) goes to the Govt.

 

Let now assume and say that KIA does not enjoy the CEV Rebate as highlighted in Scenario 2. Essentially, the ARF will now be $30K (up from $5K). And CC does not earn the difference in ARF. They go to the Govt's pocket. Now for CC to maintain the same profit margin of $29K, the sell price will now need to be set at S143K...

 

Does a AD fully pass the Rebate to the customer? Looks like it, Take the latest price list of Mazda 2 (see attached). The Mazda 2 under the CEV is $5K rebate. But come 2018 under the VES, the Mazda 2 will enjoy $10K rebate. If you look at the price list, the additional $5K rebate is passed to the customer since they subtracted it from the sell-price.

 

Car Scrap value - The car scrap value is not because of the result that the AD did not pass the full rebate to the customer. In the case of KIA Niro, the effective ARF is $5K after enjoying the CEV rebate. As such, a $5K ARF would only entitle a $2.5K scrap value.

 

Hope this helps...

AD profit margin is extremely

[therock]

I wonder why we are always up in arms about the profit margin of car dealers?

Just because the COE is high and a car costs a lot, does it mean that we expect the dealer to make a loss or do charity?

Then when we bring our cars in for servicing, don't blame them if they refuse to do part replacements or repair that rattle in the cabin when they have no fat...

Free service, free parts, 10 year warranty and no profit margin?

It's hard to be in the auto business..

 

On the other hand, an iPhone costs under 300 USD to make and sells for thrice that. No one bats an eyelid and there are long queues for it.

 

A condo has a markup too, and likewise, an Armani suit costs a lot more than the materials it's made of, but we don't mind paying. Don't get me started on diamonds... 

[Apple-Tree]

Hmmm ........ it is like selling a $1M condo for $1.8M lor ....

 

Of course, you can also say, there is no economic of scale lor.

 

 

I wonder why we are always up in arms about the profit margin of car dealers?

Just because the COE is high and a car costs a lot, does it mean that we expect the dealer to make a loss or do charity?

Then when we bring our cars in for servicing, don't blame them if they refuse to do part replacements or repair that rattle in the cabin when they have no fat...

Free service, free parts, 10 year warranty and no profit margin?

It's hard to be in the auto business..

 

On the other hand, an iPhone costs under 300 USD to make and sells for thrice that. No one bats an eyelid and there are long queues for it.

 

A condo has a markup too, and likewise, an Armani suit costs a lot more than the materials it's made of, but we don't mind paying. Don't get me started on diamonds... 

 

[merc280v6]

Was wondering will VES also affect used car market?

Perhaps not used cars < 10 years old that are still in circulation - as these will probably be grandfathered (i.e., not affected).

 

But I suspect those who will be renewing COEs for their old, 10-yr old (mostly, more-pollutive) cars, will have to pay extra VES tax kow kow, in order to extend their usage.

 

I think it's absolutely fair, for those using the COE renewal route, to circumvent having to pay more to buy new cars.

Edited November 12, 2017 by merc280v6

[Enye]

I wonder why we are always up in arms about the profit margin of car dealers?

Just because the COE is high and a car costs a lot, does it mean that we expect the dealer to make a loss or do charity?

Then when we bring our cars in for servicing, don't blame them if they refuse to do part replacements or repair that rattle in the cabin when they have no fat...

Free service, free parts, 10 year warranty and no profit margin?

It's hard to be in the auto business..

 

On the other hand, an iPhone costs under 300 USD to make and sells for thrice that. No one bats an eyelid and there are long queues for it.

 

A condo has a markup too, and likewise, an Armani suit costs a lot more than the materials it's made of, but we don't mind paying. Don't get me started on diamonds...

you missed the whole point

 

it’s not the absolute margin but the %

 

a distributor earning more than the manufacturer for every car they sell?

 

who wants to be a manufacturer then?

 

 

[Showster]

Moving house is such a pain mah...

 

Choosing where and when to live (based on the analysis of price, opportunity costs, specific benefits of location, tailormaking to one's plans etc etc) is sometimes not an easy decision.

 

Kind of optimal (or even stuck) here for a while more.

 

I mostly use aircon plus powerful particulate filter to compensate for the so-called pollution.

 

 

 

you big time property investor holding on to multiple properties, but chose to live beside a heavily used road then support ah gong to increase taxes so that you can enjoy better air?

cars go electric but all those diesel buses and trucks are still going to spew pollution hor

Edited November 12, 2017 by Showster

[inlinesix]

Ah jib kor very good le.

 

Malaysian fren bought X5 PHEV got RM 200k tax break.

 

Looks like Ah jib kor more enviro friendly than Ah Long le