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Ct3833

Why more people are renewing COE?

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Posted (edited)

As we know more people are renewing COE. My point is not about more people are renewing COE because COE are cheaper or it makes better sense to renew COE. My comparison is more than 10 years ago, we dont see that amount of COE revalidations. So why ? My own assumptions are as follows:

1. Price gap of new car price and renewing COE too big.

2. New car price has VES, 15 years ago there was no VES.

3. Parf is 50% of ARF now, last time was 55%, making it more expensive to write off PARF.

4. Higher dealer margin. For example, dealers make about $20k per car from a B to B car like altis, premium car even more. I dont see the same margin years ago.

5. income did not catch up with inflation , relatively, people becomes poorer against new car price ?

 

So when all adds up, higher new car price against cheaper PARF making renewing COE an attractive option?

 

Please share your thoughts. Once we have the answer, I will ask transport minister to plug the hole.

Haha.

Edited by Ct3833
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All your above seems correct and logical.

 

6. Some of the cars renewed are for grab or gojek I assume.

 

7. Most of these Coe cars are Japanese or Koreans which has proven their durability so far and thus good for renewal of COE.

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I think it's not that complicated.

There was a time, when people didn't think COE will hit 90K. But it did.
There was a time, when cars were not so reliable. So it was.

Cars in the last 10 years have improved tremendously in terms of general reliability, and now that people have seen COE shoot through the roof, they worry the same will happen again.

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Herd mentality has always exacerbated swings in markets... Sg "kiasu" syndrome guarantees that this will cause COE to swing up now... which then makes it the *rational* thing to do to beat the market.

 

Well proven stock mkt observation: whats rational at individual level leads to systemicly irrational outcomes

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Posted (edited)

4. Higher dealer margin. For example, dealers make about $20k per car from a B to B car like altis, premium car even more. I dont see the same margin years ago.

 

 

 

How did u come out with 20k margin for a altis??? 

 

 

10yrs ago, COE cheap, 5k 6k 7k only. How to compare with today?

 

Decade back, even cleaner washing toilet also can afford new car OPC scheme, china brands.

Edited by cmcex
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How did u come out with 20k margin for a altis??? 

 

find on lta website for the pdf file indicating cost of sales and number of vehicles sold. 

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find on lta website for the pdf file indicating cost of sales and number of vehicles sold. 

 

Did he mean new car or used car? AD profits?

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Did he mean new car or used car? AD profits?

I am referring to new car.
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Posted (edited)

 

 

7. Most of these Coe cars are Japanese or Koreans which has proven their durability so far and thus good for renewal of COE.

 

I can say this?

 

DONT BLUFF!!! in 2009, i export cars like nobody business, all say 3 yrs already car will start to have problem. Durability and reliability thrown out of window when COE is cheap... Its always the case. 2009 cheap coe and can loan 120% what u think? Suddenly car all have problems after warranty expires.

 

Suddenly now, cars can be so lasting... bcos now can only loan 70% max and COE is expensive. Its never about the car, its all about the loan and COE

Edited by cmcex
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some cars are collectibles, hence COEs are renewed.

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How did u come out with 20k margin for a altis???

 

 

10yrs ago, COE cheap, 5k 6k 7k only. How to compare with today?

 

Decade back, even cleaner washing toilet also can afford new car OPC scheme, china brands.

Think he means just basic cost vs selling price. In the past you could see 10k. Now closer to 20k or more.
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I can say this?

 

DONT BLUFF!!! in 2009, i export cars like nobody business, all say 3 yrs already car will start to have problem. Durability and reliability thrown out of window when COE is cheap... Its always the case. 2009 cheap coe and can loan 120% what u think? Suddenly car all have problems after warranty expires.

 

Suddenly now, cars can be so lasting... bcos now can only loan 70% max and COE is expensive. Its never about the car, its all about the loan and COE

 

I summarize for you.

 

Its not the car

 

Its the MONEY.

 

:grin:

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I believe all is waiting for hybrid vehicle to be affordable and not want to commit so much upfront cash. Once the price is right, they can just scrap and purchase.

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I can say this?

 

DONT BLUFF!!! in 2009, i export cars like nobody business, all say 3 yrs already car will start to have problem. Durability and reliability thrown out of window when COE is cheap... Its always the case. 2009 cheap coe and can loan 120% what u think? Suddenly car all have problems after warranty expires.

 

Suddenly now, cars can be so lasting... bcos now can only loan 70% max and COE is expensive. Its never about the car, its all about the loan and COE

thought new car is pay 40% of car price.........
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Posted (edited)

I believe all is waiting for hybrid vehicle to be affordable and not want to commit so much upfront cash. Once the price is right, they can just scrap and purchase.

your reason is quiet unique, not wrong but I am wondering how many of those who renewed their COE are  because of this reason.

some cars are collectibles, hence COEs are renewed.

this group of people is a constant.  10 yeas ago this number of people, 10 year later today is still about the same number of people. May have increase but wont impact COE renewal rate. 

Edited by Ct3833
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How did u come out with 20k margin for a altis??? 

 

 

10yrs ago, COE cheap, 5k 6k 7k only. How to compare with today?

 

Decade back, even cleaner washing toilet also can afford new car OPC scheme, china brands.

  Current price $97,188 spacer.gif
up_arrow_11x10.gif
    whatisthis_icon_12x12.png Total basic cost $78,510

base on SGcarmart at current COE price, for a basic at 78k cost, they are selling at 97k, so it is 19k, of course there might be discount etc. but the margin in 10 or 15 years ago wanst so high. 

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this group of people is a constant.  10 yeas ago this number of people, 10 year later today is still about the same number of people. May have increase but wont impact COE renewal rate. 

 

this group also contribute to the crunch by renewing early to lock in lower COEs.

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Several reasons why people renew coe instead of buy new cars:-

 

1. More loan restrictions. Can’t take full cost of car. At the same time, loan restrictions elsewhere like property etc means people prefer to spend money there.

 

2. Cars more reliable, more information available online on how to maintain car. Easier access to information on workshops etc.

 

3. New car vs renew coe vs public transport. I must say public transport has improved in terms of network and people perhaps feel it’s either drive existing car or just don’t drive.

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