Jump to content

Waiting for used car prices to drop? Not anytime soon, according to Straits Times


Recommended Posts

Internal Moderator

SINGAPORE - Consumers hoping for used car bargains will likely have to wait longer to see prices easing.

While used car prices have been rising along with certificate of entitlement (COE) premiums, industry players say there are early signs of the market weakening after large car COEs breached the $100,000 mark in June. However, dealers are unwilling to drop prices on cars they had bought when the market price was high.

Dealers said they have been offering higher prices to buy over used cars as the supply of used cars from new car trade-ins falls. This, in turn, translates into higher resale prices, which benefits sellers.

Depreciation value reflects the basic cost of owning a car when comparing its purchase price with what it is worth at the end of its COE lifespan.

In June this year, an owner of a 2018 Volkswagen Golf was offered $5,800 more than what the car was worth just three months ago by dealers on Quotz, an online bidding platform.

The biggest source of used cars are trade-ins that come with new car purchases. But dealers have been going directly to owners to source for used cars, as new car registrations have fallen significantly during the current period of tight COE supply.

In the first six months of 2022, there were 16,567 new car registrations, down 35.7 per cent from the 25,777 registrations seen in the same period in 2021.

While fewer new cars were sold, used car transactions have been stable, with 47,480 recorded in the first six months of this year, a 1.4 per cent dip from the 48,173 seen in 2021.

Since January, used cars have been selling faster than they did a year ago. At a major used car dealership, it takes less than 30 days for a car to leave its lot. In 2021, the average duration was 60 days. This suggests that more consumers are shifting to the used car market as new cars become increasingly more expensive due to rising COE prices.

Dealers seem more hesitant to make higher offers for used cars as COE premiums continue to rise. Dealers are also concerned about whether buyers would be able to accept the higher used car prices. They are also wary of the risk of being caught with overly expensive cars, should COE premiums fall.

This is a likely explanation for the stock situation at Sgcarmart, which is the most established player among online used car marketplaces, with more than a thousand dealers. On average, 7,000 to 8,000 used car listings are added to the portal monthly. However, its spokesman said the overall stock of cars has come down slightly since June. That is to say, its dealers are not replenishing their stock of cars as quickly as they are sold.

Mr Raymond Tang, honorary secretary of the Singapore Vehicle Traders Association, said dealers may be becoming more selective about the cars they want to sell and how much they are willing to pay for them, following a rush for stock to meet strong demand in the earlier part of the year.

https://www.straitstimes.com/singapore/transport/used-car-prices-expected-to-stay-high-for-the-rest-of-2022

Used values of some car models may have also become too inflated to be resold easily, he added. Hence, some dealers are adjusting their valuation when making offers.

Demand may also be starting to taper following record-breaking COE premiums. At the latest tender exercise that ended on July 20, the price of an Open category COE was $114,001 while the category for large cars was priced at $110,003.

A salesman who has been in the trade for more than 20 years said showrooms for used cars at Automobile Megamart in Ubi have been much quieter in recent weekends.

While used car prices rise quickly with new car prices, they tend to lag behind when the opposite happens. Industry watchers say it is unlikely for used car prices to come down in the near future - at least not for a while.

↡ Advertisement
  • Praise 5
  • Haha! 1
Link to post
Share on other sites
6th Gear

Car price won't fall, unless there is big change in 2 years time. Lets make it happen. 

  • Praise 1
  • Haha! 1
Link to post
Share on other sites
Twincharged
(edited)
14 minutes ago, mikk123 said:

Car price won't fall, unless there is big change in 2 years time. Lets make it happen. 

whats happening in 2years? election? if you think changing a govt will make changes to coe, i think you have to be realistic. which govt can let go the revenue that COE brings. even to plug a  drop in coe revenues will be difficult.

IMHO regardless of who is in power, COE is here to stay. maybe it will get tweaked, but in the end got money wins.... there will never be anything that will be fair.

Edited by Mkl22
  • Praise 11
Link to post
Share on other sites
Twincharged
12 minutes ago, Mkl22 said:

whats happening in 2years? election? if you think changing a govt will make changes to coe, i think you have to be realistic. which govt can let go the revenue that COE brings. even to plug a  drop in coe revenues will be difficult.

IMHO regardless of who is in power, COE is here to stay. maybe it will get tweaked, but in the end got money wins.... there will never be anything that will be fair.

nobody will kill the goose laying solid platinum eggs :a-toast:

  • Praise 5
Link to post
Share on other sites
Turbocharged
(edited)
39 minutes ago, mikk123 said:

Car price won't fall, unless there is big change in 2 years time. Lets make it happen. 

Changing the government won't change the fact that land is scarce in Singapore, and some form of car population control needs to be in place, the alternative is very bad traffic jam like kl and Bangkok. 

And government revenue needs to finance other ministries which are cost centre, like education, medical, defense and many others. Coe is one of the revenue channel. 

It's not so simple as making everything cheap and affordable for everything to everyone and expect no price to pay. 

Edited by Ingenius
  • Praise 5
Link to post
Share on other sites
Turbocharged
19 minutes ago, Ingenius said:

Changing the government won't change the fact that land is scarce in Singapore, and some form of car population control needs to be in place, the alternative is very bad traffic jam like kl and Bangkok. 

And government revenue needs to finance other ministries which are cost centre, like education, medical, defense and many others. Coe is one of the revenue channel. 

It's not so simple as making everything cheap and affordable for everything to everyone and expect no price to pay. 

More importantly, ICE will be replaced with EV. Where will HDB start to work on the infra setup

  • Praise 2
Link to post
Share on other sites

Supersonic
1 minute ago, Sdf4786k said:

More importantly, ICE will be replaced with EV. Where will HDB start to work on the infra setup

U all really think general public users' ICE will be replaced by EV meh? wait long long, 3-5k road tax leh. 
At most hybrid/PHEV nia.

  • Praise 8
Link to post
Share on other sites
Twincharged
59 minutes ago, mikk123 said:

Car price won't fall, unless there is big change in 2 years time. Lets make it happen. 

Looking at larger picture, the macro country economy  is more than car price alone, changing the government  alone may not bring down the car price, ebenmif it does, there are other price to oay for. The question  is what else can be done and who esle  can do what. 

  • Praise 1
Link to post
Share on other sites
Supersonic
Just now, Ct3833 said:

Looking at larger picture, the macro country economy  is more than car price alone, changing the government  alone may not bring down the car price, ebenmif it does, there are other price to oay for. The question  is what else can be done and who esle  can do what. 

u die, i die, everybuddy die, COE still around. 

  • Praise 1
  • Haha! 10
Link to post
Share on other sites
Turbocharged
3 minutes ago, Mockngbrd said:

u die, i die, everybuddy die, COE still around. 

So romantic.. macham titanic with Jack.

  • Haha! 1
Link to post
Share on other sites
Turbocharged
(edited)
7 minutes ago, Mockngbrd said:

U all really think general public users' ICE will be replaced by EV meh? wait long long, 3-5k road tax leh. 
At most hybrid/PHEV nia.

Just pump the tax to make it attractive to replace.. if hike the tax x 1.5 for ICE, many would be “persuades “ to go EV

like what u mention .. will replaced meh .. but the real question is how to align the unified thoughts of everyone to go renewable n change

Edited by Sdf4786k
Link to post
Share on other sites
Twincharged
6 minutes ago, Mockngbrd said:

u die, i die, everybuddy die, COE still around. 

Agree. Necessary evil to manage vehicle population and a good way for the government to make money. I am sure many countries wanted to kopi this model but mo one dares to do it fearing they will lose the next election🤣

  • Praise 2
Link to post
Share on other sites
Twincharged
(edited)
1 hour ago, BabyBlade said:

SINGAPORE - Consumers hoping for used car bargains will likely have to wait longer to see prices easing.

While used car prices have been rising along with certificate of entitlement (COE) premiums, industry players say there are early signs of the market weakening after large car COEs breached the $100,000 mark in June. However, dealers are unwilling to drop prices on cars they had bought when the market price was high.

Dealers said they have been offering higher prices to buy over used cars as the supply of used cars from new car trade-ins falls. This, in turn, translates into higher resale prices, which benefits sellers.

Depreciation value reflects the basic cost of owning a car when comparing its purchase price with what it is worth at the end of its COE lifespan.

In June this year, an owner of a 2018 Volkswagen Golf was offered $5,800 more than what the car was worth just three months ago by dealers on Quotz, an online bidding platform.

The biggest source of used cars are trade-ins that come with new car purchases. But dealers have been going directly to owners to source for used cars, as new car registrations have fallen significantly during the current period of tight COE supply.

In the first six months of 2022, there were 16,567 new car registrations, down 35.7 per cent from the 25,777 registrations seen in the same period in 2021.

While fewer new cars were sold, used car transactions have been stable, with 47,480 recorded in the first six months of this year, a 1.4 per cent dip from the 48,173 seen in 2021.

Since January, used cars have been selling faster than they did a year ago. At a major used car dealership, it takes less than 30 days for a car to leave its lot. In 2021, the average duration was 60 days. This suggests that more consumers are shifting to the used car market as new cars become increasingly more expensive due to rising COE prices.

Dealers seem more hesitant to make higher offers for used cars as COE premiums continue to rise. Dealers are also concerned about whether buyers would be able to accept the higher used car prices. They are also wary of the risk of being caught with overly expensive cars, should COE premiums fall.

This is a likely explanation for the stock situation at Sgcarmart, which is the most established player among online used car marketplaces, with more than a thousand dealers. On average, 7,000 to 8,000 used car listings are added to the portal monthly. However, its spokesman said the overall stock of cars has come down slightly since June. That is to say, its dealers are not replenishing their stock of cars as quickly as they are sold.

Mr Raymond Tang, honorary secretary of the Singapore Vehicle Traders Association, said dealers may be becoming more selective about the cars they want to sell and how much they are willing to pay for them, following a rush for stock to meet strong demand in the earlier part of the year.

https://www.straitstimes.com/singapore/transport/used-car-prices-expected-to-stay-high-for-the-rest-of-2022

Used values of some car models may have also become too inflated to be resold easily, he added. Hence, some dealers are adjusting their valuation when making offers.

Demand may also be starting to taper following record-breaking COE premiums. At the latest tender exercise that ended on July 20, the price of an Open category COE was $114,001 while the category for large cars was priced at $110,003.

A salesman who has been in the trade for more than 20 years said showrooms for used cars at Automobile Megamart in Ubi have been much quieter in recent weekends.

While used car prices rise quickly with new car prices, they tend to lag behind when the opposite happens. Industry watchers say it is unlikely for used car prices to come down in the near future - at least not for a while.

Used car prices will drop only when COE prices drop and new car pricese drop, just wait for a few years, if LTA does not do major tweak to the system, prices should drop, otherwise, 80k to 100k may be the new low🤣

Edited by Ct3833
Link to post
Share on other sites
Supersonic
10 minutes ago, Ct3833 said:

Used car prices will drop only when COE prices drop and new car pricese drop, just wait for a few years, if LTA does not do major tweak to the system, prices should drop, otherwise, 80k to 100k may be the new low🤣

I no study much, so i do not understand why used car price follow on coe pricing? If coe go up, used car price go up? I find no logic le? Esp when the used car dealer bought their used car on low price or before coe price went up?

  • Praise 1
Link to post
Share on other sites
3rd Gear
1 hour ago, BabyBlade said:

SINGAPORE - Consumers hoping for used car bargains will likely have to wait longer to see prices easing.

While used car prices have been rising along with certificate of entitlement (COE) premiums, industry players say there are early signs of the market weakening after large car COEs breached the $100,000 mark in June. However, dealers are unwilling to drop prices on cars they had bought when the market price was high.

Dealers said they have been offering higher prices to buy over used cars as the supply of used cars from new car trade-ins falls. This, in turn, translates into higher resale prices, which benefits sellers.

Depreciation value reflects the basic cost of owning a car when comparing its purchase price with what it is worth at the end of its COE lifespan.

In June this year, an owner of a 2018 Volkswagen Golf was offered $5,800 more than what the car was worth just three months ago by dealers on Quotz, an online bidding platform.

The biggest source of used cars are trade-ins that come with new car purchases. But dealers have been going directly to owners to source for used cars, as new car registrations have fallen significantly during the current period of tight COE supply.

In the first six months of 2022, there were 16,567 new car registrations, down 35.7 per cent from the 25,777 registrations seen in the same period in 2021.

While fewer new cars were sold, used car transactions have been stable, with 47,480 recorded in the first six months of this year, a 1.4 per cent dip from the 48,173 seen in 2021.

Since January, used cars have been selling faster than they did a year ago. At a major used car dealership, it takes less than 30 days for a car to leave its lot. In 2021, the average duration was 60 days. This suggests that more consumers are shifting to the used car market as new cars become increasingly more expensive due to rising COE prices.

Dealers seem more hesitant to make higher offers for used cars as COE premiums continue to rise. Dealers are also concerned about whether buyers would be able to accept the higher used car prices. They are also wary of the risk of being caught with overly expensive cars, should COE premiums fall.

This is a likely explanation for the stock situation at Sgcarmart, which is the most established player among online used car marketplaces, with more than a thousand dealers. On average, 7,000 to 8,000 used car listings are added to the portal monthly. However, its spokesman said the overall stock of cars has come down slightly since June. That is to say, its dealers are not replenishing their stock of cars as quickly as they are sold.

Mr Raymond Tang, honorary secretary of the Singapore Vehicle Traders Association, said dealers may be becoming more selective about the cars they want to sell and how much they are willing to pay for them, following a rush for stock to meet strong demand in the earlier part of the year.

https://www.straitstimes.com/singapore/transport/used-car-prices-expected-to-stay-high-for-the-rest-of-2022

Used values of some car models may have also become too inflated to be resold easily, he added. Hence, some dealers are adjusting their valuation when making offers.

Demand may also be starting to taper following record-breaking COE premiums. At the latest tender exercise that ended on July 20, the price of an Open category COE was $114,001 while the category for large cars was priced at $110,003.

A salesman who has been in the trade for more than 20 years said showrooms for used cars at Automobile Megamart in Ubi have been much quieter in recent weekends.

While used car prices rise quickly with new car prices, they tend to lag behind when the opposite happens. Industry watchers say it is unlikely for used car prices to come down in the near future - at least not for a while.

Goddess Babyblade.

Is what I tell people about used car mkt in sgp. The new and used are in cahoots.

Get new and dont think about used...unless its about the bucket list.

Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...