how to solve COE volatility? Gov doing the pricing

[Jamesc]

E class, 5 series etc are a luxury we cannot afford if we want to save our planet.

Keep buying them and we will be having 50 degrees C temperatures everyday.

[Volvobrick]

2 minutes ago, inlinesix said:

Those around $21k - $22k.  Possible.

You think custom will allow it meh?

 

https://www.sgcarmart.com/used_cars/info.php?ID=1061859&DL=3766

 

[Jamesc]

If we want Cat B cars COE should be at least 300k

[Carbon82]

1 hour ago, Wind30 said:

? what is your intention? my intention is to lower fluctuations, not reduce the COE price.

Yes, we are looking at different perspectives, but the end results will be be quite similar amd here's why I think so. 

With the current high low cycle (typically high in 2011 - 2013, 2021 to 2023, low in 2006 - 2008, 2016 - 2018, etc.), many owners of car with high COE premium will likely deregistered their ride prematurely when COE premium drop substantially, which will resulted in lesser COE available in the next round of high COE cycle (further worsening the imbalance in quota allocation from year to year). 

On the other hand, iIf COE premium could remain relatively constant (say within $20K+/-), there will be less incentive for those with high COE car to scrap their ride for a new one, then we can relook into the redistribution of quota. 

[Jtis]

1 hour ago, Watwheels said:

MAS just have to up the restriction on car loan. 50% deposit 50% loan, loan interest rate 5%. Remove the overtrade BS. If coe prices still high, up the deposit % and up the car loan interest rate. If the loan do not get more restricted coe prices will only skyrocket.

Problem isnt coe. It is also about how much loan ppl can take to buy car. Coe and loan structure go hand in hand. No point keep tweaking the coe but ppl still be able to take huge loan to buy car.

Ppl are too short sighted, always focusing on coe. Step back and look at the bigger picture.

I agree. The increases in COE prices are likely fuelled by availability of loans to pay for it. When spread out over a long loan tenure, the impact of high COE prices is greatly diffused. A difference in COE price of $30k can be just a low few hundred dollars monthly. 

By curbing loans, eg. excluding COE from loans, or reducing loan percentage allowed, that should cool the demand. At least that should be the case for mass market cars. The really rich can always afford regardless, can only just thank them for their contribution to nation building.

[inlinesix]

10 minutes ago, Volvobrick said:

https://www.sgcarmart.com/used_cars/info.php?ID=1061859&DL=3766

 

This 1 has 30k surcharge.  In addition, I think COE for this car starts from 2019 rather than 2022.

The same rule can be applied

Edited August 2, 2022 by inlinesix

[shrjun]

12 minutes ago, Jamesc said:

E class, 5 series etc are a luxury we cannot afford if we want to save our planet.

Keep buying them and we will be having 50 degrees C temperatures everyday.

Put aircon 16c.

[Wind30]

9 minutes ago, Carbon82 said:

Yes, we are looking at different perspectives, but the end results will be be quite similar amd here's why I think so. 

With the current high low cycle (typically high in 2011 - 2013, 2021 to 2023, low in 2006 - 2008, 2016 - 2018, etc.), many owners of car with high COE premium will likely deregistered their ride prematurely when COE premium drop substantially, which will resulted in lesser COE available in the next round of high COE cycle (further worsening the imbalance in quota allocation from year to year). 

On the other hand, iIf COE premium could remain relatively constant (say within $20K+/-), there will be less incentive for those with high COE car to scrap their ride for a new one, then we can relook into the redistribution of quota. 

My policy don’t have to sell all COEs in a Low cycle… that is what the reserve pool is for.  It is to even out the supply fluctuations 

[Volvobrick]

14 minutes ago, Jtis said:

I agree. The increases in COE prices are likely fuelled by availability of loans to pay for it. When spread out over a long loan tenure, the impact of high COE prices is greatly diffused. A difference in COE price of $30k can be just a low few hundred dollars monthly. 

By curbing loans, eg. excluding COE from loans, or reducing loan percentage allowed, that should cool the demand. At least that should be the case for mass market cars. The really rich can always afford regardless, can only just thank them for their contribution to nation building.

Curbing loans everyone not happy - Gahmen less income, banks less business, dealers mark up less, lower income buyers cannot afford to buy that nice new car.

 

Except full cash rich buyers buying at cheap cheap price.

So who in gahmen so stupid would go and do things that make everyone unhappy? And lesser bonus for him/her too due to less tax collected.

 

 

[Vratenza]

1 hour ago, Volvobrick said:

ARF is already tiered to tax more on cars with higher OMVs up to 180% I think. 

Tax on tax lor.....nothing our MIW is incapapble of as long as money keeps rolling in... they can call it tariff/rebate/certificate....end of the day it is still taxing the people....and all the money goes into the same pool right?

 

[Fitmugen]

9 minutes ago, Wind30 said:

My policy don’t have to sell all COEs in a Low cycle… that is what the reserve pool is for.  It is to even out the supply fluctuations 

Yes. This will be implemented when the low cycle comes.

so don’t hope for 30k COE. Gahmen probably is aiming for around 60-80k COE as a stable range

[Ingenius]

48 minutes ago, Rickster said:

Exactly. That's why in my previous post, i mentioned the govt deliberately turned a blind eye to this.

So people who are not financially sound and yet thinks they really need a car, they can take out a 100% loan and buy a used COE car. I think the installment is just a few hundred bucks per month.

The 100% loan is for registered company and car is for commercial use, it's not for anyone strictly speaking. Also, buyer have to undergo credit check to meet affordability criteria. 

[Ingenius]

1 hour ago, mikk123 said:

I tell you why. They should collect more from the rich and lesser from the average people out there. Why?  because the rich is getting richer and average is not really keeping up, and there are a lot of NEW rich coming in to share the pie. The system is no longer a fair competition system. Some who can afford a Ferrari bid against someone who wants to buy a Toyota? Is this a fair competition game here?  

You are proposing a communist system.  In this world, nothing is fair, from the day one is born.  Asking for fairness is only for losers.

The government is already taxing the rich much much more than the less well off.  Take for instance income tax, the poor doesnt pay any at all, while the high earners pay a lot.  And when come to subsidies and payouts, you know whats the arrangement.

The government's job is to create an environment where people have a fair chance of achieving success through meritocracy, and there are many people who achieves success through it.  But not through being given for free in the name of fair competition, and certainly not for luxury goods.

Edited August 2, 2022 by Ingenius

[Jamesc]

Don't sell COEs in a Low cycle?

Then how to get 30 - 40k COEs?

Sounds like this policy is to only have

at least $100k COEs or more.

Please don't implement.

[Mrmilktooth]

3 hours ago, Fitvip said:

I propose fixed bid submission. Each individual is entitled to submit only one bid. Once submitted, no amendment is allowed. Bidding premiums should not be shown live. At most, show only the number of bids received.

This method will create uneven income streams from successful coe bids. Fluctuation is too high…

 

the correct way in theory should still be let market forces decide.. 😑 

[Macrosszero]

Let's get a few things out of the way:

- LTA is currently committed to a zero growth policy.

- The supply of COE is not constant because of variable quotas in the past

- Deregistrations can only be projected so far (expiry at 5/10 year mark), you cannot predict early deregistrations, renewals for 10 year COEs, etc.

While LTA can and has reduced the lag effect to better iron out fluctuations, there are factors it cannot predict:

1. Economic conditions. You would think bad times COE low good times COE high, but the economy is struggling to get out of COVID and gets knocked back down by Ukraine war, and yet still COE is bouyant. Why? It may have been crypto, it might be big corporate entities buying up fleets. Who can predict?

2. Buyer behaviour. As much as they try to promote car-lite and pour billions into mass public transport infrastructure, it has not lessened demand. Anytime the COE isn't $1, there are more people who want a COE than there are COE available. 

3. COE is still the neatest method of means-testing. If you can afford it, great. If you can't afford it and you still want it, you gotta make sacrifices. By thinking up all sorts of schemes to subsidize COE or to stabilize supply fluctuations only makes it more like a tax and we already have plenty of those for cars alone. If everyone in Singapore who can afford a car at its true cost gets to own one, Singapore will simply be one giant carpark.

Other ideas like bid your own COE, control the maximum loan and loan tenure have all been carefully tweaked to ensure the banks have some loans to give and yet enough of the buyers don't terribly exceed their TDSR and default on their debt. There's obviously loophole exploits, but it seems the G is happy to keep the problem small without spending disproportionate amounts of time and effort "solving" it. 

Just like COE. Does it need "solving"?

Its just like any other commodity. If you can afford, you buy. If you can't you save up or you make do without. 

[Lotr]

3 hours ago, shrjun said:

The big G doesn't think that the COE price is a problem.

We can discuss the many ways to cut down price till the cows come home with no change expected from the current system.

For one I do not understand how 500 bidders can get the COE to $110K . Why not $1k or why not $1 million 😄.

Because there are many many more bidders at $1k.

If 1 seller  suddenly drop selling price by $100k, the showroom will be throng with buyers. But can they get the coe? Cannot, as the seller will be bidding only $1k

Edited August 2, 2022 by Lotr

[Ingenius]

11 minutes ago, Macrosszero said:

Let's get a few things out of the way:

- LTA is currently committed to a zero growth policy.

- The supply of COE is not constant because of variable quotas in the past

- Deregistrations can only be projected so far (expiry at 5/10 year mark), you cannot predict early deregistrations, renewals for 10 year COEs, etc.

While LTA can and has reduced the lag effect to better iron out fluctuations, there are factors it cannot predict:

1. Economic conditions. You would think bad times COE low good times COE high, but the economy is struggling to get out of COVID and gets knocked back down by Ukraine war, and yet still COE is bouyant. Why? It may have been crypto, it might be big corporate entities buying up fleets. Who can predict?

2. Buyer behaviour. As much as they try to promote car-lite and pour billions into mass public transport infrastructure, it has not lessened demand. Anytime the COE isn't $1, there are more people who want a COE than there are COE available. 

3. COE is still the neatest method of means-testing. If you can afford it, great. If you can't afford it and you still want it, you gotta make sacrifices. By thinking up all sorts of schemes to subsidize COE or to stabilize supply fluctuations only makes it more like a tax and we already have plenty of those for cars alone. If everyone in Singapore who can afford a car at its true cost gets to own one, Singapore will simply be one giant carpark.

Other ideas like bid your own COE, control the maximum loan and loan tenure have all been carefully tweaked to ensure the banks have some loans to give and yet enough of the buyers don't terribly exceed their TDSR and default on their debt. There's obviously loophole exploits, but it seems the G is happy to keep the problem small without spending disproportionate amounts of time and effort "solving" it. 

Just like COE. Does it need "solving"?

Its just like any other commodity. If you can afford, you buy. If you can't you save up or you make do without. 

Very well said.