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how to solve COE volatility? Gov doing the pricing


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Turbocharged
(edited)

I think the more commonly accepted problem of COE if that the price swings too much until it is like lottery as others would say. So what is the solution.

I think instead of a bidding system a pricing system by the government is better but than you have to think about how to control the quantity of COE.

I don't know much about COEs so I am putting this suggestion up for criticism.

1) create a reserve COE pool of 1% which is 10k out of a million vehicles. 

2) Instead of twice a month bidding, COE bidding or sale window (a better name since no more bidding) is increased to twice a week because we need a faster feedback response to set the price faster. The number of COE per window is divided accordingly

3) The two BIG question is how do you set the price and what to do if more people want to buy in each window than what is available.

4) price set is based on demand derived from each window. It is similar to how to price every goods. If we sell out, we increase the price depending on how much we sell out. If we don't sell out, we DON'T reduce the price to ridiculous level just to sell out like the current policy. The unsold COE goes into the reserve pool and the price drops based on how much unsold we have.

5) If we sell out, we can take a certain portion of the reserve COE to meet the sudden demand. If the demand is too big, it is by drawing lots to decide allocation. That is why we need to have more frequent COE bidding as you cannot be sure you will be successful. To solve this problem, we can also create a new Cat COE where it is by bidding. If you are time sensitive, you can go there. We also want to adjust the price faster so we don't have a sell out situations often and run out of reserve COEs.

 

There are probably more details to iron out but I am wondering if there is anything seriously wrong with this. It sort of duplicates what normal people do when selling stuff. They keep inventories, and they price their goods based on demand. The only different thing is allocation is not allocated by first come first serve, but by drawing lots when sold out. 

If you looked at the current system,  the MAIN problem of the system is that Price alone is handling ALL the fluctuations in the real world like demand. And instead of having the supply dampening those fluctuations, the supply itself is making worse as the supply it also wildly fluctuating based on things that happened 10 years ago. My system is trying to fix the supply side problem. It also removes the "bidding" problems like rigging, etc. 

Edited by Wind30
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Moderator

My simple proposal is pay what you bid instead of lowest successful bidding price. Another way, which will be unfavorable to the lower end buyer is bid for your own coe, and full cash for the bid (not just $10K when submitting the bid). 

I understand your good intention but your proposal is almost the same as current bidding scheme, and we all know demand will forever outstrip supply, so it would not work as intended. 

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Twincharged

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.

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5th Gear

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 😄.

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Moderator
2 minutes 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 😄.

image.png.1a61c86d94cf8b84e0d43ed1971f2baf.png

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Turbocharged
18 minutes ago, Carbon82 said:

My simple proposal is pay what you bid instead of lowest successful bidding price. Another way, which will be unfavorable to the lower end buyer is bid for your own coe, and full cash for the bid (not just $10K when submitting the bid). 

I understand your good intention but your proposal is almost the same as current bidding scheme, and we all know demand will forever outstrip supply, so it would not work as intended. 

I would think that it will still benefit the rich for full cash payment of coe as they are more likely to make full payment of their cars anyway.

Similarly if self bid, the rich will still benefit as they can easily put down 100k without blinking an eye. 

Getting the dealers to do it kind of level things out as they need to cater for all their customers. 

Honestly, I can't think of a way that will benefit both consumers and gahmen. So I think the current system is here to stay.

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6th Gear

thanks for cracking your head with all the ideas. The fact is that the scholars at LTA know the problem and the right thing to do. But there is no incentive to do it because it is affecting the CASH COW. No one wants to be the bad guy in front of their boss. Never mind, the people no longer can afford a car, as long as their job is secure and bonus coming in, who cares? They all highly paid and still can buy a car, so why bother? The only way is to tell them clearly that no job is guaranteed. If you are not willing to solve, then let's someone else do it. 

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Turbocharged
49 minutes ago, Carbon82 said:

My simple proposal is pay what you bid instead of lowest successful bidding price. Another way, which will be unfavorable to the lower end buyer is bid for your own coe, and full cash for the bid (not just $10K when submitting the bid). 

I understand your good intention but your proposal is almost the same as current bidding scheme, and we all know demand will forever outstrip supply, so it would not work as intended. 

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

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I think even out the supply of COE will help. 

In this way new and used price will stabilize.

and won't have the situation where used car can be sold for a profit or drive for free

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Supersonic

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.

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Turbocharged
(edited)

The question should be WHY the government should lower the price and volatility of COE price as oppose to collecting more revenues, and not HOW.  For HOW, there are many obvious ways to do it.  Without answering the WHY, why should they lower it ? We can talk until the cow comes home, but there is no vindication to do it.

Edited by Ingenius
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6th Gear
3 minutes ago, Ingenius said:

The question should be WHY the government should lower the price and volatility of COE price as oppose to collecting more revenues, and not HOW.  For HOW, there are many obvious ways to do it.  Without answering the WHY, why should they lower it ? We can talk until the cow comes home, but there is no vindication to do it.

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?  

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Supercharged
(edited)

The current system volatility is base on supply. Supply needs to stabilize instead of wild 10yr cycle swing.

Gahmen setting price will be the worst solution ever... 

Bear in mind u get rid of the swing also means there will never be "cheap" COE periods...

Edited by yishunite
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Hypersonic

I like the swings 

If no swings how to buy low and sell high?

All the smart people buy low and sell high.

Who here buy high and sell low?

:D

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Internal Moderator

HDB already sell in million liao, govt no eng discuss about COE lah. $130K small case. 

 

They have all looking at housing issue now. hahaha. 

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Supersonic
(edited)
33 minutes 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?  

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

Edited by Volvobrick
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