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COE premiums continue rising; higher Nov-Jan quota unlikely to cool car demand, say dealers


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Source: https://www.straitstimes.com/singapore/transport/records-set-in-three-coe-categories-open-category-coe-soars-to-158004

SINGAPORE – Certificate of entitlement (COE) premiums reached new highs for the two car categories and the Open category at the latest tender exercise on Wednesday.

The COE premium for larger cars with engines above 1,600cc or 130bhp and electric vehicles (EVs) above 110kW ended at $150,001, a 2.74 per cent increase over the $146,002 posted in the previous tender.

The premium for the Open category – which can be used for any vehicle type except motorcycles, but ends up being used mostly for bigger cars – ended at $158,004, up 3.95 per cent over the $152,000 record set two weeks ago.

This is the sixth consecutive time that records were broken for both the large car and Open COE categories.

The COE premium for smaller cars and EVs climbed 1.92 per cent to $106,000, from $104,000 set two weeks ago. The previous record of $105,000 was set just two tender exercises ago, in September.

Some motor traders said the demand for smaller car COEs was partly fuelled by The Car Expo event held last weekend. Organised by SPH Media, which publishes The Straits Times, the event had a stronger focus on smaller and less powerful car models than other types of new cars.

By the end of the tender exercise on Wednesday, there were 1,028 bids for such COEs. This is only the second time since October 2021 that the number of bids for a COE category broke into four digits.

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AD and used car dealers jin happy these period. New car got demand. Used car also got demand. Money laundering don't buy new, all buy used, where got like us sit down bargain abit one. They see they like they buy, parked one side just see song already. 

Used car dealers words can listen means pigs are also learning to fly. Just a few days ago, didn't one used car dealer veteran mentioned he encouraged car owners to change every 2 to 3 yrs in order to keep value of the car high? 🤣 

Aiya. I forgot to add ah. Good luck Singapore ah good luck or should be stinkapore for a piece of paper smelly smelly can get 6 figure, especially in paperless context now? 🤣

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Demand fuelled by car expo? So the visitors are Grad, Da-ta, Gojack, Chariot, Jet go, Tribal, car rentals, ST leash or what? 😂

Or the visitors all carry the PHV labels with them for free entry? 🤣

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COE is akin to limited commodity. With the ever increasing population and zero growth policy in COE, the upward trend is expected. Regardless the price, there will always be  demand from young/ old aspiring/ existing drivers. Similar to luxurious goods i.e. Hermes, Rolex, Chanel etc. Price continues to increase but there is always demand for it.

Hence, increasing the supply in the next few months is unlikely to curb the price but instead stoke the price higher. If the intent of oversupplying is to curb the price, then the current policy/ practice should be reviewed to only allow potential car buyers to bid and secure a COE before shopping for cars. And potential car buyers/ bidders shall pay exactly as what they have bided when the bid is successful.

Having say this, car buyers for commercial purposes should also of course be recategorised. This will level the playing field for potential car buyers including car hailing/ sharing companies. In other words, car buyers (for personal use) should not be made to pay additional premium to outbid companies who have better resources. 

One could argue that by doing so, the companies could cascade the cost to consumers in long run. Having the aspiring car buyers to bear the blunt of premium is equally unfair to them. Not to forget, commercial cars could be 24/7 on the road when cars (for personal uses) are only used as and when required. Hence why should they be made to pay the same COE as the commercial companies who are making money from the cars?

Else there is no need to increase the supply now if the objective is not to keep the cost of COE affordable. 

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On 10/19/2023 at 12:44 PM, BreezyWind said:

COE is akin to limited commodity. With the ever increasing population and zero growth policy in COE, the upward trend is expected. Regardless the price, there will always be  demand from young/ old aspiring/ existing drivers. Similar to luxurious goods i.e. Hermes, Rolex, Chanel etc. Price continues to increase but there is always demand for it.

Hence, increasing the supply in the next few months is unlikely to curb the price but instead stoke the price higher. If the intent of oversupplying is to curb the price, then the current policy/ practice should be reviewed to only allow potential car buyers to bid and secure a COE before shopping for cars. And potential car buyers/ bidders shall pay exactly as what they have bided when the bid is successful.

Having say this, car buyers for commercial purposes should also of course be recategorised. This will level the playing field for potential car buyers including car hailing/ sharing companies. In other words, car buyers (for personal use) should not be made to pay additional premium to outbid companies who have better resources. 

One could argue that by doing so, the companies could cascade the cost to consumers in long run. Having the aspiring car buyers to bear the blunt of premium is equally unfair to them. Not to forget, commercial cars could be 24/7 on the road when cars (for personal uses) are only used as and when required. Hence why should they be made to pay the same COE as the commercial companies who are making money from the cars?

Else there is no need to increase the supply now if the objective is not to keep the cost of COE affordable. 

That is the whole point all along. To drive out all the private buyers. The eventual end goal is to have as little private buyers as possible.

Bring forward quota is not to make COE price affordable. Is to avoid the large fluctuation in quota (and therefore prices) that is predicted in the coming years ahead.

Don't be surprised to see $100k COE in 2024 and even beyond.

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Main thing is Singaporeans* should stop having such unrealistic life dreams of owning cars lah

Rental is now the future

* Or join the top 2-3% of earners

Edited by yishunite
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It’s the perfect storm. 6.9m population brings in demand for PHV, home delivery. Cars and vans COE how to drop? We are at the point of no return already. They issue how many also no use, all the companies go in and sweep. There is no solution to this problem. Or does gahmen even view this as a problem???

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On 10/19/2023 at 1:00 PM, Benarsenal said:

That is the whole point all along. To drive out all the private buyers. The eventual end goal is to have as little private buyers as possible.

Bring forward quota is not to make COE price affordable. Is to avoid the large fluctuation in quota (and therefore prices) that is predicted in the coming years ahead.

Don't be surprised to see $100k COE in 2024 and even beyond.

Not exactly drive out private buyers... main thing is PHV/rental muscle out the lower end of the scale and this is compounded by fixed quota availability. So even when quota expanded a bit still not much difference until we reach the permanent expansion rather than temporary stopgap

Thats because rich and commercial buyers will remain constant in fixed numbers regardless of availability of quota.

Let's say theres 2000 COEs. Rich take 20% (400 COEs), commercial take 30% (600 COEs), middle class takes 50% (1000 COEs). No problem.

But if quota shrink to 1500 COEs, those 400 rich man COEs will still be taken as money is no issue. Commercial 600 COEs will still be taken regardless of price as they pass that to consumer. So now middle class leftover is only 500 COEs. Guess what, the bottom half of the middle class get priced out at this point.

Then shrink further to 1000 COEs, again rich man will still reserve their 400, maybe commercial may cut down a bit as econs price pressure bites but actually maybe not since as COE skyrockets, their demand in Singapore actually increases. Middle class left nothing lor, now the rich make up 40% of bidders so price goes up accordingly - if COE quota actually shrinks below the availability to those rich bidders then the price skyrockets accordingly cos world of the rich is a totally different income distribution than world of the middle class: the 1-digit-millionaire is like pauper next to 2-digit-millionaire who is pauper next to 3-digit-millionaire.

Now they add in an extra 100 COEs. Guess who will snap them up... commercial bidders that held back under the previous rounds conditions getting too difficult, and just the lowest end of these rich guys who had held back for opportunity cost reasons. So no real effect on price lor

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Turbocharged

it's both funny and ridiculous that a 10-year new car (normal car, not even sports or exotic cars) is as expensive as a 99-year BTO 😂

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I say let COE shoot high high high till our younger gen no sch bus to take, unlike Japan. 

So high that our cai png cost more than 20 bucks a plate. So much more than a plate of roasted goose in HK

So high that all cost goes up to fatten some wallets.

So high that the middle income are the newly poor, nevermind about the lowest society rung, they are already that low anyway.

So high to kill off aspirations not just cars but even the basics. We are after all just a chess piece robots for the economy, isn't it?

Well, shall leave it to our mass if we still want to issue a blank cheque.

We are selfish that we only see what we can see and never look beyond our children future generations. 

Good luck our people, good luck. 

😉

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On 10/19/2023 at 1:29 PM, Fitmugen said:

It’s the perfect storm. 6.9m population brings in demand for PHV, home delivery. Cars and vans COE how to drop? We are at the point of no return already. They issue how many also no use, all the companies go in and sweep. There is no solution to this problem. Or does gahmen even view this as a problem???

How can getting more money be a problem to them? Only we see it as a problem. 

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On 10/19/2023 at 1:00 PM, Benarsenal said:

That is the whole point all along. To drive out all the private buyers. The eventual end goal is to have as little private buyers as possible.

Bring forward quota is not to make COE price affordable. Is to avoid the large fluctuation in quota (and therefore prices) that is predicted in the coming years ahead.

Don't be surprised to see $100k COE in 2024 and even beyond.

Err bro.....now already more than  $100k COE what...why need to wait till 2024?

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On 10/19/2023 at 1:29 PM, Fitmugen said:

It’s the perfect storm. 6.9m population brings in demand for PHV, home delivery. Cars and vans COE how to drop? We are at the point of no return already. They issue how many also no use, all the companies go in and sweep. There is no solution to this problem. Or does gahmen even view this as a problem???

It is going to be a vicious cycle lor.....as COE goes up, more pple give up cars and use PHVs/rental cars.  Then those PHVs/rental cars go bid more since biz is brisk.  They charged higher fees and people still pay cos car is ex.  COE then go up more.  More people then give up cars and used even more PHVs.  This thing gonna repeat perpetually until....

- A recession, pple lose jobs...cannot afford to take PHVs, all go take bus/MRT. PHVs no biz, stop bidding. 

- A policy change of some kind.

 

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On 10/19/2023 at 1:11 PM, Starry said:

It is going to be a vicious cycle lor.....as COE goes up, more pple give up cars and use PHVs/rental cars.  Then those PHVs/rental cars go bid more since biz is brisk.  They charged higher fees and people still pay cos car is ex.  COE then go up more.  More people then give up cars and used even more PHVs.  This thing gonna repeat perpetually until....

- A recession, pple lose jobs...cannot afford to take PHVs, all go take bus/MRT. PHVs no biz, stop bidding. 

- A policy change of some kind.

 

So, this kind of things must be able to sustain for many more years lor. If not see how the Car sharing business will go burst if they expand beyond the economy of the scale. SG is just so small. If cannot sustain them drown lor. Later Big fish come to eat small fish, small fish will only get eaten or eat shit. 

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