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Bid COE yourself - I tried it!

Boringchap

By Boringchap,
in General Car Discussion

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Vratenza

Vratenza

Supersonic

Ok let me try again. Eg.

 

AD expects the Cat B COE to rebound to 46k. Profit margin set by this level of COE. He sets the rebate at 40k.

If COE hits 50k, he has to cut profit of 4k from what he earns from each guranteed COE (can use Cat E too) buyer. Non guranteed he has no obligation to fulfill orders.

 

If COE hits 43k, his profit margin just got a bonus 2k from each guranteed COE buyer. Still he has no obligation to fulfil the non-guranteed COE buyers.

 

If COE hits 40k rebate level, that is at max profit because he will have 5k added to his profit from each guranteed COE buyer. Still he has no obligation to fulfil the non-guranteed COE buyers.

 

If COE is 35k, the AD has to pay our 5k rebate to each guranteed COE buyer and the non guranteed COE buyer (usually rebate level lesser by a few but for ease of discussion we assume is the same rebate level)

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JiangQi

JiangQi

1st Gear

5k needs to be returned to the customer

Let me explain it using last COE price ($46.651) for example:

When the AD set a car price including COE now, they will not base on the actual number of current COE ($46.651) due to the COE price fluctuation in next time; they may estimate the next COE to 50k to ensure not lost the profit form the COE if next COE increasing and rebate is $40k to maximize the profit from COE if next COE decreasing.

 If tomorrow COE is 50k, the AD will not get and will not lost any profit from COE.

If tomorrow COE is same as before ($46k), the AD will get $4k additional profit from COE.

If tomorrow COE is S40k, the AD will get $10k additional profit from COE. You will not get any rebate.

If tomorrow COE is S38k, the AD will still get $10k additional profit from COE. You will get 2k (40k-38k) rebates.

This is why “COE hit rebate level is their max profit”.

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Soundphile

Soundphile

2nd Gear

Ok let me try again. Eg.

 

AD expects the Cat B COE to rebound to 46k. Profit margin set by this level of COE. He sets the rebate at 40k.

If COE hits 50k, he has to cut profit of 4k from what he earns from each guranteed COE (can use Cat E too) buyer. Non guranteed he has no obligation to fulfill orders.

 

If COE hits 43k, his profit margin just got a bonus 2k from each guranteed COE buyer. Still he has no obligation to fulfil the non-guranteed COE buyers.

 

If COE hits 40k rebate level, that is at max profit because he will have 5k added to his profit from each guranteed COE buyer. Still he has no obligation to fulfil the non-guranteed COE buyers.

 

If COE is 35k, the AD has to pay our 5k rebate to each guranteed COE buyer and the non guranteed COE buyer (usually rebate level lesser by a few but for ease of discussion we assume is the same rebate level)

 

You already explained it yourself, at the coe rebate level, AD making max profit. Any Coe level below the rebate level, AD is still maintaining its max profit.

 

How can the profit goes lower after it reaches its max profit??

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Macrosszero

Macrosszero

Turbocharged

You already explained it yourself, at the coe rebate level, AD making max profit. Any Coe level below the rebate level, AD is still maintaining its max profit.

 

How can the profit goes lower after it reaches its max profit??

 

He is not maths fail, he is comprehension fail.

 

He fails to understand that when the customer gets back 5k, it is not coming from the AD's profit margin.

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Vratenza

Vratenza

Supersonic

Let me explain it using last COE price ($46.651) for example:

When the AD set a car price including COE now, they will not base on the actual number of current COE ($46.651) due to the COE price fluctuation in next time; they may estimate the next COE to 50k to ensure not lost the profit form the COE if next COE increasing and rebate is $40k to maximize the profit from COE if next COE decreasing.

 If tomorrow COE is 50k, the AD will not get and will not lost any profit from COE.

If tomorrow COE is same as before ($46k), the AD will get $4k additional profit from COE.

If tomorrow COE is S40k, the AD will get $10k additional profit from COE. You will not get any rebate.

If tomorrow COE is S38k, the AD will still get $10k additional profit from COE. You will get 2k (40k-38k) rebates.

This is why “COE hit rebate level is their max profit”.

 

Thanks for the explanation! See the light now!

He is not maths fail, he is comprehension fail.

 

He fails to understand that when the customer gets back 5k, it is not coming from the AD's profit margin.

 

yup was muddled up on that part! Comprehension fail! [:p]

So If you guys are the AD, will you guys try to bid higher than rebate or lower than rebate level set.

 

Eg.Nissan rebate is 40k vs Hyundai 31k

 

What will be their bidding strategy?

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Soundphile

Soundphile

2nd Gear

Thanks for the explanation! See the light now!

 

yup was muddled up on that part! Comprehension fail! [:p]

So If you guys are the AD, will you guys try to bid higher than rebate or lower than rebate level set.

 

Eg.Nissan rebate is 40k vs Hyundai 31k

 

What will be their bidding strategy?

 

AD usually bid a few Ks higher than rebate. This amount already factor in to the profit margin already. and when Coe goes up, easier to persuade buyers to buy on pretext that the Coe is on the uptrend. This is what I feel..

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Soya

Soya

Supersonic

I din even bother trying.

 

C&C got Kong Hee Fatt Choy promo.

 

PML got Airshow promo.

 

These are the boys wif fat wallets. Peasants like us cannot compete lah.

 

Plus many still havent read the news that the perfect storm is coming: poor economy + bumper coe crop.

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BenTong

BenTong

Turbocharged

Thanks for the explanation! See the light now!

 

 

yup was muddled up on that part! Comprehension fail! [:p]

 

So If you guys are the AD, will you guys try to bid higher than rebate or lower than rebate level set.

 

Eg.Nissan rebate is 40k vs Hyundai 31k

 

What will be their bidding strategy?

They kena hantAm by Audi who bidded high
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WismanWizSiew

WismanWizSiew

Clutched

Valuable post that I think should be bumped up. I am new to the car purchasing scene and how COE works... if everyone bid their own COE instead of buying from Auto Dealers, COE will definitely go down. 

 

Hope more interested car buyers like me reads this.

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Heartbreakid

Heartbreakid

6th Gear
(edited)

Valuable post that I think should be bumped up. I am new to the car purchasing scene and how COE works... if everyone bid their own COE instead of buying from Auto Dealers, COE will definitely go down.

 

Hope more interested car buyers like me reads this.

Definitely the consumers will have the upper hand if they were to bid the coe themselves and hence controlling the price. But the loop hole will always be there as in the dealer will do the bidding and hence "controlling" or "manipulating" the COE prices and I believe LTA would want the dealers to control the bidding price too. Otherwise the COE has no effect on controlling the car population if majority of the consumers bid the COE. Edited by Heartbreakid
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