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#21

Posted 05 May 2019 - 09:17 AM

Lotr
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Interesting article from straits time, advising now itâs not best time to change car ð¤ new regulations coming soon for private hire ï¼wonder what could it be.


Don't rush to push COE prices higher
https://www.straitst...9-05-05 8:05:56

Read the article. There are some interesting insights/speculations on the private hire companies' strategies.

While he thinks that COEs will come down, one aspect not cover is the COE supply trend...

#22

Posted 05 May 2019 - 09:23 AM

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Agree that he has not factored in the elephant in the room - the COE quota reduction.

#23

Posted 05 May 2019 - 10:00 AM

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Anyone can copy and paste the article here? No premium account here! 😅

Edited by BtyCheers, 05 May 2019 - 10:00 AM.

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#24

Posted 05 May 2019 - 10:09 AM

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Credit:ST
Certificate of entitlement (COE) premiums are on the rise. Compared with the start of the year, car COEs have climbed by 28 to 59 per cent to $33,199 (cars up to 1,600cc), $48,000 (cars above 1,600cc) and $52,410 (open).

Folks looking to buy a new car might be alarmed. Should they rush out to buy before prices rise further?

In a word, no. Because doing so will only fuel the premium hike. Time and again, we have seen similar market responses sending prices even higher and resulting in a self-fulfilling prophecy.

The right thing to do is to resist the temptation and wait it out. What goes up will come down and COE prices are no exception.

Let those who choose to succumb to fear flock to the showrooms. They might drive prices up, but it will be temporary and at their expense. Once demand from panic buying is soaked up, prices will head south.

More so, since the factors fanning the COE flame in recent months have little to do with retail demand. More likely than not, they were linked to competition between the two private-hire operators - Grab and Gojek - here.

Let those who choose to succumb to fear flock to the showrooms. They might drive prices up, but it will be temporary and at their expense. Once demand from panic buying is soaked up, prices will head south.

Changes to regulations governing the private-hire industry are expected in the next couple of months. Operators could be expecting these changes to have an impact on their businesses and are rushing to grow their fleets now - before new rules are announced.

There are two possible scenarios ahead.

One, if these new rules are what the industry expects, COE prices will ease because they will no longer be able to operate the way they have been, which drove them to rush for COEs in the first place.

Two, if the new rules are not what the industry expects, COE prices will also ease because players would have "bought forward" and no longer need to secure COEs as aggressively as before.

Consumers who join the rush now will run the risk of facing negative equity - when the residual value of the car is less than the balance of the owner's loan - when a correction in COE prices comes (and it will come).

Many who bought their cars three to five years ago are facing this situation. Some are scrapping their cars prematurely and replacing them with new ones with lower COEs. This is a costly exercise, even if it appears to be one which allows consumers to cut losses.

It would be far more prudent to wait for the current frenzy to die down before making your way to the showroom.

The considerations are similar for car owners looking to extend the lifespan of their current rides. Some are looking to pay the prevailing quota premium (PQP) now, even though there are several months left before their vehicle's COE expires.

They should likewise resist doing so. Especially if the expiring COE is a relatively inexpensive one. They should instead enjoy the use of their low-COE car right up to the last possible day.

If PQP - a moving average of quota premiums - turns out to be higher than they are now, so be it.

Scrapping a car before its run-out date has a cost too. For instance, if a car has an annual depreciation of $7,500, deregistering it six months earlier would incur an implicit cost of $3,750.

Will COE climb $3,750 over the next six months, after having risen by an average of $10,000 since the beginning of the year? Well, even if it does rise by more than $3,750, the cost to those who wait will not be significant.

At the same time, those who choose to wait stand the chance of paying a lower PQP should premiums soften.

And which direction premiums head in the next few months will depend largely on how consumers behave in the next few weeks.

As for the irrational exuberance of private-hire operators, upcoming regulatory changes will hopefully rein them in.

Edited by Clu999, 05 May 2019 - 10:19 AM.

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#25

Posted 05 May 2019 - 11:07 AM

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Soon to be announced regulations for Private Hire, is the age limit of the cars used. Max up to 10 years old. You won't get to sit in any COE private hire cars in time to come.

A substantial number of private hire cars are now COE cars.

What does this mean? There would be a rush to renew the fleet, leading to higher COE prices.

I am sure the writer of the ST article knows about this, just that it's politically incorrect to put it in writing prematurely.

Edited by Vinceng, 05 May 2019 - 11:11 AM.

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#26

Posted 05 May 2019 - 01:24 PM

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That's intriguing.  If that is implemented, it will have an impact on PHV landscape since the cost of new car ownership and new car rental are much higher compared to COE cars.  This will also continue to drive up COE as the PHV drivers and Grab/Go-Jek partners switch to newer cars.  The PHV drivers' income could drop as a result.



#27

Posted 05 May 2019 - 01:48 PM

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That's intriguing. If that is implemented, it will have an impact on PHV landscape since the cost of new car ownership and new car rental are much higher compared to COE cars. This will also continue to drive up COE as the PHV drivers and Grab/Go-Jek partners switch to newer cars. The PHV drivers' income could drop as a result.

Is it thats why so many new opel phv on the road already?
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#28

Posted 05 May 2019 - 01:49 PM

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Soon to be announced regulations for Private Hire, is the age limit of the cars used. Max up to 10 years old. You won't get to sit in any COE private hire cars in time to come.

A substantial number of private hire cars are now COE cars.

What does this mean? There would be a rush to renew the fleet, leading to higher COE prices.

I am sure the writer of the ST article knows about this, just that it's politically incorrect to put it in writing prematurely.

 

means all the above 10 yr cars need to be replaced = Grab & Gojek will cheong to buy more COE now then later

 

u telling me, COE wont cheong ?


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#29

Posted 05 May 2019 - 02:16 PM

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means all the above 10 yr cars need to be replaced = Grab & Gojek will cheong to buy more COE now then later

 

u telling me, COE wont cheong ?

 

How high COE will surge, depends on how aggressively the private hire rental companies bid. 

 

The almost empty halls of Cars @ Expo last weekend is crystal clear evidence that people are not buying. 


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#30

Posted 05 May 2019 - 02:58 PM

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The new PHV rulings are likely to synchronise the service levels of taxis versus PHVs.  It should be this set of rulings that make the taxi operators see red over PHV companies as the rulings drive up the business overheads.

 

https://www.lta.gov....nd-the-lta.html

 

If LTA goes after the PHV car age, it will drive up COE demand and price for true car buyers, pushes down the take-home income of the PHV drivers, and reduce the availability of PHV cars on the road.  Since election is coming soon, logically LTA should not be imposing this rule that benefits nobody.


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#31

Posted 05 May 2019 - 04:08 PM

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Is it thats why so many new opel phv on the road already?

Go Jek increasing Their fleet with 1000+ new Opel Insignia..
Besides PHV and real car buyers pushing COE prices up... there are 2 more factors..

1) Many backlogs
2) Dealers bid for keeping. That’s why u see “immediate registration” from some dealer’s offer.
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#32

Posted 05 May 2019 - 04:27 PM

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"If PQP - a moving average of quota premiums - turns out to be higher than they are now, SO BE IT."

:blink:   is he going to pay the difference for those who take his advise? talk is free.


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#33

Posted 05 May 2019 - 10:16 PM

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Will COE climb $3,750 over the next six months, after having risen by an average of $10,000 since the beginning of the year? Well, even if it does rise by more than $3,750, the cost to those who wait will not be significant.

Last round cat A went up by $4,040, cat B went up by $4,898, cat E went up by $4,201. So yes. It climbed up by more than $3,750 in 2 weeks lol.


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#34

Posted 06 May 2019 - 01:05 AM

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"If PQP - a moving average of quota premiums - turns out to be higher than they are now, SO BE IT."
:blink: is he going to pay the difference for those who take his advise? talk is free.

Always preferred Dr Winston Lee's content, but the poor doc no longer writes after he was prosecuted in court for molest.

https://www.todayonl...icence-practise

He should be allowed to write and molest all the cars he wants, legally. The 911 would be the first he'd place his hands on.

Edited by Vinceng, 06 May 2019 - 01:11 AM.


#35

Posted 06 May 2019 - 01:06 AM

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Credit:ST
Certificate of entitlement (COE) premiums are on the rise. Compared with the start of the year, car COEs have climbed by 28 to 59 per cent to $33,199 (cars up to 1,600cc), $48,000 (cars above 1,600cc) and $52,410 (open).

Folks looking to buy a new car might be alarmed. Should they rush out to buy before prices rise further?

In a word, no. Because doing so will only fuel the premium hike. Time and again, we have seen similar market responses sending prices even higher and resulting in a self-fulfilling prophecy.

The right thing to do is to resist the temptation and wait it out. What goes up will come down and COE prices are no exception.

Let those who choose to succumb to fear flock to the showrooms. They might drive prices up, but it will be temporary and at their expense. Once demand from panic buying is soaked up, prices will head south.

More so, since the factors fanning the COE flame in recent months have little to do with retail demand. More likely than not, they were linked to competition between the two private-hire operators - Grab and Gojek - here.

Let those who choose to succumb to fear flock to the showrooms. They might drive prices up, but it will be temporary and at their expense. Once demand from panic buying is soaked up, prices will head south.

Changes to regulations governing the private-hire industry are expected in the next couple of months. Operators could be expecting these changes to have an impact on their businesses and are rushing to grow their fleets now - before new rules are announced.

There are two possible scenarios ahead.

One, if these new rules are what the industry expects, COE prices will ease because they will no longer be able to operate the way they have been, which drove them to rush for COEs in the first place.

Two, if the new rules are not what the industry expects, COE prices will also ease because players would have "bought forward" and no longer need to secure COEs as aggressively as before.

Consumers who join the rush now will run the risk of facing negative equity - when the residual value of the car is less than the balance of the owner's loan - when a correction in COE prices comes (and it will come).

Many who bought their cars three to five years ago are facing this situation. Some are scrapping their cars prematurely and replacing them with new ones with lower COEs. This is a costly exercise, even if it appears to be one which allows consumers to cut losses.

It would be far more prudent to wait for the current frenzy to die down before making your way to the showroom.

The considerations are similar for car owners looking to extend the lifespan of their current rides. Some are looking to pay the prevailing quota premium (PQP) now, even though there are several months left before their vehicle's COE expires.

They should likewise resist doing so. Especially if the expiring COE is a relatively inexpensive one. They should instead enjoy the use of their low-COE car right up to the last possible day.

If PQP - a moving average of quota premiums - turns out to be higher than they are now, so be it.

Scrapping a car before its run-out date has a cost too. For instance, if a car has an annual depreciation of $7,500, deregistering it six months earlier would incur an implicit cost of $3,750.

Will COE climb $3,750 over the next six months, after having risen by an average of $10,000 since the beginning of the year? Well, even if it does rise by more than $3,750, the cost to those who wait will not be significant.

At the same time, those who choose to wait stand the chance of paying a lower PQP should premiums soften.

And which direction premiums head in the next few months will depend largely on how consumers behave in the next few weeks.

As for the irrational exuberance of private-hire operators, upcoming regulatory changes will hopefully rein them in.

 

Wah, both his two possible scenarios lead to the price drop of COE. I clap for him. 

 

Then ask car owner to enjoy their car to the last possible day, and if have to pay high PQP, "so be it".  [hur]

 

And ask whether COE will climb $3750 in six months??? Did he just wake up from hibernate last week?  :lll._.:


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#36

Posted 06 May 2019 - 01:13 AM

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Wah, both his two possible scenarios lead to the price drop of COE. I clap for him.

Then ask car owner to enjoy their car to the last possible day, and if have to pay high PQP, "so be it". [hur]

And ask whether COE will climb $3750 in six months??? Did he just wake up from hibernate last week? :lll._.:

Chris Tan's content has no substance and lacking that oomph.

His juniors like Tony Tan, David Ting and Leow Ju Len can write better.

Edited by Vinceng, 06 May 2019 - 01:19 AM.


#37

Posted 06 May 2019 - 06:36 AM

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The bidding will begin today. The market is always right.

#38

Posted 06 May 2019 - 06:59 AM

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If one do not buy now, they are only helping the rental or public hire companies. They do not bother whether you buy or not. They are buying all the same anytime anyday as they are making money while you are spending money.
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#39

Posted 06 May 2019 - 07:50 AM

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if those COE paid cars cannot be used for PHV

 

then all the COE paid cars prices will be very cui

 

whole market will be flooded with these cars

 

maybe many will leeturn back to LTA

 

 


Edited by aprilfool22, 06 May 2019 - 07:51 AM.

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#40

Posted 06 May 2019 - 07:54 AM

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If one do not buy now, they are only helping the rental or public hire companies. They do not bother whether you buy or not. They are buying all the same anytime anyday as they are making money while you are spending money.

 

those who need to buy, already bought. Those who thought of buying also bought.

 

Left those NATO who TNT - talk and talk ...




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