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Thread: COE cat A crashed to $2

  1. #21
    Senior Member Big Kahuna's Avatar
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    Default Re: COE cat A crashed to $2

    Hm...rich man getting richer by paying lower price for new car.....poor man getting poorer because we will get retrenched

  2. #22

    Default Re: COE cat A crashed to $2

    when you sell your car (with $2 COE) the selling price is based on your paper value + car body value.

    You benefits from a lower yearly depreciation.

    The formula for used car price for 1~2 years is about 25% off original value.

    But a bigger problem is to be addressed.

    If $2 COE continues to prevail, then those who wants to change car will find it difficult to sell their car because now it is cheaper to buy new cars than 2nd hand. So agents like Borneo and Ka motors will have a tough time selling new cars.

    So those with cars now will eat grass and suck thumb while they watch newer owners drive off shinny new cars off the show room at prices similar to their current car values.

    The only way is to wait till 5 years to export their vehicle at paper value + body.

    More tough times to come soon and car prices will continue to plunge and send the market into a vicious cycle.

  3. #23
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    Default Re: COE cat A crashed to $2

    Quote Originally Posted by kelccm View Post
    To me, base on your rough calculation, I would say that you still lose the same amount of money. You pay $10k less for the new car, so when you sell a few years later, you get back $10k less. So basically the amount of money you lost is still the same isn't it??

    I would say with the $2 COE, I potentially could save on the $10k difference loan interest
    For parallel importers (PI), many buyers usually go for Guaranteed COE rather than to wait for 3 biddings.

    Base on the following scenario:
    i. 1.6L car with guaranteed COE, selling at $55k,
    ii. COE for 1st Bidding Nov 08 ($10,455)
    iii. PI factor a 20% safety buffer for their guaranteed COE in case it rises.

    Effectively, the value of the car will be $42,500. Thus, with no rebate given for a guaranteed COE and also getting a $2 COE, the buyer will instantly lose out $12.5k upon purchase.

    If he decides to sell a year later, he may only get a price of $35k, losing $20k in a year. Even if he scrap/ sell of the vehicle at Year 5, he may only get back $10k, losing $45k in 5 years.

    If he drives for 10 years, he will feel sore for 10 years coz he paid more than others and yet only get a $2 COE.

  4. #24
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    Default Re: COE cat A crashed to $2

    Just took a look at the sgcarmart website. QQ still selling at 28k. So, even COE drop to $2, if u get it, still same, not much diff. But when u sell it, u r the one who going to loose $. Don't forget petrol, insurance etc... Wrost still, ERP aren't $2 forever, it will be increasing till some one is happy with.
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  5. #25

    Default Re: COE cat A crashed to $2

    Quote Originally Posted by relaxxjaxx View Post
    COE: $2
    Cherry QQ: $17000
    Total: $17002

    Take weekend car + govt Rebate: $17000

    Total paid: $2

    =)
    Wow! Is this for real? I don't mind having a Cherry QQ if so

  6. #26
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    Default Re: COE cat A crashed to $2

    With more cars on the road... Will it lead to more traffic jams island wide...? And will that lead to more ERP gantries...?

    In total, will it lead to more cursing and swearing from the drivers...? Buy cheap... But maintenance gradually becomes more expensive...

    Lolz...

  7. #27

    Default Re: COE cat A crashed to $2

    by the way, is it truth that the hype abt low COE prices is not a concern for people who wanna get a OPC?

  8. #28
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    Default Re: COE cat A crashed to $2

    I thought cheap COE is good news.. but from i read here, its not.
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  9. #29

    Default Re: COE cat A crashed to $2

    Some people are truly enjoying the $2. I have a collegue, trying to buy a toyota vios last month, agent told him COE not sucessful. Today he found out he kenna $2 COE, wah piang he happy like hell. $10,000 cheaper, now he is considering changing to 7 year loan instead. our good garment seems to want to stop this from ever happening again. case of sour grape?i'm guessing next month the coe will jump up at least 8K - 10k from people who want to cash in.
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  10. #30

    Default Re: COE cat A crashed to $2

    Quote Originally Posted by pisduck View Post
    it doesn't work that way. It all depends on the rebate level given. If the rebate level is LOW, it is TERRIBLE for those who booked the cars and the ones who make is the dealers.

    U see, u buy the car at the 8k COE price. The dealer will specify a rebate level like maybe 5k, so anything below 5k will refund u. If u forgot to specify rebate level, then assume is ZERO then dealer will just pocket the COE decline and u end up paying $8k for the COE but getting a $2 COE....

    I think this is set up by the dealers to spur demand for cars. I think they purposely withhold a huge number of bids and let the COE crash. From the maths, the people who earn the most is the dealer everytime the COE crash. I think this time round not enough private bidders... everyone forgot to monitor the bidding....

    In view of what you mentioned here, then is it better if we do our own bidding instead of asking the dealer to do it for us? Or the bidding process is very troublesome? Anyone do your own bidding for COE before?

  11. #31
    Member tatsbin's Avatar
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    Default Re: COE cat A crashed to $2

    cheap COE happy(buying) now, sad later(selling).. high COE - both sad ??

  12. #32
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    Default Re: COE cat A crashed to $2

    some are happy, those without rebate are not.
    http://www.straitstimes.com/Breaking...ry_305109.html
    Quote Originally Posted by www.straitstimes.com
    Nov 21, 2008
    Buyers rush for small cars
    They pack showrooms in hopes of getting bargain deals after historic $2 low for COEs By Ang Yiying & Lim Wei Chean

    TELEPHONES were ringing off the hook at car showrooms yesterday, and potential buyers turned up in droves in the hopes of getting a small car at bargain prices.

    The trigger behind this interest in cars under 1,600cc: Wednesday's historic $2 low for the certificate of entitlement (COE) for small cars.
    Some who turned up, unfamiliar with the mechanics of bidding for COEs, were disappointed to find out that only the 1,851 buyers who placed their bids for cars under 1,600cc in the last round had snagged their COEs for $2.
    Those who want to buy cars from now will join the next round of bidding, the results of which will be out in two weeks.
    The majority of these potential buyers were, however, sniffing out cheaper car packages. Indeed, Toyota, Honda and Hyundai dealers all say they have slashed prices: Borneo Motors has cut prices for small Toyota cars like Yaris, Vios E and the Altis 1.6 by between $5,000 and $6,000; Kah Motors has brought down the prices for the Honda Jazz and Honda City by up to $5,500.
    One of the lucky 1,851 who got his COE at the rock-bottom price was mechanical engineer Aung Zaw Myint, 40. He started shopping for a car last month when his company assigned him a project which required him to travel to Tuas daily.
    When he signed on the dotted line for his 1.6 litre Toyota Altis, it was for a set of wheels costing $59,500, including $10,000 for the COE. With the COE price crash, he is getting $9,998 back, with the pleasure of knowing that his car now costs $49,502.
    He said: 'I am very happy because now I get to save about $10,000.'
    As a first-time buyer, he had two other things going for him: He does not have to sell off an older car in the now-collapsed second-hand car market, and it was a cinch getting a car loan since he had no existing loan.
    Motor Image Enterprises group chief executive Glenn Tan said banks are now a lot more selective in granting loans. Nearly a third of those who went to his showroom eyeing a Subaru were rejected for loans recently, he said.
    Businessman Mohamed Kamarudeen, 63, who wanted to buy a car about six months ago, held back because COEs cost around $16,000 then.
    He has missed the $2 COE, but still thinks it is a good time to get a Honda City or Toyota Vios after trading in his second-hand Hyundai Accent.
    There are a few unhappy campers among those who got their COEs for $2. Shipping executive Jun Tan, 43, for instance, signed on with a parallel importer to buy a Toyota Axio for $63,000, and got a verbal promise that she would get a rebate if COE prices fell below $10,000.
    But the staff at the showroom have denied making this promise, so she has gone to the Consumers Association of Singapore.
    Singapore Vehicle Traders Association president Neo Nam Heng said the association would mediate if it received complaints. So far, it has not received any.
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  13. #33

    Default Re: COE cat A crashed to $2

    Quote Originally Posted by Lmodel View Post
    Basing on your example, I will get the car which goes for $42,000.

    Assuming the OMV of a brand new car is $15,000, COE is $14,000 and body value after 5yrs is $3,000.

    On attaining 5 yrs of age, I might sell this car and get back 65% of OMV + 50% of COE + body value. Therefore, I will get back $19,750.

    For the car with $2 COE, I will only get back $9,751.

    The cheaper COE is good only if one intend to drive for 10 years, considering a straight line depreciation.

    Hope it helps.

    Cheers
    What happen to the body value for the $2 COE car of $3,000? Should it be 12,751 instead?

    If so, it is still cheaper to own a $2 COE car cos it depreciate less and save on loan interest. Better to have more money in the pocket. The difference is the $7,000 depreciation on the COE for the two.

  14. #34

    Default Re: COE cat A crashed to $2

    Quote Originally Posted by cheersjy View Post
    In view of what you mentioned here, then is it better if we do our own bidding instead of asking the dealer to do it for us? Or the bidding process is very troublesome? Anyone do your own bidding for COE before?
    I heard if u purchase a car with your own COE, the agent will mark up the car price to cover the lost opportunity on the profit on COE bidding process as that is where most of the profit comes from. Is that true?

  15. #35

    Default Re: COE cat A crashed to $2

    Quote Originally Posted by behyx View Post
    So is it a better time to get a 1st hand or 2nd hand car then?

    What's the chances of COE to be as low for the next bidding?
    The govermen will reduce the quotas, so fat chance of another $2 COE for the next round as the $2 is not enuff for the printing cost let alone the admin cost

  16. #36
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    Default Re: COE cat A crashed to $2

    Quote Originally Posted by DeadEnd View Post
    What happen to the body value for the $2 COE car of $3,000? Should it be 12,751 instead?

    If so, it is still cheaper to own a $2 COE car cos it depreciate less and save on loan interest. Better to have more money in the pocket. The difference is the $7,000 depreciation on the COE for the two.

    Sorry, my mistake. Yes, it should be $12,751.

    Cheaper to own the $2 COE car? Imagine paying an extra $1,000 and get back an additional $7,000 4 years later, it is still more cost effective to pay the extra $1,000. Even a monthly compounded interest rate of 5% p.a of $1,000 will not get you anywhere close to $7,000 in 4 years.


    Quote Originally Posted by DeadEnd View Post
    I heard if u purchase a car with your own COE, the agent will mark up the car price to cover the lost opportunity on the profit on COE bidding process as that is where most of the profit comes from. Is that true?
    Yes, the agent will usually mark up until it comes so close to the value without COE that you will give up the thought of buying without COE.


    Quote Originally Posted by DeadEnd View Post
    The govermen will reduce the quotas, so fat chance of another $2 COE for the next round as the $2 is not enuff for the printing cost let alone the admin cost
    Not quite yet as the transport authority usually do a review once in awhile. However, they will do another study to ensure that the COE will not crash again. The funny thing is that their previous closed bidding system resulted in a crash of COE previously and thus, the opened bidding system. With the opened bidding system, it still crashes. I'm not sure what they will do next to prevent another crash.

    Furthermore, this crash will fuel demand for people to visit the showroom and bookings will increase. it is quite certain that the next round of COE price will go up for this particular category but I'm predicting it to be in the range of $4k to $7k.
    Last edited by Lmodel; 21st November 2008 at 11:29 PM.

  17. #37

    Default Re: COE cat A crashed to $2

    Quote Originally Posted by Lmodel View Post
    Sorry, my mistake. Yes, it should be $12,751.

    Cheaper to own the $2 COE car? Imagine paying an extra $1,000 and get back an additional $7,000 4 years later, it is still more cost effective to pay the extra $1,000. Even a monthly compounded interest rate of 5% p.a of $1,000 will not get you anywhere close to $7,000 in 4 years.
    Sorry, I am lost. Assuming on your example quoted above, the car price without COE is $42,000.

    Scenario A (COE = $14,000)
    Total car price = $42,000 + $14,000 = $56,000
    Cash back after 5 years = $19,750
    Net cost of owning the car for 5 years = $56,000 - $19,750 = $36,250

    Scenario B (COE = $2)
    Total care price = $42,000 + $2 = $42,002
    Cash back after 5 years = $12,751
    Net cost of owning the car for 5 years = $42,002 - $12,751 = $29,251

    Isn't it cheaper to own the $2 COE car for 5 years as in scenario B above or am I missing something?

  18. #38

    Default Re: COE cat A crashed to $2

    Are we really into recession? Observing from the fact that there are still so many people flocking to the car sale room to make purchase...

    Singaporean are rich...

  19. #39
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    Default Re: COE cat A crashed to $2

    Quote Originally Posted by DeadEnd View Post
    Sorry, I am lost. Assuming on your example quoted above, the car price without COE is $42,000.

    Scenario A (COE = $14,000)
    Total car price = $42,000 + $14,000 = $56,000
    Cash back after 5 years = $19,750
    Net cost of owning the car for 5 years = $56,000 - $19,750 = $36,250

    Scenario B (COE = $2)
    Total care price = $42,000 + $2 = $42,002
    Cash back after 5 years = $12,751
    Net cost of owning the car for 5 years = $42,002 - $12,751 = $29,251

    Isn't it cheaper to own the $2 COE car for 5 years as in scenario B above or am I missing something?
    I see where u r lost. My example of buying at $42,000 is based on the assumption in Post 5 of this thread.

  20. #40
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    Default Re: COE cat A crashed to $2

    Quote Originally Posted by scanner View Post
    Are we really into recession? Observing from the fact that there are still so many people flocking to the car sale room to make purchase...

    Singaporean are rich...
    This mad rush is mainly for people whom have not own cars before and do not know how the COE works.

    Basically, many thought that they can just buy a car now with the $2 COE. It was only at the showroom do they realised that their COE will be based on the next bidding, not the current one.

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