COE cat A crashed to $2

[sohwayne]

;p good for new car buyers

 

[zcf]

time to buy car in recession time? :sweat:
http://www.straitstimes.com/Breaking+News/Singapore/Story/STIStory_304229.html

COE crashes to $2
The other categories all ended much lower too By Christopher Tan, Senior Correspondent

WHAT is thought to be impossible in an open bidding system has happened: COE has crashed.
At the close of the latest tender on Wednesday, COE premium for cars up to 1,600cc - the mainstay of car buyers - closed at an unprecedented $2.
Motor traders were shocked. All said the market was soft, but no one expected the price to crash.
The number of bids submitted exceeded the COE supply of 1,851 by only one.
The other categories all ended much lower as well.
COE for cars above 1,600cc closed at $4,889 - almost half the previous value. The Open COE, which can be used for any vehicle type, ended at $6,889 - down from $10,490 before.
COE for commercial vehicles finished at $6,189, from $8,889; and motorbike COE dipped to $1,012, from $1,509 previously.
It is the first time that a COE premium for cars has fallen to rock-bottom. The last time car COE came this close was in December 1997, when the premium for big cars plunged to $50.
Observers, however, pointed out that that was during a closed bidding system, when bidders could not see what the prevailing bids in a tender were. In a way, they were bidding blind, they said.
Soon after the $50 result, the system was changed to an open-bidding platform. In this system, bidders could see the value of bids being submitted, and thus could base their decision on the prevailing demand.
The other time when the market witnessed a COE crash was in early 2007, when premium for commercial vehicles hit $1 for six consecutive tenders.
This was because many commercial vehicle sellers could not get their supply of new models that would meet a new emission standard the Government pushed through.
Sales of new commercial vehicles almost ground to a halt, resulting in the COE crashes.
The latest crash may not benefit everyone though. Car owners planning to sell their vehicles will have to stomach much lower resale values. Used car dealers, already jittery over a high inventory, will not be willing to take in more cars. This will create a viscious circle, as folks who cannot sell their existing cars won't be looking for a new one any time soon.

 

[prodigic]

Make sure tho, keep the car till 10yrs. Else pay 80% of pricing.

If sell off cfm low value.

 

[Ramius75]

i dont get this part thou.

Any experts here can show me the math ?

If i bought a car with Cheap COE... i have already save on the different isnt it ? Even if im will change a new car 3 years later.

 

[ConnorMcLeod]

i dont get this part thou.

Any experts here can show me the math ?

If i bought a car with Cheap COE... i have already save on the different isnt it ? Even if im will change a new car 3 years later.

Me also has the same problem understanding.

If I buy my car with $2 COE, say the whole thing costs me $50002.
Compare with someone else who bough the car with $10000 COE, he pays $60000.

3 yrs later we sell to 2nd hand market.

He may ask for $42000.
I can undercut him with price at $41000. He loses $18k, I lose $9002.

Does this work?

OK if the cars are scrapped then it maybe different story, still I expect to lose less with cheap COE. Someone please teach me how this COE / PARC whatever works

 

[mapper48]

Me also has the same problem understanding.

If I buy my car with $2 COE, say the whole thing costs me $50002.
Compare with someone else who bough the car with $10000 COE, he pays $60000.

3 yrs later we sell to 2nd hand market.

He may ask for $42000.
I can undercut him with price at $41000. He loses $18k, I lose $9002.

Does this work?

OK if the cars are scrapped then it maybe different story, still I expect to lose less with cheap COE. Someone please teach me how this COE / PARC whatever works

Basically, when you sell off as second hand, most buyer will then see what is the paper value of the car at the point of sale, so if your COE is $2, there is basically no returns from COE value, the only returns will be from the ARF value at prevailing rate, (I am not sure what is the calculated value now). Beside the depreciation rate for new cars is very steep, you will lose around 20% when you take your car out, so the 2nd hand buyer also knows this and will not pay too much for you car. Hope this make some sense.

 

[Lmodel]

Me also has the same problem understanding.

If I buy my car with $2 COE, say the whole thing costs me $50002.
Compare with someone else who bough the car with $10000 COE, he pays $60000.

3 yrs later we sell to 2nd hand market.

He may ask for $42000.
I can undercut him with price at $41000. He loses $18k, I lose $9002.

Does this work?

OK if the cars are scrapped then it maybe different story, still I expect to lose less with cheap COE. Someone please teach me how this COE / PARC whatever works

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

 

[HydroPoP]

Time to go shopping! BBB! :bsmilie:

 

[Lmodel]

Time to go shopping! BBB! :bsmilie:

Ur purchase will be based on the next COE bidding :bsmilie::bsmilie::bsmilie:

 

[kelccm]

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

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??:dunno:

I would say with the $2 COE, I potentially could save on the $10k difference loan interest:think:

 

[relaxxjaxx]

COE: $2
Cherry QQ: $17000
Total: $17002

Take weekend car + govt Rebate: $17000

Total paid: $2

=)

 

[kelccm]

Ur purchase will be based on the next COE bidding :bsmilie::bsmilie::bsmilie:

Those who booked their cars in the past 2 weeks kio tio liao:bsmilie:

 

[silverfish]

BBB! cheaper than my mee pok

COE: $2
Cherry QQ: $17000
Total: $17002

Take weekend car + govt Rebate: $17000

Total paid: $2

=)

 

[Canew]

COE: $2
Cherry QQ: $17000
Total: $17002

Take weekend car + govt Rebate: $17000

Total paid: $2

=)

:bigeyes::bigeyes::bigeyes:

 

[HydroPoP]

BBB!!! :devil:

 

[HydroPoP]

Ur purchase will be based on the next COE bidding :bsmilie::bsmilie::bsmilie:

Next COE bidding $1 :bsmilie::think:

 

[pisduck]

Those who booked their cars in the past 2 weeks kio tio liao:bsmilie:

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....

Even if a rebate level like $4k is specified, it is usually not good for the buyers. If the rebate level is $4k, and the previous COE is $8k, the car buyer actually LOSES money if he sells the car within 5 years compared to him getting a $8k COE. AS if he sell the car anytime within 5 years, the COE rebate he could have gotten back is actually HIGHER than the $4k rebate he gotten back from the dealer initially.

Hopes this clears things up.

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....

 

[AverRal]

COE: $2
Cherry QQ: $17000
Total: $17002

Take weekend car + govt Rebate: $17000

Total paid: $2

=)

LOL. Nice one.

 

[1and6]

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....

Even if a rebate level like $4k is specified, it is usually not good for the buyers. If the rebate level is $4k, and the previous COE is $8k, the car buyer actually LOSES money if he sells the car within 5 years compared to him getting a $8k COE. AS if he sell the car anytime within 5 years, the COE rebate he could have gotten back is actually HIGHER than the $4k rebate he gotten back from the dealer initially.

Hopes this clears things up.

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....

what abt trade in a 2 year old car at when bot at $12K COE... for a new car? I guess they would put the trade-in value on the chopping board? since they can claim 2nd hand car no demand! :think:

 

[behyx]

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?