# Solution for the COE problem

#### dniwkh

##### New Member
Guys,

I am on MC today so I was thinking about the high COE problem. I have a solution and I want to hear the feedback and see if there is anything wrong.

The solution is to change the COE rebate amount to the average of the initial price and current price. Example, if I bought my car in 2009 for \$10k COE, now if I scrap my car, the rebate amount will be (\$10k+\$80k)/2 * 70% = 31.5k instead of just \$10k * 70%= \$7k

The exact ratio 50% bought and 50% current price can be fine tuned but the idea is tie the COE rebate to current COE prices.

WHY???

Because the COE is a totally whacked up market. Normally when prices go up, demand will go down because people cannot afford and SUPPLY will go up as the higher selling price will encourage more people to sell. COE is screwed up because when prices do up, only demand goes down. Supply remains the same or even goes down depending on government policies.

For my solution, EVERYONE WINS!!!

1) The COE seller WINS because to him, he does not really need a car. He just bought a 50k hyndai 3 years back because cars is so cheap. He does not mind selling it for 55k now.
2) The new car buyer WINS because there is more COE quota on the market. Straight away you can help to bring to prices down a little
3) the government also WINS because they have more COEs to sell. They buy back at 50% discount and sell at 100% price.
4) current car owners WIN because the net number of cars does not go up and it encourages those people who don't really need to drive to take public transport.
5) Speculation will be minor because the government buys it at 50% discount and COE by its nature depreciates at 10% per annum so it is REALLY hard to make money unless COE prices go up like 30% a year or something.
6) it also discourages people to sell their COE when COE prices fall limiting fluctuations in COE supply.

This solution will be popular too because everyone wins. It solves the problem of the inefficient COE market. There are many cars out there who have COEs bought at 10k and are willing to sell their COE at 40k. There are many new car buyers who is willing to pay \$80k for new COEs. The problem is there is no way for the seller to sell his COE to the buyer. So why does not the government be a middle man and grabbed up all the old COEs at a discount and sell it to the new car buyers keeping 50% as commission.?

EVERYONE WINS??

#### Yutaka Go

##### Senior Member
The solution is ban cars and everyone ride bicycle :bsmilie:

#### Halfmoon

##### Senior Member
The solution is ban cars and everyone ride bicycle :bsmilie:
COE is a revenue generator for government..... no way they will terminate it..

#### diver-hloc

##### Moderator
Staff member
Save the environment and reduce road building in S'pore... unless you need a car for business purposes (transport service, delivery etc...), car ownership should be discourage in more ways... Cars for the average S'porean has become more of a status symbol that a real need... if the majority of S'porean don't 'die' from not owning a car... I strongly doubt its a 'real need'.

In return... Govt should take over all public transportation system... keep public transport cheap and effective. :think:

#### fotoudavid

##### Senior Member
solution...... must ask whether ppl at the top willing to get less money

#### Big Kahuna

##### Senior Member
Guys,

I am on MC today so I was thinking about the high COE problem. I have a solution and I want to hear the feedback and see if there is anything wrong.
I have no doubt because your idea is so simplistics....lol

The solution is to change the COE rebate amount to the average of the initial price and current price. Example, if I bought my car in 2009 for \$10k COE, now if I scrap my car, the rebate amount will be (\$10k+\$80k)/2 * 70% = 31.5k instead of just \$10k * 70%= \$7k

The exact ratio 50% bought and 50% current price can be fine tuned but the idea is tie the COE rebate to current COE prices.

WHY???
Why should gov(in a way public) paying you \$21k more when you only paid \$10k for your COE? You already enjoyed your car for 3 years where else an average Joe has been slogging MRT and SBS before 7.30am just to enjoy another \$0.50 discount on their daily commuting....and now you are demanding these avg Joes to pay you \$21k more because you are not happy with the COE system which in actual fact they won't give a damn since they never intend to own a car in a million years anyway

Because the COE is a totally whacked up market. Normally when prices go up, demand will go down because people cannot afford and SUPPLY will go up as the higher selling price will encourage more people to sell. COE is screwed up because when prices do up, only demand goes down. Supply remains the same or even goes down depending on government policies.
Singapore is very unlike big country such as Msia or US.....Whether high demand or low demand....it won't change in market except the on the road car price.....and car seller will not sell more cars because the quotas are peg to gov policy to raise x% of vehicles on the road.....there is only that many certs available every month....so it's dog fight between car seller A and car seller B to see who can secure more customers

For my solution, EVERYONE WINS!!!

1) The COE seller WINS because to him, he does not really need a car. He just bought a 50k hyndai 3 years back because cars is so cheap. He does not mind selling it for 55k now.
2) The new car buyer WINS because there is more COE quota on the market. Straight away you can help to bring to prices down a little
3) the government also WINS because they have more COEs to sell. They buy back at 50% discount and sell at 100% price.
4) current car owners WIN because the net number of cars does not go up and it encourages those people who don't really need to drive to take public transport.
5) Speculation will be minor because the government buys it at 50% discount and COE by its nature depreciates at 10% per annum so it is REALLY hard to make money unless COE prices go up like 30% a year or something.
6) it also discourages people to sell their COE when COE prices fall limiting fluctuations in COE supply.

This solution will be popular too because everyone wins. It solves the problem of the inefficient COE market. There are many cars out there who have COEs bought at 10k and are willing to sell their COE at 40k. There are many new car buyers who is willing to pay \$80k for new COEs. The problem is there is no way for the seller to sell his COE to the buyer. So why does not the government be a middle man and grabbed up all the old COEs at a discount and sell it to the new car buyers keeping 50% as commission.?

EVERYONE WINS??
1) Rich people can manupulate the market because they can sapu all the 1,000 certs at \$80k now....6 months later when the the price raised to \$200k....they will offload to suckers
2) The new car buyer will LLBP to buy the \$200k coe because he needs a car badly
3) The gov always loose because you paid \$10k and demanded \$31k after 3 years
4) Current car owner will not be affected unless you sell your car and don't drive now.
5) There is always speculation in any system be it big or small
6) When the 10 years is due, it does not matter you want to sell or not because you have to start all over again

For people who wants to sell their car for whatever reason....they will sell it regardless....it won't be because COE is high or COE is low....for example if you are migrating or gantung license .....there is no point to own a car anymore....some even have to sell it at huge lost......and buyer will value your car at paper value.....not current COE value....high COE only warrant some valuation bonus but not the (high COE) minus (low COE) differences

#### dniwkh

##### New Member
I have no doubt because your idea is so simplistics....lol

Why should gov(in a way public) paying you \$21k more when you only paid \$10k for your COE? You already enjoyed your car for 3 years where else an average Joe has been slogging MRT and SBS before 7.30am just to enjoy another \$0.50 discount on their daily commuting....and now you are demanding these avg Joes to pay you \$21k more because you are not happy with the COE system which in actual fact they won't give a damn since they never intend to own a car in a million years anyway
err.... because the gov (public) is NOT paying the \$21k... The gov will release the COE he bought at \$80k in the next COE bidding. In the sense it is the next car buyer who pays for the \$21k not the gov (public). The gov actually makes money by collecting comission as he bought at a discount (never paid market price). Think about it as making a new market to connect the buyers and sellers. Some of us don't really need to drive and will be willing to give up our COE for a price. Some REALLY want a NEW car. Current situation there is not way for the buyers and sellers to connect. (this is a win-win as both buyers and sellers are happy with the price)

1) Rich people can manupulate the market because they can sapu all the 1,000 certs at \$80k now....6 months later when the the price raised to \$200k....they will offload to suckers
2) The new car buyer will LLBP to buy the \$200k coe because he needs a car badly
3) The gov always loose because you paid \$10k and demanded \$31k after 3 years
4) Current car owner will not be affected unless you sell your car and don't drive now.
5) There is always speculation in any system be it big or small
6) When the 10 years is due, it does not matter you want to sell or not because you have to start all over again
I am also worried if this scheme is open for speculation as that was THE MAIN reason why COE rebate is set at the initial price.

Maybe we can add a scheme that this rebate works only after you hold your COE for 3 years. In that case it is almost impossible to manipulate the market as you have to grabbed all the 1000 COEs every bidding, that is 24000 COEs a year, 72k COEs for 3 years. After taking into the depreciation of 30% after three years, the COE price has to rise by 84% for you to just BREAK EVEN. For you to make a pathetic 10% profit over three years, the price has to go up by 104%, making speculation a folly for all.

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#### edutilos-

##### Senior Member
I think first and foremost, you must acknowledge that no scheme is perfect.

You did compare this briefly with the existing scheme (I don't quite understand some of the comparisons though) but it's a rosy picture with no acknowledgements on the shortfalls of your scheme and why these shortcomings are more acceptable than the shortcomings of the existing scheme, big picture and all. That would make your analysis a lot more convincing.

By painting a "perfect" picture, anyone can waltz in and comment and poke holes at your "perfect" scheme, because perfect it ain't. Fact of life. Just my quick 2 cents (this doesn't go to say that I agree with your scheme, because I don't really understand it or why it's better).

#### dniwkh

##### New Member
I think first and foremost, you must acknowledge that no scheme is perfect.

You did compare this briefly with the existing scheme (I don't quite understand some of the comparisons though) but it's a rosy picture with no acknowledgements on the shortfalls of your scheme and why these shortcomings are more acceptable than the shortcomings of the existing scheme, big picture and all. That would make your analysis a lot more convincing.

By painting a "perfect" picture, anyone can waltz in and comment and poke holes at your "perfect" scheme, because perfect it ain't. Fact of life. Just my quick 2 cents (this doesn't go to say that I agree with your scheme, because I don't really understand it or why it's better).
I am ok with people poking holes at the scheme. It might shows what I have not considered, example the problem of speculation. I tackle the points brought up and ignore the snide comments lah...

The main adv of this is that it helps the government comes up with more COEs to sell in the near term. Government is unwilling to release more COEs because it causes congestion which I agree with. But the high prices of COE is probably causing pain to some sections of the population. I don't really see why shouldn't the government offer a sort of "buy back" COE scheme pegged to a percentage of today's prices to entice people who have bought \$10k COEs to give up their cars.

#### pinholecam

##### Moderator
Staff member
My solution :

No such thing as private cars.
All cars will be owned by gov or sub-out.
All such cars will be coin-operated.
Who needs a car for a while, just pop into a coin-op car and 'tong' \$.
Finished, just park anywhere since someone else who needs it there will just board and use.

Saves COE/taxi/parking/ownership/ERP/etc problems.

#### dniwkh

##### New Member
Save the environment and reduce road building in S'pore... unless you need a car for business purposes (transport service, delivery etc...), car ownership should be discourage in more ways... Cars for the average S'porean has become more of a status symbol that a real need... if the majority of S'porean don't 'die' from not owning a car... I strongly doubt its a 'real need'.

In return... Govt should take over all public transportation system... keep public transport cheap and effective. :think:
I am not advocating increasing the number of cars. My scheme has the same number of COEs vs present situation. Improving public transport is always a good idea and it is not mutually exclusive to what I am suggesting. Given the number of COEs we have, how do we make the COE scheme more efficient and less subjected to big fluctuations like \$10k in some years and \$80k in others.

#### philip113

##### New Member
Hi if you're on MC please rest don't think so much

#### diver-hloc

##### Moderator
Staff member
I am not advocating increasing the number of cars. My scheme has the same number of COEs vs present situation. Improving public transport is always a good idea and it is not mutually exclusive to what I am suggesting. Given the number of COEs we have, how do we make the COE scheme more efficient and less subjected to big fluctuations like \$10k in some years and \$80k in others.

Not saying you are... but never the less... I believe that S'pore's small size could ill afford more cars or even the current 'growth' of cars. :think:

#### edutilos-

##### Senior Member
I am ok with people poking holes at the scheme. It might shows what I have not considered, example the problem of speculation. I tackle the points brought up and ignore the snide comments lah...

The main adv of this is that it helps the government comes up with more COEs to sell in the near term. Government is unwilling to release more COEs because it causes congestion which I agree with. But the high prices of COE is probably causing pain to some sections of the population. I don't really see why shouldn't the government offer a sort of "buy back" COE scheme pegged to a percentage of today's prices to entice people who have bought \$10k COEs to give up their cars.
But why would having more COEs to sell result in no change in car population? This part, I don't understand. Sorry, I'm not a car owner and have not looked at the car market, so perhaps you could explain this part in more detail to hapless souls like myself.

#### edutilos-

##### Senior Member
My solution :

No such thing as private cars.
All cars will be owned by gov or sub-out.
All such cars will be coin-operated.
Who needs a car for a while, just pop into a coin-op car and 'tong' \$.
Finished, just park anywhere since someone else who needs it there will just board and use.

Saves COE/taxi/parking/ownership/ERP/etc problems.
You aren't serious, right? The administration would be a huge headache. I can foresee people hopping on coin-op cars and dropping it around Lim Chu Kang in droves just for laughs. :bsmilie: Even if that doesn't happen, over time, you're bound to encounter issues of placement of the cars in remote areas over longer periods of time, and ensuring that they are brought back into "normal circulation".

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#### diver-hloc

##### Moderator
Staff member
You aren't serious, right? The administration would be a huge headache. I can foresee people hopping on coin-op cars and dropping it around Lim Chu Kang in droves just for laughs. :bsmilie: Even if that doesn't happen, over time, you're bound to encounter issues of placement of the cars in remote areas over longer periods of time, and ensuring that they are brought back into "normal circulation".

I'm more worry of fight over cars with 'lucky number' like those with 8... and cars with lots of 4, no one take... LOL :bsmilie:

#### edutilos-

##### Senior Member
I'm more worry of fight over cars with 'lucky number' like those with 8... and cars with lots of 4, no one take... LOL :bsmilie:
No la, Singaporeans are quite modern nowadays... Some will care, but most won't I think.

#### hazmee

##### Senior Member
Using Mah Bow Tan's logic and strategy of solving problems: Balloting. :bsmilie: :bsmilie: :bsmilie:

#### silencer13

##### New Member
My solution :

No such thing as private cars.
All cars will be owned by gov or sub-out.
All such cars will be coin-operated.
Who needs a car for a while, just pop into a coin-op car and 'tong' \$.
Finished, just park anywhere since someone else who needs it there will just board and use.

Saves COE/taxi/parking/ownership/ERP/etc problems.
lol! Such a thing already exists. It's called bus, mrt and taxi.

#### 9V-Orion Images

##### New Member
There was a PTC / LTA national campaign not to long ago encouraging Singaporeans to switch over from private to public transport, obviously it has little influence on the general public.

Interesting to note that some of the world's oldest, most obnoxious and nastiest rapid transit systems IMHO in megacities such as the Moscow Metro, NYC Subway, Paris Metro and The Tube are also the most efficient. Of 8.245 million New Yorkers, only 30% commute via privately owned automobile daily. Perhaps PTC / LTTA can take a leaf out of their learning experiences, also not to mention the truly world-class Hong Kong MTR.

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