I found that a car buyer can bid for the COE and, after being successful, is given 6 months to find a car. The deposit to bid for a COE for a car is $10,000 and the balance of the COE price is payable on the purchase of a car.
If you have $10,000 in cash, you can bid for a COE on your own and benefit from any drop in price. You may be negotiate a better price for a car, if you have a COE and can go to shop around. If you do not have $10,000 in cash, perhaps you should not consider buying a car?
In Singapore for some, especially younger people, I think getting a car goes beyond the economic and affordability factor.
ReplyDeleteIt is about matters like ego, pride, craving, urge etc which can be very hard to resist. People will go to any length and cost to attain and satisfy themselves for it. Which is of course very good for gahmen revenue and maybe car dealers.
Most will leave it to the car sales people to "package" for them. Its not that they do not have 10K cash.
ReplyDeleteA) unfamiliar with bidding system
B) prefrence for costs to be packaged into monthly portions.
C) Car sales are tied to promotional interest rates and freebies
Many do not bother about doing a cost anaylsis and comparison between the different ways of getting a car. It is instant gratification of the ego and status.
After all, it is the most visible symbol of displaying one's wealth.
You cannot bring your bungalow house all over town!
It is amazing how resilient the car market is in Singapore. It confirms the view that we need to show our status but not too loudly.
The cost of ownership is the highest in the world, and that probably spurs the wealth image:
"Despite the costs, I am still able to afford!!.. therefore, I have arrived!"
It is not easy to buy a car without COE,even from PI.
ReplyDeleteU usually have to pay an additional 20% more than the car(without COE) selling price.
Is it really that abnormal in Singapore not to own a car?
ReplyDeleteRex comments as follows,
ReplyDeletei wonder how much can be saved in terms of total or percent costs of everything including the car and registrations processes, if i bid for COE directly, compared to letting a car salesman handle all?
Just some ball park figure? (Assume i already fixed my eye on a particular common car model e.g. toyota WISH).
REX
I bidded for a COE, got it, and went shopping for a car. The COE price went up while i was shopping around.
ReplyDeleteA Honda dealer wanted to sell me a car based on Current COE package price minus my cost of COE. (bear in mind the COE price went up). He refused to sell me a car that is COE package price less current COE price.
I simply walked out and went to another dealer. There the dealer offered me a car less the current COE price, plus an additional discount. I managed to get a car at a good price so I gave him the business.
With a COE in hand you can shop around, and not held mercy by a particular dealer.
Usually, it is harder to buy a new car without an attached premium if you have your own COE.
ReplyDeleteThe cars are limited in quantity and car dealers would rather profit more from selling their package COE+car than selling a car(w/o COE).
To truly reflect market-based pricing, LTA should disallow bidding of COE by car dealers and it should be done solely by the prospective car owners.
Also, a tweak in the COE bidding system albeit at a losing advantage in revenue for LTA should be explored.
It should not be everyone paying the highest bid once the auction close. It should be paying the price you bid for if you are successful in the COE allocation. So, if 600 COEs are available for bidding and 100 owners feel it's reasonable for $100k COE, let them have priority, the rest of the 500 owners who feel it should be $20k will get allocated the remaining amount.
Many people view ownership of a car as symbol of wealth and status. It really need a brave decision to put someone's hard earned money on something which has a highly inflated price tag but poor economical value. A decent car is worth much less than the COE. It is not hard to discover many more opportunities without the burden of a car.
ReplyDeleteLoh
For me, taxis seem sufficient. I want to have some shut eye, so I don't want to be the one driving. Also, I try to avoid peak periods. During peak periods, there isn't much difference between taxis and MRT when it comes to service level.
ReplyDeleteOnly one conclusion: the government is laughing all the way to the banks.
ReplyDeleteLet's face it. Car salesmen are just like RMs from a bank and insurance agents. They earn a living out of commissions and perhaps a modest fixed salary. They make commissions on:-
ReplyDelete1. the landed price of the car
2. selling car insurance
3. selling a bank loan for the car
4. marking up the COE.
An increase in the COE price has an initial effect on the buying behaviour of potential customers. After a while customers will get used to the high COE price, and return to buy brand new cars in droves. History has shown this. Car dealers know this, and would make it disadvantageous for buyers to bid for COE on their own.
I think it is time the LTA mandates that these 4 elements be detached, separately priced, and explained clearly to the customer. Let the customer decide which of these items he wants the salesman to act on his behalf. This will keep costs down - good for the customer but not good for the salesman/govt.
I don't blame young people, especially young men wanting a car, even more than they would want a flat of their own.
ReplyDeleteMany Singapore girls these days place a premium on guys with a car. Well, some girls will argue with me on this, but do ask any of them which would they prefer, a guy with a car or one without, given all else being equal.
Pay what you bid, is perhaps the best way to keep COE price down. However, LTA said that it would create a problem as COEs of the same bidding period would be of different amounts. One wonders what problems that could not be solved?
Remember once LTA said that it was almost impossible to return the monetary value of a PARF if the owner does not want to buy a car anymore? At that time, such owners had to sell the scrap cert to a dealer at a discount. Now it is POSSIBLE!
If riding a bicycle is not so dangerous in Singapore, I would encourage people to take up cycling instead of buying a car.
ReplyDeleteI do not mind a guy not owning a car as long as he can afford to pay for taxis.
ReplyDeleteShopping around with your own COE is never easy.
ReplyDeleteI had my COE and was shopping for a car. No one gave me a good deal except Hyundai. Last minute, I extended the validity and booked a Hyundai and now I regretted.
You will have limited choice when you bid your own COE. You will be lucky if the dealers wish to discuss with you.
I am now stuck with a Hyundai which many components failed prematurely.
Actually, you just need $5000 to bid for a COE, not $10000.
ReplyDelete