Sunday, October 16, 2011

Why bid for the car COE?

Dear Mr. Tan
I spoke to numerous people, but did not get an answer that is acceptable. I have been struggling to understand the rationale for the COE bidding exercise. Surely, a balloting for the COE could achieve the same objective of limiting the no. of COE. That is, if the government fix the COE price at a reasonable amount (which could be adjusted periodically), and use balloting for the no. of COE, the same quota would be achieved as well. 

Why is there a need for Bidding, which for whatever reason result in the sky rocketing of the price. In other words, the control of the car population do not have to result in the people paying exhorbitant prices for a cars. Unless the government is all out to make money, which I thought that is not the intent.


REPLY
my personal preference is to have a balloting exercise, instead of bidding for the COE. But our Government believes that bidding (and money) is the best way to allocate scarce resources. I do not agree with their approach, but they are the Government!

If we go on the balloting exercise, there is still a problem. Many people will ballot for the COE and resell the car to the highest buyer. So, the Government decided that the best way to prevent this "black market" is to go bidding in the first place, and let the market decide on who gets the COE.

19 comments:

Anonymous said...

When you ballot, it creates a whole new set of problems. Remember what happened to NDP tickets when they balloted. People balloted for it without the intention of going and then tried to sell it off on the internet.

Anonymous said...

At the same time COE should be paid in cash. Car loan should not cover the COE portion. This would result in better financial prudence.

Anonymous said...

A simplistic viewpoint:

The government's stand is that car is a luxury good, as much as PM Lee acknowledged that it may be the desire for many people.

If this is the case, the current policy naturally follows through. For luxury goods, it is up to people to decide how much over the odds they want to pay, given the limited capacity our landspace and transport infrastructure can absorb.

Anonymous said...

make foreigners and PR pays 50% more for COE

Vincent said...

COE balloting can implement regulations like our HDB. 5yrs cannot sell the COE. :-)

Anonymous said...

To prevent the black market from profitting, the successful COE bidder has to register the car under his name and cannot transfer or resell the car for the next 2 years. If he needs to sell the car due to unforseen circumstances, he has to meet certain criteria stipulated and approved by LTA.

Anonymous said...

If HDB flats can be balloted, I do not see any problems with COE being so too. All you need are some rules e.g cannot be transferred to another party. Unwanted COE must be sold back to LTA ( minus admin costs ) for future ballotting.

But of course, not much money would go to the govt's coffer. Also, very wealthy people would not be happy, as they would not be able to own several cars.

A better solution is to have roofed- bicycle lanes, cooled by solar-powered coolers, and safety barriers separating them from cars and lorries. It would be healthier for all, including senior citizens! Wouldn't that make more sense than trying to control vehicle population through COE, ERP and satellite-based GPS ERP etc...etc.

Anonymous said...

Both bidding and balloting can/will result in the "controlled" numbers of vehicles the garmen wanted, if they wanted it. The difference is that:
bidding = $ into garmen's coffer
balloting = $ into "investor's" coffer.

Whatever thing that has benefit, can be sure that normal people will not get a share.

The said...

/// That is, if the government fix the COE price at a reasonable amount (which could be adjusted periodically), and use balloting for the no. of COE, the same quota would be achieved as well. ///

If you understand what capitalism is all about, you would not be asking this question.

Every one wants all the good things in life. The supply is limited, but the demand is unlimited. So, how to allocate? Best means is through the price mechanism - willing buyer, willing seller. Effective demand is having the $$$ to back up your demand.

By your argument, by balloting, why bother to fix the COE at a reasonable amount? You can fix it at $0 as the supply is fixed by balloting. No need to adjust periodically.

By balloting, every father, mother, son and daughter will try for the ballot. Even if they do not intend to own a car. And if you get win the ballot - yes, you literally win the lucky draw. Then you can sell the COE to those who needs a car. And guess how much is the going rate for such black-market transaction? Yes, of course, it would be around the prevailing COE prices because that is the outcome of the supply/demand interaction.

What, you think the govt stupid or what? Let you pocket the COE premium instead of going into state coffers.

rotisiv said...

Car is not a luxury item for a family, because having a car will improve the quality of living for a family.

But a second car is a luxury.

Hence each family of at least 4 members should be allocated a COE, FREE.

Then those need a second car will have to bid in the open market for the limited remaining COE, or buy from those who are willig to give up their allocated COE.

Anonymous said...

'That is, if the government fix the COE price at a reasonable amount' - Please, what is 'reasonable amount'?

You need the car badly - you bid for it. Fair and transparent!!!

Anonymous said...

Jokes - Changing Singapore (light bulbs)

How many PAP Members of Parliament does it take to change a light bulb?

Answer:
None. None of them want a new light bulb. They only want to change the old light bulb from within.

Anonymous said...

@ The

Your point about using the price mechanism to allocate scarce goods (eg COE) is well taken.

Another scarce goods is my vote. I think I will also use pricing mechanism to allocate my vote.

If COE price exceeds my reasonable price of $5,000, then I will vote Opposition.

Anonymous said...

The reason is very simple. Because we have a money face government. A rich man can own 8 cars under the current bidding system. This is a fact.

Anonymous said...

Vote opposition so you can get your COE below $5k? ya, you're not only voting for COE, but also traffic jams.
Look at those countries with no COE restriction, you will not be able to drive your car freely into town.

Ballot for the COE? why don't you ballot for those private properties so even the poor ppl can stay in it? what a joke.

No money? Don't drive!

Anonymous said...

@ ANON 2.04pm.

I agree.

I got no money.
So I can't drive.
And so I vote Opposition.

My problem is now government's problem.

No longer my problem.

And this is how you use your vote wisely.

The said...

/// rotisiv said...
Hence each family of at least 4 members should be allocated a COE, FREE. ///

So, a family of 8 can have 2 COEs and a family of 12 can have 3 COEs? What if those with large families do not want to own cars, or cannot afford to buy cars? Do we allow them to sell the COEs? At what price?

Anonymous said...

@ The

When the PAP govt. is ready for free allocation of COEs then we talk some more about the details.

Anyway, what's wrong with giving 3 free COEs to a family of 12?
I thought we are encouraging people to have more children?

You must learn to be more constructive in your criticism. Otherwise you won't be promoted by the PAP hierarchy.

Anonymous said...

@ ANON 2.04pm

"you're not only voting for COE, but also traffic jams."

I got no car. Why should I care if there are traffic jams? Not my problem.

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