Monday, March 4, 2013

Whither Car Ownership?

Car buyers were whacked on two fronts after Budget 2013. New car loan limit of 5 years, down payment of at least 40 per cent of the purchase price. Additional Registration Fee (ARF) of 140 per cent for bigger cars. With the quota of cars allowed on the roads continually decreased while the population numbers are kept growing, can the Certificate of Entitlement (COE) offer any respite?

The theory behind the COE is that, instead of raising taxes to discourage vehicle buyers, the Government sets a quota on the number of vehicles that can be put on the road at any time, and leaves it to market forces to price the COE via a fortnightly auction.

Bidding for a COE can be effected by motor dealers, or individual car buyers at an ATM, as long as you have $10,000 in your bank balance. 9 out of 10 buyers let the motor dealers bid for their COE because dealers set different prices for cars sold to buyers who supply their own COE and those who take up one of their packaged deals. The difference is not a simple arithmetic of deducting the COE price from the package deal price. Let the greedy dealer explain that.

After all bids are received, the lowest successful bid submitted in a tender is the price everyone in the same category pays. For instance if there are 100 COEs available in a category, and bidders make bids from anything between $1 and $100,000, the 100th successful bid from the top becomes the COE price.

Naturally the dealer with a quota of cars to unload will bid as high as he can, since the customer has left him the task of securing the COE. Ditto the sports car fanatic with money to burn - what's a $150,000 COE bid compared to the price tag on his exotic marque? It is not difficult to imagine these characters with deep pockets are yanking the COE higher and higher.

The original reasoning for opposing a "pay-as-you-bid" tender system was that bidders are likely to over-estimate the value of the COE, and thus end up over-paying. Similar logic like senior citizens are likely to blow their life savings on a spending spree, to justify the Minimum Sum and all sorts of excuses to avoid the CPF payouts. Well, the rationale originally cited for the introduction for the COE was supposedly to avoid raising taxes to discourage vehicle buyers. Guess what, taxes have been raised. Maybe it's about time we make the buggers with the fat wallets pay at their submitted price level, instead of the lowest successful bid. Drastic times require drastic measures.


  1. /// Maybe it's about time we make the buggers with the fat wallets pay at their submitted price level, instead of the lowest successful bid. ///

    How are you going to make this happen?
    Vote Opposition?

  2. Only the most greedy and self serving government will implement something like COE. There is only one such government in the entire world. Bloodly hell, singaporeans are so unfortunate to end up with the one. Owning a car is a realistic dream for anyone who work enough.

    1. "Unfortunate" or "dumb" or "lucky" (the only one of its kind in the whole world, even strike 4D cannot compare leh)? Many rich ang moh traders on Bloomberg commenting on the Hong Lim protest by William Pesek, they think you sheeple have nothing to complain about, with such a good garment and so many rich foreigners here to bless your lives with more taxes and create so many jobs, still want to complain?

  3. Consequentially, we can imply that our PAP Ministers wanted the car dealers to think of their own self interests first instead of those buyers they are supposed to represent when it comes to COE bidding especially when they are also competing to become the top Brand Name in terms of sales.

    So if I am one of the car dealers, do you really think I care more about the poor buyers or my sales target when I put in their COE bids?

    1. The PAPigs can then argue that it's a fair system that everyone is paying the same price for a COE pretending to ignore the fact that those richer ones are actually paying the same price od what those poorer ones has bidded.

      Meanwhile their infamous motto "Get out of my uncaring face" lives on.

    2. "everyone is paying the same price" no longer applies when the income divide is so huge. Right now every thing, from groceries bill to the mortgage repayment, is a percentage of take home pay. That's why the million dollar salaried ministers never truly understand the pain of the ordinary man.

  4. Who owns:
    Performance Motors?
    Borneo Motors?
    Cycle & Carriage?

    and even the smaller dealers?

    Just follow the dots.. and you'll know why the system was designed as such. Sure you can DIY to get your own COE, import the vehicle and get it passed by LTA. But, no agent service for you mate.

  5. Another Singapore Fairy Tale .... ???

    The rich people cares about the poor and middle class Singaporean.
    You PAP MP cares about you.

  6. Oh, the COE wasn't that to be scraped once ERP was implemented? They even promised to scrape road taxes and ARF with ERP. No wonder they are so anxious to replace the ERP with GPS! Like AIMgate, once the old system is gone, nothing to complain - the ERP would soon be history, just like AIM, and all promises no longer valid. At least when the ah tow legal expert is on your side right?

  7. PAP use of money as a deterrent serves only their own pocket. We are forced to pay for everything, COE, ARF, GST, ERP, Road Tax, TV Licence (OK, this was removed but after many years and so many compliants made), Income Tax, Viacom vehicle testing, Property Tax,Maid Levy, Workers Levy.....................

  8. The trouble with the PAP is that they know there is nothing citizens can do when they make use of our small size, create a big population and make lots of money punishing citizens with expensive everything for survival, from housing to being sick and dying. This is what they call paradise and swiss standard of living. Welcome to reality!

  9. Khaw: High quality of life still possible with larger population.

    What a bull-shitting asshole. At 5.4 million people, car ownership, one of the yardsticks of quality of life, is already priced out of the reach of the average Sinkie.