SINGAPORE — Before the Certificate of Entitlement (COE) bidding exercise was suspended in April 2020 due to the circuit breaker imposed back then, prices for some of the categories were at lows that would not be seen again since.
SINGAPORE — Before the Certificate of Entitlement bidding exercise was suspended in April 2020 due to the circuit breaker imposed back then, prices for some of the categories were at levels that would not be seen again since.
The 31-year-old had bought a second-hand Honda Stream in 2017 near the end of its COE's 10-year validity, and so had to renew the certificate at the end of 2018.cars like his were at about S$32,000. However, he had been juggling part-time work with his studies back then, and so did not have sufficient savings to foot the cost of the entire COE.
“Being a parent, sometimes you will have four bags, one stroller and a kid to carry while using your phone to navigate.” He had thus looked into buying either a second-hand car or an “entry-level” car, but as COE prices rose further and further, Mr Yap is now undecided whether it’s worth getting one. With COE records being broken every fortnight, perennial questions over the merits and limitations of the system — such as whether it is working as intended, or needs an overhaul altogether — have been raised by motorists and transport experts alike.
The same phenomenon was observed in 1994, when COEs for luxury cars 2,001cc and above reached an eventual high of S$110,500. Back then, the Government intervened by limiting car loans, as well as imposing tighter transference policies. “I think that we will grumble a lot about it, as we are doing now, and this will continue till late 2024, and then we will forget about it due to the expected surge in COE supply then… Then, we'll restart this debate 10 years from now,” the associate professor from the Singapore University of Social Sciences said.
Mr Loo said that during the Covid-19 period when COE prices were low, only about 10 per cent of his buyers were those he considered as “super rich”, and could afford to pay for the vehicle upfront without loans. These include the BMW X1, a sports utility vehicle with a 1,499cc engine that produces 90kW of power. Its list price, inclusive of COE, is S$260,888.
Experts agreed that the supply of COEs has to be smoothened out so that pricing is more moderate and stable over a longer period of time. “It means that consumers can't respond to technological advances in the car industry, such as electrification, which has greatly improved the safety, power and efficiency of cars today compared to even just five years ago,” Assoc Prof Theseira said.
They also feel that the COE system allows the rich to outbid the average consumer, hence making cars less accessible to the masses. He said that the accessibility of loans has enabled buyers who cannot pay for their vehicles upfront to jump into the pricey automobile market. For him, the vehicle is something that is “good to have” as it adds convenience to his life. The hustle and bustle of a cosmopolitan lifestyle also adds to the pressure to own a car to facilitate the ease of moving about between social gatherings, work, and running errands.
Like Mr Tan, the interior designer, Mr Suryawinata’s concern is that when he starts a family with his wife, there will be added inconvenience in running errands or going on family outings without his own car. “Our interpretation of the behaviour is that felt that, having spent so much money, they ought to make full use of their cars,” said Distinguished Professor Ivan Png from the School of Business and Departments of Economics and Information Systems and Analytics at NUS, who was part of the study.“Controlling the number of vehicles is not the right way, controlling usage is the correct way.”
“All these measures will take time to be effective and I think we should allow these policies to have greater impact in the mid and longer term.” These range from imposing additional costs on those who buy more than one car to putting a cap on the private-hire vehicle fleet. “It would be a differentiator between those who can buy the first car and those who own more than one car, with a tiered additional car fee for the ."
Suggestion #3: COE rebates for certain groups that really need a car, such as young families, or families with elderly or people with disabilities “We need more data to evaluate if there is indeed a need on a daily basis or on a seasonal basis to evaluate the viability of this option.” “As PHV services a much wider population as compared to car-owners, it may be in fact, for the better of society, to not put a quota on PHV population,” he added.
He said that what is being bid is either a ratio or percentage of the car’s open market value, but this might not stop ultra-rich buyers from increasing the bid despite the exponentially higher costs of buying a luxury vehicle. Mr Loo, the car dealer, said that the categorisation of Category A and Category B is"no longer relevant" as there would be buyers of higher-end car models purchasing cars in Category A, which he believes should be meant for more affordable models.
He added that even if the classification was refined and done by car brand instead, this would also be unfeasible, as most brands produce a range of cars to cater to a diverse consumer profile. This is because the COE value of the remaining duration left for the car is immediately redeemable if the car is scrapped.
However, Assoc Prof Theseira said that there exists a market practice offering"100 per cent car loans", which appears to circumvent the MAS regulatory limit. The main usage measure was the Area Licensing Scheme which began in 1975 to limit traffic in the central business district, and eventually evolved into the Electronic Road Pricing system.
Under this system, each motorist or motor dealer, who wants to own a car or other vehicle would have to bid for a COE for that category of vehicle. The COE can be renewed for a further five or 10 years by paying the prevailing quota premium if the car owner decides to keep the vehicle for more than 10 years.
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
The Big Read in short: Should COE system be tweaked amid record prices?SINGAPORE — Before the Certificate of Entitlement (COE) bidding exercise was suspended in April 2020 due to the circuit breaker imposed back then, prices for some of the categories were at levels that would not be seen again since.
Read more »
Mihoyo's new video game tops download charts as big launches return to ChinaHONG KONG : A new game released by 'Genshin Impact' developer miHoYo this week has become China's top downloaded app, reflecting pent-up demand as gaming giants restart flagship launches with a crackdown on the industry easing. The blockbuster debut bodes well for several other games due to launch this su
Read more »
Australia reboots climate scheme, targets big pollutersThe revised emissions reduction scheme will put a price on carbon and allow trading of carbon offsets between polluters. Read more at straitstimes.com.
Read more »
Liv Golf stars set for big test at Sentosa’s Serapong course - Singapore NewsSingapore is the fifth stop in the Liv Golf League, and Ian Poulter, who won the 2009 Singapore Open, is excited to return and play a tournament here again
Read more »
Asian Insider: Whither cross-strait relations | True crimes of AsiaRead more at straitstimes.com.
Read more »
Google Flights reveals the best time to book airfares for the cheapest pricesRead this first if you’re planning to book that year-end holiday.
Read more »