COE trends

[cteo101]

PQP is prevailing quota premium, i believe thats the cost to renew and existing coe.

so should be looking at QP numbers for new cars

[dicky]

cteo101:

PQP is prevailing quota premium, i believe thats the cost to renew and existing coe.

so should be looking at QP numbers for new cars

If that's the case, COE dropped. Yyyyeeeesssss.........

Am waiting the drop to change our car leh. :oops:

[cteo101]

hahaha, time to start prowling sgcarmart lol

[dicky]

COE is coming down (3x),

COE is coming down, my DH...

Good news, else difficult to make my DH change car leh... :imcool:

[atrecord]

unless got another recession, else i dun see COE dropping significantly anytime soon.


given the already crowded roads, govt is unlikely to change the formula for car ownership or allow a bigger increase each year. with COE (hence new cars prices) being so high, more existing car owners will continue driving old cars and not scrap them. With fewer scraps, there will be fewer COEs put back into the pool of new COEs available, so the number of COEs per month will not change.

Now the trend is every month will see more people wanting to buy new cars, than the number of COE available. As a result, demand more than supply so premium is sky high.

We assume demand is pretty constant (dynamics playing it out), so if supply doesn’t increase, premium should stay high. If there is recession, demand will likely decrease, and premium will drop.

During 2005-2009, the demand was not likely very different from now (again, the dynamics at play), but the supply was much higher then, so the same number of buyers each month had more COEs to bid, hence didn’t have to pay so much to succeed.

Until the COE numbers increase, or there is a recession, I think the premium will remain around there.

Oh, if govt changes rules again, to limit loan to 70% again, then demand might again go down…

So looks like i will have to drive my 06 car till 10 yr old…

[MadScientist]

atrecord:

unless got another recession, else i dun see COE dropping significantly anytime soon.


given the already crowded roads, govt is unlikely to change the formula for car ownership or allow a bigger increase each year. with COE (hence new cars prices) being so high, more existing car owners will continue driving old cars and not scrap them. With fewer scraps, there will be fewer COEs put back into the pool of new COEs available, so the number of COEs per month will not change.

Now the trend is every month will see more people wanting to buy new cars, than the number of COE available. As a result, demand more than supply so premium is sky high.

We assume demand is pretty constant (dynamics playing it out), so if supply doesn't increase, premium should stay high. If there is recession, demand will likely decrease, and premium will drop.

During 2005-2009, the demand was not likely very different from now (again, the dynamics at play), but the supply was much higher then, so the same number of buyers each month had more COEs to bid, hence didn't have to pay so much to succeed.

Until the COE numbers increase, or there is a recession, I think the premium will remain around there.

Oh, if govt changes rules again, to limit loan to 70% again, then demand might again go down...

So looks like i will have to drive my 06 car till 10 yr old...

Hey bro, you driving a Stream or Toyota? Your nick is very familiar... Almost as if we did \"meet\" before...

Anyways, am quite confident that you should see a chance in about 3 years time, so get ready!

[atrecord]

MadScientist:

Hey bro, you driving a Stream or Toyota? Your nick is very familiar... Almost as if we did \"meet\" before...

Anyways, am quite confident that you should see a chance in about 3 years time, so get ready!

Yup, yours is familiar too I drive a toyota wish.
Pls share where did you get the confidence from. If really so, then I'll get ready... car would be 8-9 yo then, just abt right time to explore...
tks.

[dicky]

Ours 05 car… DH think is like govt maintain car quota, and then plus 1/3 to 1/2 of the boom years of 2003 - 2007 scrap cars, resulting more COE available then now… Seems that COE from scrap cars govt dun take back? They only increase or decrease the additional new COE? I abit blur…

[atrecord]

dicky:

Ours 05 car.... DH think is like govt maintain car quota, and then plus 1/3 to 1/2 of the boom years of 2003 - 2007 scrap cars, resulting more COE available then now.... Seems that COE from scrap cars govt dun take back? They only increase or decrease the additional new COE? I abit blur......

Err... what did you mean when you said \"resulting more COE available then now\"? Did you mean 'then' or 'now'?

Govt has this unique formula, where they allow car population to grow only a small percentage every year. Each COE lasts 10 yr. So in theory, if everybody loves their cars and hold it for 10 yr and not sell/scrap; then in the 11th yr, there will be maybe just a few COEs available every month.

The reason why all along there are a few hundreds/thousands of COEs per category per fortnight now (and in the last 10-20 yr) is because there are cars being sold and some scraped every year. Once they are scraped, the COE goes back to the govt pool, which per their formula, will be added to the no. of COEs up for bidding after i think 6 mth or 1 yr. So the more number of cars being scraped, the more COEs will be available 6-12 mths later. The converse is true too, obviously.

Back in the mid 90s, when COEs hit >$100K, owners will scrap cars once COE drops to, say, $40K (assume after 5 yr). When they do so, govt gives them back $50K for the balance of the COE unused. So with the $50K taken back, they can buy a new car - pocketing $10K and extending the lifespan of a car for another 5 yr in the process.

This was repeated during late 90s (when COE was $20-30K) to 2005 (when COE dropped to ~$10K), for the same reason. During those periods, people figured out there's no point holding on to an ageing car, so all scraped and changed. There is a 'vicious cycle' in play, as more people scrap means more COEs available, means COE premium drops further, means the cycle repeats (maybe the quantum becomes less drastic).

Now that the COE is on the upwards trend, owners will figure out that there is no point in changing to new cars (and it is v expensive), so will likely hold on to the ageing cars, resulting in less cars being scraped and therefore less COEs available, which in turn means premium sure soar, and the cycle too repeats...

[MMM]

Just want to get some perspective.


I also heard that due to the high no. of COE issued at certain year, in 2-3 years time, there will be a higher availability of COE as some people decide to scrap their car when it's 10 yrs ago. By then the COE is expected to drop/ moderate. On the other hand, I am unsure if the government might change their formula and some of these \"scrapped cars\" COE are not recycled back into the system since the objective is to cap car population. :?

Personally, I don't think COE will fall back to the old level. In any case.... we're already committed already. Too late to think about it.