Hi Ben
I'm curious.
Why are you upset about the COE prices?
a) You are looking to buy a new car
b) You are looking to buy a new car in the near future
c) You are troubled by what you think is unfairness in society
d) ?
Personally, I'm very happy if COE prices can go to 100k or even 150k to 200k. I plan to buy a car in 2016.
The Straits Times
www.straitstimes.com
Published on Jan 10, 2013
Lui: No plans to put off cut in car population growth rate
By Christopher Tan
The Government will stick with its plan to cut annual vehicle population growth to 0.5 per cent from 1 per cent from February, said Transport Minister Lui Tuck Yew.
Speaking on the sidelines of a visit to SMRT's Bishan depot Thursday morning, Mr Lui was asked about the record Certificate of Entitlement prices. Category A premiums for instance, breached $92,000 at the latest tender on Wednesday - the highest in history.
Mr Lui in response said that 45 per cent of households here already own at least one car, and noted that there may not be much more room for a higher percentage since "about 12 per cent of space" is already occupied by roads.
He said the high COE prices was not only a function of supply - the smallest since the quota system started in 1990 - but also the robust economy and people's ability and willingness to spend. Mr Lui added that he has asked the Land Transport Authority to look into whether the newly-introduced Carbon emissions-based Vehicle Scheme (CEVS) - which accords lower emission cars rebates of up to $20,000 - had led to more aggressive COE bidding.
LTA should really consider tweaking the current COE bidding system to allow only buyers of new cars to bid on their own, and not through the car dealers; and the car dealers should not be allowed to bid for COEs on their own account.
Since COE has become a crazy tax - where the new car buyers or taxpayers are in effect paying a specific 10-year consumption tax in advance, and the tax amount is actually determined by the car dealers as direct bidders for the COEs on one-hand, and LTA as the supplier-regulator of the number of COEs in each bidding on the other - I think it is also high time that our smart bureaucrats in MOF and MAS, and their political masters, start thinking about the morality and financial prudence aspects related to allowing new car buyers to borrow, and licensed banks and other financiers to lend to them, the huge amount of loans which ultimately enable LTA to collect such obscene amount of COE taxes every forthnightly.
If our smart bureaucrats in MOF and MAS, and their political masters, have the right moral sense, and the rational mind to understand that loans lent out by licensed banks and other financiers related to the COE tax portion of the new car prices actually do not have any tangible value in the underlying security as backing or collateral, they should simply disallow the banks and other financiers to lend on the COE tax portion altogether. Alternatively, they should require the licensed banks and other financiers to treat and lend the COE tax portion as a separate loan, which should be subject to more stringent credit acceptance criteria, and more conservative loan parameters - i.e. small percentage of financing, shorter loan tenure, or higher financing interest rates.
I guess sooner or later, the COE system and the related lending practices from licensed banks and other financiers will become a big political issue for Singaporeans, as clearly the present system and practices are not serving the majority of Singaporeans well, or doing them any good.
With the COE prices so high, can't you see how heavily subsidized our public transport is?
(10-01-2013, 03:39 PM)dydx Wrote: [ -> ]Alternatively, they should require the licensed banks and other financiers to treat and lend the COE tax portion as a separate loan, which should be subject to more stringent credit acceptance criteria, and more conservative loan parameters - i.e. small percentage of financing, shorter loan tenure, or higher financing interest rates.
I completely agree with you on this.
Abolish the $0 downpayment and 10-year loan tenure scheme. It is putting everyone in debt across the island!
And yes make the COE not part of the financing, just like the COV for properties.
Quote:small percentage of financing, shorter loan tenure
This is likely to be more effective than implementing self bidding.
But, this ruling will benefit the richs since they do not need any loans.
So, we will see more Mercs and BMWs on the street.
(10-01-2013, 04:08 PM)yeokiwi Wrote: [ -> ]So, we will see more Mercs and BMWs on the street.
Sorry, I just had to add: as if there are already not enough of these on the roads right now!
(10-01-2013, 04:08 PM)yeokiwi Wrote: [ -> ]This is likely to be more effective than implementing self bidding.
But, this ruling will benefit the richs since they do not need any loans.
So, we will see more Mercs and BMWs on the street.
The rich are also less affected in the current system anyway.
Letting buyers bid for their own COE plus a tight control on COE financing is the right way forward. In fact I advocate zero financing on COE. And LTA should consider segregating COE category not by CC but by its brands or luxurious level. Govt do not differentiate a HDB from EC from private condo by its size, but by its targeted market segment, so why not do the same for cars? More quotas can be allocated to the mass market segment than to the luxurious segment, but in general the bidding system should be the same for all categories, just to be fair. A luxurious car will not take up much more space or be more pollutant than a mass market sedan.
Will this system works? Not sure, but presumably the rich will mostly bid in the luxurious car segment and compete against the other rich. Millionaire/billionaire will be keener to buy a Rolls Royce than a Toyota I guess.
In this way COE prices in the luxurious segment will naturally or inevitable be more expensive than the mass market (due to lesser quota + richer buyers), and the system is fairer than the one we have now.