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(17-05-2013, 08:05 AM)opmi Wrote: [ -> ]Just mandate second and subsequent car get zero financing.

IMHO that is still insufficient and inequitable though there will be impact as the mass middleclass will be curbed. Rich people will not be hit...

Just like the rich are not bothered by fines. You hit them with demerit points, that will be different. Structural means still needed

And one of those stuctural means is to curb cars per driving license for eg. "People will always find a way out" to dismiss a policy is a fallacy. Rules that capture >90% of the population are effective rules. It can never be 100% to capture the risk takers or the smart alecks. The law enforcement agencies are there precisely to deal with the 10%
(17-05-2013, 09:19 AM)specuvestor Wrote: [ -> ]
(17-05-2013, 08:05 AM)opmi Wrote: [ -> ]Just mandate second and subsequent car get zero financing.

IMHO that is still insufficient and inequitable though there will be impact as the mass middleclass will be curbed. Rich people will not be hit...

Just like the rich are not bothered by fines. You hit them with demerit points, that will be different. Structural means still needed

And one of those stuctural means is to curb cars per driving license for eg. "People will always find a way out" to dismiss a policy is a fallacy. Rules that capture >90% of the population are effective rules. It can never be 100% to capture the risk takers or the smart alecks. The law enforcement agencies are there precisely to deal with the 10%

Fully agreed.

There were couples managed to avoid ABSD with extreme action, but we can't deny its effectiveness on curbing property speculation.
I am more concerned about the trickle down effect on people like me who just want a car that get me from pt a to b and is not concerned about horse power ( or the lack of it) .. After the new tax on cars o higher omv, the Coe of small cars is about the same as the big. It might means some buyers of big cars might now aim for smaller cars and jack up deman for that cat. Big cars Coe has dropped substantially offsetting some of the impact of higher tax, but look at the small car cat, again the new rules is a win win situation between the rev collectors and the rich, the masses are really at status quo, the meagre fall in Coe cannot offset the effects of loan curbs and did not effectively push down demand for cars.

My fat hopes solution for this problem is that there should be a fix to the missing link between private car ownership and taxi. Taxis are highly unreliable during peak hours, maybe they should further liberalised the taxis and bus companies to provide stop gap measures to transport ppl. During peak hours. Stop insisting that any bus or taxi operators to run the whole island 24/7. Then demand for private cars will drop for cheapskates like me
Two separate write-ups on COEs. Interesting debate going on, and I wait to see what the Govt would do to the current system.

The Straits Times
www.straitstimes.com
Published on May 23, 2013
EDITORIAL
Keep eye firmly on purpose of COEs


MAKING the vehicle quota system more socially equitable is a worthwhile objective. It is also a pragmatic response to the desire of more citizens in an increasingly affluent society to own a car. Hence the importance that Transport Minister Lui Tuck Yew attaches to public feedback in refining the certificate of entitlement (COE) system, which heavily influences the way in which the market allocates car ownership. In asking the Land Transport Authority (LTA) to consult the public and stakeholders before making any changes, he has underlined the need for a new policy to reflect informed public opinion on the issue of car ownership itself.

The unavoidable truth is that policy changes that benefit one group of potential buyers, who are competing against others for a limited privilege, could leave another group feeling aggrieved. Thus, a surcharge on owning a second car is arguably a fairer way of using COEs to regulate car ownership in land-scarce Singapore.

Some have argued that such an approach might be viewed as an anti-wealth measure that penalises economic success. Yet, such a surcharge would be not so different from progressive tax rates or heftier registration taxes for costlier cars, which are already in effect. These are used as ways of requiring those who can afford to bear more of the burden of paying for scarce resources to do so, a principle that few would object to. The difficulty of implementing such a surcharge, however, will be considerable but not insurmountable.

Clearly, something will have to give if the COE system is to be responsive to public aspirations. The rise in interest rates for car loans, for example, will add to the cost of car ownership. But it is important that changes do not go against fundamentals. These have to do with avoiding congestion and keeping traffic and people moving smoothly and efficiently. All other objectives - including the need to balance aspirations of car ownership against demands for social fairness - are secondary to this core purpose of the COE system.

It would be useful for the LTA's consultative exercise to be broadened into a comprehensive land transport review that examines the vehicle quota system, road pricing and usage of public transport as an integrated whole. At least some of the angst over car ownership could be assuaged by clearer public understanding of the fact that cars are a private good and not a public one, where the emphasis should rightly be on equity. Hence there will always be a need to use the market mechanism to allocate the limited number of cars that can be put on the roads. Aspirations to own cars cannot go on being assuaged without worsening congestion.

-----------------------------

The Straits Times
www.straitstimes.com
Published on May 23, 2013
COE system - steer clear of the populism pothole


By Samuel Ee

It is interesting that even as the Transport Minister emphasises that the COE system should remain market-based, he is essentially considering the redistribution of car ownership. Could it be that the Government is pandering to a vocal minority? Or are these the signs of a budding socialist movement?

The COE, or certificate of entitlement, was introduced in 1990 to control the car population and congestion. It complemented the existing high registration taxes by requiring a motorist to bid for the privilege of owning a car. This piece of paper with a validity of 10 years could cost anything from $1 to more than $100,000, depending on the state of the economy and the size of the COE quota. In recent years, the latter, as well as an increasing population and growing affluence, conspired to push COE premiums to new highs.

The result of grossly overpriced cars becoming even more expensive led many in Singapore to lament that vehicle ownership was out of their reach. Astronomical car prices also contributed to headline inflation.

So on Feb 25, the Government introduced progressive registration taxes and vehicle financing restrictions.

Now, it is setting its sights on what is likely to be a revamp of the COE system and - even if it is not saying it out loud - basically ensuring that the masses would be able to afford a car, come tax or high COE premiums.

But how do you do that without taking apart the free market system that is the COE bidding exercise? How do you do that in a society that has been told from Day One that this is a meritocracy, one where hard work is rewarded, and that those rewards can be used to acquire and enjoy such material comforts as are deemed appropriate?

Cars in Singapore may be obscenely priced but most understand why they have to be on this tiny island. But the minister's comments may open a Pandora's box.

On the surface, his first point makes sense - to retain the original purpose of COE Category A (for cars below 1,600cc). It is not right that luxury cars should encroach into the so-called bread-and-butter segment and turn Cat A into a mini-Cat B (for cars above 1,600cc). After all, that is what categories are for in the first place.

But the problem is the market does not remain static. If a Cat A COE is reserved only for cheaper cars, it is safe to assume the COE premium would be low. But for how long? Because its affordability will surely attract more buyers to that category, especially if the alternatives - Cat B or the open category - cost more. The market will find its own equilibrium. The problem is supply and demand - there are just too few COEs available for too many buyers.

No system is perfect, not the current COE system nor the one that will replace it. But at least, it is based on principles that Singaporeans were taught to accept. More importantly, if you cannot afford a new car, there remains an alternative - a second-hand one.

But it is the minister's second point about car ownership that could have social implications. With 7 per cent of car owners owning more than one car and their cars making up 14 per cent of all cars, some people are unhappy about multiple-car ownership.

What's next? No multiple ownership of property? Lynch the guy with more than one good class bungalow? It is a slippery slope. So far, ordinary folks have not had much opportunity to denounce the rich but this could highlight the divide more clearly and formalise "We are the 99 per cent" sentiments.

Maybe income tax could be raised or more wealth taxes introduced, but there are economic downsides to punishing the rich. We may not like them simply because they are rich but hey, that's life; who said it was fair? If the majority can accept that some are multimillionaires but most will never be, then we should let the well-heeled buy that Ferrari and/or Aston Martin in addition to an S-Class.

Moreover, a tycoon with five cars is unlikely to have any real impact on the roads. He is not the cause of congestion on the CTE because unlike the heartlander, he does not live in the north. Also, his five cars are never on the road at the same time and he is always out of town. Which merely reinforces the point that usage and parking charges could ultimately be the only real solution to easing congestion.

Finally, one very important reason cars should not be made even pricier and multiple-car ownership should not be prevented - diversity. If everyone were allowed only one car, then that car would probably be a seven-seat minivan because it has to be as practical as possible. Because no one will buy a coupe or a convertible or a two-seater, mid-engined sports car or anything that is remotely exotic.

So if nothing else, say no to a COE system that veers towards populism and wealth taxes as that will make the cars on our roads really boring to look at.

This piece first appeared in The Business Times yesterday.
I am sorry Samual Ee, but I think the current government has been doing quite a fair bit to help the 1%, that attracts many wealthy men into the country.

I would not like to think that government is pandering to the 1% but rather to the 99%. The government has been elected by the people to serve the people. If the government continues to neglect the 99%, and continue to help the 1%, it will be detrimental to the society.

We can argue that the 1% will attract business owners to open job opportunities to the local. On the flip side, if we are able to give many people the opportunity to own the car, it will help to spur growth in the economy. Smaller car owners will see more sales as there are more people bringing in their cars for regular servicing. Whereas, these smaller car owners will not have the chance to survive if the wealthy 1% will need to send their car to authorize dealers to service their complicated cars.

At the end of the day, the government is serving the people, and not to just a minority of people. If the government wants to remain elected, she should know what to do.
Video: https://www.facebook.com/photo.php?v=122252904645673

Maybe we should get van Diesel to be our Ministry of transport Spokesman
Quote:I would not like to think that government is pandering to the 1% but rather to the 99%.

The total no. of cars available is around 600k in 2011.
http://www.lta.gov.sg/content/dam/ltaweb...ype%29.pdf

The total population is around 5 millions with an estimated total no. of household of about 1.2 million.
http://www.asiaone.com/News/AsiaOne+News...39903.html

So, if we divide by population equally, it will be 1 car per 8 persons.
if we divide by households equally, it will be 1 car per two households.

catering for 99% of the population is numerically impossible.

So, how should the policy be tweaked to make 99% happy?
(23-05-2013, 11:33 AM)yeokiwi Wrote: [ -> ]
Quote:I would not like to think that government is pandering to the 1% but rather to the 99%.

The total no. of cars available is around 600k in 2011.
http://www.lta.gov.sg/content/dam/ltaweb...ype%29.pdf

The total population is around 5 millions with an estimated total no. of household of about 1.2 million.
http://www.asiaone.com/News/AsiaOne+News...39903.html

So, if we divide by population equally, it will be 1 car per 8 persons.
if we divide by households equally, it will be 1 car per two households.

catering for 99% of the population is numerically impossible.

So, how should the policy be tweaked to make 99% happy?

I always felt it is the declining state of public transport that is the elephant in the room.
Well, in some countries, they are building double deck roads, some above ground, some under ground.
It's a massive project but possible. So it's possible for more cars to be on the road and to have more parking spaces.

It is like the HDBs getting taller. Personal opinion is that once a country gets too built up, roads/houses/etc
It's just not as liveable anymore. We are slowly but surely getting there.
All these measures seem to be targeted to make people sink deeper into debt - I still see many luxury cars being driven in Singapore, and this includes so many sports models I lost count (it started in 2006, if I recall).

But I love Vin Diesel's reaction when told of our car prices - complete open-mouthed surprise and astonishment! Tongue

The Straits Times
www.straitstimes.com
Published on May 29, 2013
Motor firms get creative to woo buyers

They roll out new deals for high-end cars to counter cooling measures
By Christopher Tan, Senior Transport Correspondent

MOTOR companies are coming up with innovative ways to entice car buyers put off by the recent cooling measures.

These range from a leasing deal that allows customers to drive away with a new Mercedes-Benz E200 with no downpayment to a buyback scheme that lets them own a Porsche Panamera for just $788 a month.

The arrangements are offered mainly by companies selling premium and luxury brands, as these are the ones most affected by the cooling measures.

In February, the Government restricted most car loans to 60 per cent of the purchase price - compared with up to 100 per cent previously - and imposed a tiered taxation system placing the heaviest burden on luxury vehicles.

For example, the Additional Registration Fee has gone up by about $1,400 for a Toyota Camry 2.0, but it is up by more than $8,500 for a BMW 520i.

The measures have led to orders for high-end cars being cancelled, and have put off many prospective buyers.

To counter this, Porsche agent Stuttgart Auto has come up with a scheme that gives customers a Porsche Panamera sedan at $788 a month, for three years.

Buyers will still have to cough up a 50 per cent downpayment of $235,000. But at the end of the third year, the company buys back the car at $235,000.

Stuttgart Auto sales manager Jason Lim said the scheme attracted more than 150 inquiries over one weekend, but the actual take-up rate was relatively low.

"In times of uncertainty, we're offering customers some certainty," he added.

Nevertheless, motor traders said consumers still prefer traditional hire-purchase deals as they are more familiar with them. They also like the idea of "owning" their car.

But Mr Say Kwee Neng, managing director of BMW agent Performance Motors, said: "Do you ever actually own a car in a hire-purchase agreement?"

He added that the response to leasing schemes had been "slower than what we wanted", but the deals seem most popular with 3-series and 1-series customers.

"It's a bit of an educational process," he said. "If you're acquiring a depreciating asset, don't you think a lease makes sense?"

Mercedes dealer Cycle & Carriage is offering a deal that gives customers a Mercedes E200 for $3,577 a month via a seven-year lease with no downpayment.

Under a traditional hire-purchase arrangement, they would need to cough up $124,000 up front, and make monthly instalments of $2,390 over five years.

The dealer's chief operating officer Eric Chan said multinational companies seem most receptive to leasing plans as they dislike the sizeable capital expenditures that come with hire-purchase deals.

For individuals, he said a lease is preferable for those who are financially-savvy and able to get good returns from cash otherwise tied up in a car downpayment.

Financial expert Leong Sze Hian said the suitability of each scheme depends on needs and affordability. He said the Porsche scheme is superior "purely from a financial perspective".

"But the problem with purely financial analyses is that affordability is not a factor," he added.

christan@sph.com.sg
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