COE: Individual vs Institutional bidding

[Rodimusprime6113]

As I was buying my car, the car salesman told me he would submit my COE bid at X price for me. Since then, I have always wondered why individual buyers should not do the bidding for themselves.

When he told me X price, I wondered how he arrived at it, guaranteed some more. It was as if car dealers (or institutional bidders) knew the winning bid beforehand. To me, pure market bidding typically exhibits great price variations. But COE prices seem to cluster around the previous winning bid with an invisible floor, exhibit gradual upward-trending line (which are not supposed to appear in pure market biddings), and are uncorrelated to the prices that individual buyers would have put in if they can bid themselves.

Let us assume there are 10 buyers bidding for 3 COEs and the winning bid at the previous bidding session was $7. Assume 3 different sessions consisting of different profiles of buyers.​

• Session 1 consists of 8 medium-income and 2 high-income buyers. They submit dollar bids of 3,3,2,4,2,4,3,2,8,9. The 3 COEs are priced at the third highest bid of $4.​
• Session 2 consists of 6 high-income and 4 medium-income buyers. They submit dollar bids of 8,8,7,9,10,5,3,2,4,3. The 3 COEs are priced at the third highest bid of $8.​
• Session 3 consists of 10 car dealers. They submit dollar bids of 7,7,8,8,7,7,8,7,7,7. The 3 COEs are priced at the third highest bid of $8.​

Because the previous session had a winning bid of $7, institutional bidders will use $7 as a reference point. To ensure their customers get their cars, they may bid slightly higher. Also, institutional bidders have no clue on their customers’ marginal propensity to spend on a COE. Over time, a trend line forms. Whereas in Session 1 and 2, individual buyers submit bids based on what they can afford. Sessions that consist of more rich people will lead to higher bids, and sessions that consist of less well-off people will naturally lead to lower bids. I think the latter scenario tends to dominate the former. This is behavioural economics. Institutional vs individual bidding leads to different price outcomes.​

When I asked several AI platforms, all of them concluded that individual bidding would almost certainly result in lower and fairer COE prices. The implementation challenges around financing coordination and market knowledge gaps are technically solvable through enhanced digital platforms and modified lending practices. Ask AI yourself.

I am not an expert in COE dynamics. I am just wondering how COE prices will be if we can bid ourselves. If I could, I would not have bid at the price that my car salesman did.

 

[Evcats]

Count until the cents won’t get you a new car the real buyers go in knowing how much to pay in all for a car - can accept take else drop. I have never heard of buyers complaining about how high the COE bid is… rather when will the car be delivered.

 

[AndroidComa]

ask you to 1 short bid at 100K and deduct immediately you can afford or not?

 

[tomsss]

in before LTA says COE bidding is fare, there is no evidence to suggest a different outcome when comparing the 2 different groups of bidders

 

[Philipkee]

As I was buying my car, the car salesman told me he would submit my COE bid at X price for me. Since then, I have always wondered why individual buyers should not do the bidding for themselves.

When he told me X price, I wondered how he arrived at it, guaranteed some more. It was as if car dealers (or institutional bidders) knew the winning bid beforehand. To me, pure market bidding typically exhibits great price variations. But COE prices seem to cluster around the previous winning bid with an invisible floor, exhibit gradual upward-trending line (which are not supposed to appear in pure market biddings), and are uncorrelated to the prices that individual buyers would have put in if they can bid themselves.

Let us assume there are 10 buyers bidding for 3 COEs and the winning bid at the previous bidding session was $7. Assume 3 different sessions consisting of different profiles of buyers.​

• Session 1 consists of 8 medium-income and 2 high-income buyers. They submit dollar bids of 3,3,2,4,2,4,3,2,8,9. The 3 COEs are priced at the third highest bid of $4.​
• Session 2 consists of 6 high-income and 4 medium-income buyers. They submit dollar bids of 8,8,7,9,10,5,3,2,4,3. The 3 COEs are priced at the third highest bid of $8.​
• Session 3 consists of 10 car dealers. They submit dollar bids of 7,7,8,8,7,7,8,7,7,7. The 3 COEs are priced at the third highest bid of $8.​

Because the previous session had a winning bid of $7, institutional bidders will use $7 as a reference point. To ensure their customers get their cars, they may bid slightly higher. Also, institutional bidders have no clue on their customers’ marginal propensity to spend on a COE. Over time, a trend line forms. Whereas in Session 1 and 2, individual buyers submit bids based on what they can afford. Sessions that consist of more rich people will lead to higher bids, and sessions that consist of less well-off people will naturally lead to lower bids. I think the latter scenario tends to dominate the former. This is behavioural economics. Institutional vs individual bidding leads to different price outcomes.​

When I asked several AI platforms, all of them concluded that individual bidding would almost certainly result in lower and fairer COE prices. The implementation challenges around financing coordination and market knowledge gaps are technically solvable through enhanced digital platforms and modified lending practices. Ask AI yourself.

I am not an expert in COE dynamics. I am just wondering how COE prices will be if we can bid ourselves. If I could, I would not have bid at the price that my car salesman did.

It will be complicated

Let’s say self bid ONLY. So you definitely can’t take loan for it cos you won’t want to bid a high sum and then only apply for loan when successful (what if you don’t get the loan?) or apply for a loan in advance and pay interest if the bid is unsuccessful

So who can bid for COE? Only the cash rich. Let’s say COE now is $50k instead of $100k. Who can afford to fork out $50k cash to plonk to a COE? Only the cash rich. What will social media and edmw say then? That the system favours the rich (and even more so now cos COE is cheaper).

Plus time to bid and revise bids. Who has the time for this beyond CEOs and “JLBs”? Guess what will EDMW say then?

Balloting might work but then owning a car is seen as a luxury and not a need

So COE can go down if self bid but the people who can afford the car will skew more towards the cash rich

 

[ballastic90]

Which one best ?

 

[jujube]

This + COE must be paid in full cash, no exceptions, then price will drop

 

[kitsura]

That time LTA changed rules such that only 50% of car could be financed then COE prices plunged. But then someone came up with way to game the system so it went back up now. If no money to pay 100% of car in full don’t buy, you can’t afford it!

 

[Dudick]

This + COE must be paid in full cash, no exceptions, then price will drop

Then the poor will never afford the car whereas the rich will get the car at a cheaper price

 

[AndroidComa]

That time LTA changed rules such that only 50% of car could be financed then COE prices plunged. But then someone came up with way to game the system so it went back up now. If no money to pay 100% of car in full don’t buy, you can’t afford it!

now is 60%
still like that
nobody cares still offer $0 driveaway

 

[ksapple]

u can bid urself now also by the way. u can also see how they bid for u

my case I pay non guarantee bid about 80k for my coe when I sign the car contract, the day of bidding I saw them bid I tot no chance liao, then last min hoot 90k. my final CoE price is about 85k

I tink is see how hungry they wan to sell ur car.

those non guarantee bid they just put the lowest, while those wan car 1 just pay only usually also 10-20k diff no meh

 

[RoLanTo]

who doesnt want money?

sales guy want comms from selling, plus maybe some benefits from your car loan due to the size.
govt happy to make money from COE.. the money lender also happy u borrow alot then they make money..

in this whole trading relationship.. only U the buyer unhappy with paying more.. whereas the seller, the agent, the lender, car maker.. ALL so happy it when the number gets bigger and bigger..

 

[Rodimusprime6113]

It will be complicated

Let’s say self bid ONLY. So you definitely can’t take loan for it cos you won’t want to bid a high sum and then only apply for loan when successful (what if you don’t get the loan?) or apply for a loan in advance and pay interest if the bid is unsuccessful

So who can bid for COE? Only the cash rich. Let’s say COE now is $50k instead of $100k. Who can afford to fork out $50k cash to plonk to a COE? Only the cash rich. What will social media and edmw say then? That the system favours the rich (and even more so now cos COE is cheaper).

Plus time to bid and revise bids. Who has the time for this beyond CEOs and “JLBs”? Guess what will EDMW say then?

Balloting might work but then owning a car is seen as a luxury and not a need

So COE can go down if self bid but the people who can afford the car will skew more towards the cash rich

Individuals bidding process can have workarounds, such as enhanced digital platforms and pre bid loan arrangements. Imagine if our system had been individual bidding right from the start, authorities would have implemented appropriate procedures. It’s just that we are so used to the institutional bidding process. That’s why we think workarounds are impossible.

The core idea is that vast majority of individuals would not have submitted bids as large as current bids if they do it themselves. Not all rich people will submit crazy bids. However, we had to go with institutional bidding right from the start, and this led to ever increasing bids.

Even if everyone in Singapore were to be rich, I still doubt that individual bidding will lead to higher bids than institutional.

If we don’t have GIRO and credit cards and are forced to pay in cash for all of our bills, I bet you will feel more heart pain and will be more active in finding ways to cut expenses. This is behavioral economics.

 

[crunsik]

Cannot touch the golden goose if not no golden eggs

 

[relishmalice]

It will be complicated

Let’s say self bid ONLY. So you definitely can’t take loan for it cos you won’t want to bid a high sum and then only apply for loan when successful (what if you don’t get the loan?) or apply for a loan in advance and pay interest if the bid is unsuccessful

So who can bid for COE? Only the cash rich. Let’s say COE now is $50k instead of $100k. Who can afford to fork out $50k cash to plonk to a COE? Only the cash rich. What will social media and edmw say then? That the system favours the rich (and even more so now cos COE is cheaper).

Plus time to bid and revise bids. Who has the time for this beyond CEOs and “JLBs”? Guess what will EDMW say then?

Balloting might work but then owning a car is seen as a luxury and not a need

So COE can go down if self bid but the people who can afford the car will skew more towards the cash rich

Frankly if u can't afford to fork out 50k cold hard cash for COE, u shouldn't be buying a car.

 

[Rodimusprime6113]

Frankly if u can't afford to fork out 50k cold hard cash for COE, u shouldn't be buying a car.

Sad that we have resigned to fate high COE prices when there’s alternative solutions that will lead to lower prices. Stockholm syndrome.

 

[pwongkk]

As I was buying my car, the car salesman told me he would submit my COE bid at X price for me. Since then, I have always wondered why individual buyers should not do the bidding for themselves.

When he told me X price, I wondered how he arrived at it, guaranteed some more. It was as if car dealers (or institutional bidders) knew the winning bid beforehand. To me, pure market bidding typically exhibits great price variations. But COE prices seem to cluster around the previous winning bid with an invisible floor, exhibit gradual upward-trending line (which are not supposed to appear in pure market biddings), and are uncorrelated to the prices that individual buyers would have put in if they can bid themselves.

Let us assume there are 10 buyers bidding for 3 COEs and the winning bid at the previous bidding session was $7. Assume 3 different sessions consisting of different profiles of buyers.​

• Session 1 consists of 8 medium-income and 2 high-income buyers. They submit dollar bids of 3,3,2,4,2,4,3,2,8,9. The 3 COEs are priced at the third highest bid of $4.​
• Session 2 consists of 6 high-income and 4 medium-income buyers. They submit dollar bids of 8,8,7,9,10,5,3,2,4,3. The 3 COEs are priced at the third highest bid of $8.​
• Session 3 consists of 10 car dealers. They submit dollar bids of 7,7,8,8,7,7,8,7,7,7. The 3 COEs are priced at the third highest bid of $8.​

Because the previous session had a winning bid of $7, institutional bidders will use $7 as a reference point. To ensure their customers get their cars, they may bid slightly higher. Also, institutional bidders have no clue on their customers’ marginal propensity to spend on a COE. Over time, a trend line forms. Whereas in Session 1 and 2, individual buyers submit bids based on what they can afford. Sessions that consist of more rich people will lead to higher bids, and sessions that consist of less well-off people will naturally lead to lower bids. I think the latter scenario tends to dominate the former. This is behavioural economics. Institutional vs individual bidding leads to different price outcomes.​

When I asked several AI platforms, all of them concluded that individual bidding would almost certainly result in lower and fairer COE prices. The implementation challenges around financing coordination and market knowledge gaps are technically solvable through enhanced digital platforms and modified lending practices. Ask AI yourself.

I am not an expert in COE dynamics. I am just wondering how COE prices will be if we can bid ourselves. If I could, I would not have bid at the price that my car salesman did.

Hard to believe they all never agreed at a COE amount.

Must ban car sellers from indicating the COE amount. Car buyers indicate the amount they want to bid.

 

[byfun]

Then the poor will never afford the car whereas the rich will get the car at a cheaper price

Ministars got tell sinkies liao ma have bmw. grab n taxi ...

 

[rizhal]

Pay what you bid for, perhaps can help to arrest COE skyrocketing.

 

[matrix05]

Jeffery after stabilizing MRT should start to decouple COE bidding from car sellers.