COE: Individual vs Institutional bidding

[koster]

The key question is so what if TS is right? Will anything change?

 

[fly1111]

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.

Don’t waste time la. Erection over liao
Kpkb nao got use meh

 

[dev_stg_prd]

Not to say that you guys don't have good ideas - but the talk of the town in those PHV groups is:

"Every +$10k increment to COE prices = 2 more trips/day, Bro"

"No scared la, just buy!"

1 day only got 24H

 

[Comage]

1 day only got 24H

"No worries, Bro. Saturday Sunday lor!"
"Just lessen your weekend trips to JB lar!"

Magic. Problem solved.

 

[Rodimusprime6113]

The pre loan arrangement is interesting idea but means what? I sign with a bank a loan for $50k and i bid $50k for coe. I get it, I take the loan, I don’t get it, I don’t take the loan? Not sure if the banks will want to do this especially if they know about 50% of the bids will fail unless you pay a surcharge.

Some will say u elitist don’t understand why people need a car to fetch elderlt



The point is, if it’s cash and self bid for COE, only the cash rich will get the car at a lower COE cost

And I don’t think u can ban sellers from bidding cos sellers bid on your behalf. If you are saying can only sell cars without coe and buyer must get coe then go to showroom, its possible but there will probably be a lot of complaints cos of inconvenience. It’s not like right now u can’t do that. It’s just inconvenient and even if I wanna do that, I might lose out cos others don’t do that

Leave the loan mechanics to the banks. They will figure out a way.

Whether it’s high or lower income families, we face same set of issues, including ferrying elderly and grocery shopping. Lower income families should have a chance to own a car through bidding in a system that’s based on pure market principles, that is non-institutionalized bidding. We seemed to have deviated from the original spirit and aim of the system.

Like one bro said, the trading relationships amongst various parties (except for buyers) favor prices that are high.

 

[Rodimusprime6113]

Also, cannot modify bid value. I read car dealers could change bid value before close. Should not allow them.

Yes, this leads to unnecessary and unhealthy bidding wars. To the detriment of buyers. And buyers have absolutely no control over it.

 

[dev_stg_prd]

"No worries, Bro. Saturday Sunday lor!"
"Just lessen your weekend trips to JB lar!"

Magic. Problem solved.

it's like saying 65 years retire.. if not enough $ work a few more years ba

 

[jumpthepig]

Cannot touch the golden goose if not no golden eggs

Golden eggs always get bigger…

Singapore collected S$88.9 billion (US$69.3 billion) in tax revenue for the 2024/2025 financial year, a 10.7 per cent increase from the previous year.

https://www.channelnewsasia.com/sin...ue-increases-financial-year-2024-2025-5343651

 

[dev_stg_prd]

Leave the loan mechanics to the banks. They will figure out a way.

Whether it’s high or lower income families, we face same set of issues, including ferrying elderly and grocery shopping. Lower income families should have a chance to own a car through bidding in a system that’s based on pure market principles, that is non-institutionalized bidding. We seemed to have deviated from the original spirit and aim of the system.

Like one bro said, the trading relationships amongst various parties (except for buyers) favor prices that are high.

actually not true.. the other aspect is if got $.. we need to bid more to secure the car.

 

[Smarty22]

The “pay as you bid” system has been proposed numerous times but rejected by LTA, I guess may be tax revenue would be affected .In my opinion , is the most effective way to bring COE to a more realistic level.

 

[Comage]

Exactly - the root cause for this runaway-COE-prices issue is not that of "who can/cannot afford", nor one of "bidding process is screwed up".

It's what the car owners do with their $150k vehicles - they split it into "installment" payments instead of doing it the legit MAS way of putting down that proper 30-40% downpayment upfront.

The system/process of bidding is not broken - it's the people who game the system/process that are the root cause of the problem.

Buying a Car in Singapore Be Like:

Leave the loan mechanics to the banks. They will figure out a way.

Whether it’s high or lower income families, we face same set of issues, including ferrying elderly and grocery shopping. Lower income families should have a chance to own a car through bidding in a system that’s based on pure market principles, that is non-institutionalized bidding. We seemed to have deviated from the original spirit and aim of the system.

Like one bro said, the trading relationships amongst various parties (except for buyers) favor prices that are high.

You guys can debate all you want about what bidding process, ballot, market principles, trading relationships etc. There's nothing wrong with that, but it's like what the govt did - what cut-n-fill approach thinking it will cool down the COE prices? But no, it just went higher instead.

The people who are abusing the system does not GAF about all the above macro/microeconomics stuff. They just pay through their nose through "extra trips per day" after sticking that PHV label on their vehicles.

You want my idea, Boss?

Ban PHVs from crossing the border into Malaysia. A PHV should function just like a taxi - a vehicle meant for public consumers to use/hire as a point-to-point transport/vehicle within Singapore. Nothing more.

You will see an instant crash of COE prices, by at least 30% - I'm dead-sure of that.

The fact that I'm like shouting into a void here where nobody:
- dares to challenge my idea
- dares to retort/reject my idea with counter-proposals or justifications on why it won't work
simply goes to show that this is the pure root cause for this runaway-COE prices problem we are seeing now (if the PHV guys even think it's a problem at all)

So the guys who are the cause of the problems and see this, all try to ignore it such that it doesn't get the attention it deserves.

 

[pwongkk]

I like this idea but I think it can only work in a closed bidding system. Otherwise buyers might keep calling sellers to revise bid, call banks to faster allow the increase etc etc especially if their planned bidding amount is slightly lower than the reserve price

A better way would be balloting but there must be ruled like minimum ownership period and such to prevent a black market from forming

Balloting works and no need huge amount of money involved. Proven in P1 balloting.

The gov has tge solution, but die die want to involve money.

Balloting is more fair since it ensures people have a chance to own a car.

For those getting 2nd car or more based on household address, they can be put in another category, with a small pool of coe allocated.

 

[Comage]

Balloting works and no need huge amount of money involved. Proven in P1 balloting.

The gov has tge solution, but die die want to involve money.

Balloting is more fair since it ensures people have a chance to own a car.

For those getting 2nd car or more based on household address, they can be put in another category, with a small pool of coe allocated.

It will just become like a NDP tickets balloting exercise. Once the ballot is drawn and announced - you start to see the listings go up in Carousell and online platforms.

What then?

P1 balloting is a different thing altogether - every child is entitled to a primary school slot. You don't get school A, you will eventually be assigned to school Z. Yes, school Z sucks but the child still gets an enrolment slot in that school.

For vehicle ownership, you ballot and you miss it - what then? No Cat B, give you Cat A? Or what?

Car in Singapore is a want, not a need.
There's a difference between an "entitlement" and a "privilege" also.

 

[2yearswastedlife]

prices will keep rising until consumers stop consuming. everybody else in this value chain (salesman, company, pap etc) profit from an ever-increasing coe

 

[Philipkee]

It will just become like a NDP tickets balloting exercise. Once the ballot is drawn and announced - you start to see the listings go up in Carousell and online platforms.

What then?

P1 balloting is a different thing altogether - every child is entitled to a primary school slot. You don't get school A, you will eventually be assigned to school Z. Yes, school Z sucks but the child still gets an enrolment slot in that school.

For vehicle ownership, you ballot and you miss it - what then? No Cat B, give you Cat A? Or what?

Car in Singapore is a want, not a need.
There's a difference between an "entitlement" and a "privilege" also.

Actually I think it won’t be so bad. Cos based on quota, bids to quota are barely 2 bids for every quota. As long as repeat bidders are given priority in the next ballot, most likely they will eventually get the car

And to prevent frivolous bidding, anyone bidding and gets assigned the coe will have to pay for it or pay a penalty and be barred from bidding again for next x years

 

[pwongkk]

It will just become like a NDP tickets balloting exercise. Once the ballot is drawn and announced - you start to see the listings go up in Carousell and online platforms.

What then?

P1 balloting is a different thing altogether - every child is entitled to a primary school slot. You don't get school A, you will eventually be assigned to school Z. Yes, school Z sucks but the child still gets an enrolment slot in that school.

For vehicle ownership, you ballot and you miss it - what then? No Cat B, give you Cat A? Or what?

Car in Singapore is a want, not a need.
There's a difference between an "entitlement" and a "privilege" also.

Make it non transferable for 1 year. Car must be registered within 6 months.

It is a need for young families, given how congested public transport is. Elderly are moving pma into trains, add on to parents pushing their baby prams and some, their shopping trolley. Most importantly, tourists with their luggage going to airport.

All these reduces the available capacity. If you can take some off to owning their cars, it will take some load off.

 

[buttbERry]

so many willing to bid so high

 

[Rodimusprime6113]

Wishlist from bros
1. Individual bidding
2. No revision to bid once submitted
3. Balloting
4. Separate category for phv
5. Higher coe if household applying for more than x cars.

 

[fandango]

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.

Can summary?

 

[esandwich]

TS, first time buy new car?