Why is COE so high? Is Car Dealerships driving COE prices up?

Should Car dealerships be banned from bidding COEs on Customers behalves?


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yongkaer123

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We often complain about COE being so expensive but have we wonder who are the ones bidding the COEs on our behalves?
Are we giving car dealership too much power to dictate the COE prices? God knows, they would have already buffered in 60-70k worth of COE in the car prices, surely they will not care if COE spikes by a few thousands each mth so long they can secure the registrations?

I believe they are the main culprit why COE prices are so expensive and we are better off if every one bids their own COEs. I might be missing something so do point me out and share your thoughts!
 

myviowner

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You can actually bid your own COE. Details you can learnt from online.
Is corelated.
Customer sign on purchase, hurry them to deliver the new car, dealer want to deliver and start bidding up. Dealer also wants to earn.
Therefore, not all blame on the dealer. IMHO
 

Sauron

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Noob spotted. If no one buys why would coe go up? Coe also don't go to dealers, though they earn from bigger loan interests
 

Conan1986

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LOL, in what way does a dealer benefit from increased COE? It’s all going to the govt leh, dealer get nothing much from it except interest from larger loan. buyers will be driven away from higher car prices in general. think you need to understand the basics before commenting..
 

iygnaug

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Artificial hand at work. A few main dealers can manipulate the overall price for COE. The truth is that as travelling is almost impossible, people who are still collecting their fat cheques and bonuses have nothing else to spend on. Just look at the prices of properties as well. The money needs to be spend and go somewhere. Banks are laughing all the way, bigger loansx more interests.

That being said, there are also dealers who secured COE without a buyer. Look at those brand new cars selling as used with less than 100km mileage. Those are for immediate delivery, just need to pay $25 to transfer the names, without the bidding process and unknown COE value.

If need a car, just buy a car. If don't need a car, just relax.
 

andyhtc

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From the article below, the high premium is driven mainly by:

(a) Tesla - with generous government subsidy for electric cars.
(b) PHV - they are able to pass on the COE cost to passengers.
(c) Cat B cars - the profit margins are so good that they can easily absorb a $5k increase in COE price.

It also means that the increasing COE trend will continue with limited or even fewer COE quotas and better economy ahead.

COE premiums for big cars cross $70,000 to reach six-year high​

Industry watchers said the surge could have been attributable to Tesla, which is still clearing a sizeable backlog of orders. Thus far, the American electric car company has managed to deliver only a trickle of cars.

Others said private-hire operators are renewing their fleets in the light of tighter regulations. These companies, which have a total of about 40,000 cars, have always been a huge influence on COE prices.

Yet, others reckon the traditional rush to meet annual sales targets as the year starts to draw to a close has prompted dealers to start rushing for volume. Typically, fatter profit margins for bigger cars allow them to bid most aggressively for COEs for such cars.

https://www.straitstimes.com/singapore/transport/coe-of-big-cars-cross-70000-to-reach-six-year-high
 

warr

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It's a rigged system from the start to benefit the betting house. If you are not a big player, avoid. Like avoiding the casino.

A COE is your golden ticket to visit the taxman. 90% of your so-called car ownership is tax.
 

myviowner

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It's a rigged system from the start to benefit the betting house. If you are not a big player, avoid. Like avoiding the casino.

A COE is your golden ticket to visit the taxman. 90% of your so-called car ownership is tax.
Rigged system? Where you get the source from. Keen to know.
 

kebinu

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If you have evidences of dealers (big ones) manipulating COE, go ahead and submit it. They will be charged.

Supply of COE is going lower, it's inevitable that COE price will go up. Back in 2015 when COE started going down, we don't hear people complaining that they are colluding to drive up the COE right?

If you are wonder why COE can go up, look at the car rentals company. They are expanding real fast with grab. they are buying cars every now and then. New fleet kept coming in.
 

EJB

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If you have evidences of dealers (big ones) manipulating COE, go ahead and submit it. They will be charged.

Supply of COE is going lower, it's inevitable that COE price will go up. Back in 2015 when COE started going down, we don't hear people complaining that they are colluding to drive up the COE right?

If you are wonder why COE can go up, look at the car rentals company. They are expanding real fast with grab. they are buying cars every now and then. New fleet kept coming in.
Supply of COE is lower, it's the need to get the COE that makes people bid higher and higher to secure it.

Back then it dropped was because I think a bunch came together and decided not to over-bid for COE causing a slump for a while, IIRC 2018-2019 or so. Bidding is to the highest bidder. Can't manipulate COE unless a dealer is purposely bidding $80K for 2000 COEs then, the min will shoot to $80K for no reason...
 

yongkaer123

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Clearly understand that COE does not goes to the dealers and nor am I suggesting that any manipulation by the them.

My point is if the car dealers have enough buffer and order bank, which I would think most of the bigger players would, it is easy for them to submit bids higher than the current trend. This in return, will mean they are likely to secure more COEs for registrations, which also means they gets their comms. And when there are enough players doing the same, especially when quota are low, we see significant spikes to the COE prices.

My question is would it be better if COE bidding is done 100% by car buyers, no more bulk bidding of COE, transferring of COE nonsense from the dealers.
 

sigeena

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Well it is likely to squeeze out those lower middle class. Assuming if COE is worth about 30k. That family will have to spend that 30k upfront, rather than monthly payments of 500-800.
 

myviowner

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Clearly understand that COE does not goes to the dealers and nor am I suggesting that any manipulation by the them.

My point is if the car dealers have enough buffer and order bank, which I would think most of the bigger players would, it is easy for them to submit bids higher than the current trend. This in return, will mean they are likely to secure more COEs for registrations, which also means they gets their comms. And when there are enough players doing the same, especially when quota are low, we see significant spikes to the COE prices.

My question is would it be better if COE bidding is done 100% by car buyers, no more bulk bidding of COE, transferring of COE nonsense from the dealers.
Not all ppl, especially first time buying car could be able to fork out that lump sum of $$ to pay off the bidded coe.
 

NoLogicLah

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The same pple who say coe will drop further when cat A reach $20k plus n nv buy car end up now blame dealers for jacking up coe price.
 

hoks

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TS, coe ard for 30yrs n ur suggestion has been brought up many times.

Why would the garmen implement something to hurt its own pocket.
 

myviowner

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TS, coe ard for 30yrs n ur suggestion has been brought up many times.

Why would the garmen implement something to hurt its own pocket.
TS is a buyer who could have waited and waited to see COE going downwards then entry the purchase. Something like at end 2019, oredi very low compared to current but still put back. Now, regret.
 

Eisenkrone

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I think TS brings up a valid question. Given that demand for new cars is always there, his assertion is that dealers simply do not have an incentive to bid low, since the coe cost is passed down to the customer. The dealer only has to care that he does not fall short on the minimum for that bidding, and so dealer always bids high. Since most people are lazy and leave it to dealers to bid, all dealers are fighting among themselves in this battle where none of them care about lowering the price, leading to higher prices.

The flip question would be, if 100% individuals bid on their own, would they be more conservative, or would the exact same thing happen?
 

kebinu

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I think TS brings up a valid question. Given that demand for new cars is always there, his assertion is that dealers simply do not have an incentive to bid low, since the coe cost is passed down to the customer. The dealer only has to care that he does not fall short on the minimum for that bidding, and so dealer always bids high. Since most people are lazy and leave it to dealers to bid, all dealers are fighting among themselves in this battle where none of them care about lowering the price, leading to higher prices.

The flip question would be, if 100% individuals bid on their own, would they be more conservative, or would the exact same thing happen?

The outcome will be similar after a period of time.

Customers are already willing to pay so much for a car. Sometimes, paying a bit more to secure the COE is a normal move. SE is doing the psycho work now, but if consumers bid for their own COE, they will just self psycho lor.

We also like a 1 stop service to secure everything. Can you imagine we have a bit more breakdown such as secure own loan, insurance and COE to get the car, then we are going backwards to an era of self service or shall we move forward like Tesla where we buy a car on the website, with some works later on.

Good selling brands with high margin like BMW can secure COE much easier. Even if COE went up by $10k, their fat margin can still cover for it. For a car like attrage, their profit per car is like only $1k to 7k, then of coz these buyers tend not to get their COE when Coe is going up.

https://onemotoring.lta.gov.sg/cont...ying/Car_Cost_Update/M032-Car_Cost_Update.pdf
In this PDF, the attrage has a profit of $800+, but it's likely sold at earlier price and maybe secure COE earlier? I'm also not sure if the AD has brought in the car at OMV price (how LTA determine OMV) too.

When dealers secure a COE at higher price, it's also eating to their margin. They just have to increase price for next round.

PS: Check their profit margin vs 2020, it seems their margin is going up. (before warranty, showroom cost etc)
 
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