Fairer Way To Bid For COEs

[kenntona]

This morning's forum letter.....

Sounds good, especially when OMVs are squeezed by the agents.....
____________________________________________________________________________

IN MOST egalitarian societies, retrogressive policies like the imposition of regressive taxes are considered anathema.

The certificate of entitlement (COE) is just such a levy ('Fewer COEs for next 6 months'; last Friday).

Whereas income taxes are greater for high-income earners, who will also pay more goods and services tax through conspicuous consumption, the COE is a flat levy that disproportionately burdens the less well-off Singaporeans.

These Singaporeans need vehicles, but can only marginally afford them, unlike their more prosperous counterparts, for whom the COE constitutes only a tiny fraction of the cost of their supercars.

COEs should still operate on a bidding system, but bids should be based on a percentage of the vehicle's open market value (OMV).

Take, for example, the following:

- A 1.6-litre Hyundai Elantra with an OMV of $14,000;
- A 2.0-litre Kia Optima with an OMV of $20,000;
- A 1.6-litre Mercedes C Kompressor with an OMV of $30,000;
- A 2.0-litre BMW 5-series with an OMV of $40,000;
- A 3.5-litre Mercedes S Class with an OMV of $100,000; and
- A 4.5-litre Ferrari Spider with an OMV of $360,000.

A minimum winning bid of, say, 150 per cent OMV for these cars' COEs will cost $21,000, $30,000, $45,000, $60,000, $150,000 and $540,000, respectively.

This progressive scaling of the COE levy is better than the present system, which is far more punitive to the less well-off.

Dr Yik Keng Yeong

Fairer way to bid for COEs

 

[sszone]

Re: Fairer Way To Bid For COEs

Like as if they will bother abt his letter.....haha

 

[hetraa]

Re: Fairer Way To Bid For COEs

The people on top making the COE implemention/decisions are driving this segment

- A 3.5-litre Mercedes S Class with an OMV of $100,000; and
- A 4.5-litre Ferrari Spider with an OMV of $360,000.

U think leh? :juggle:
heh

This morning's forum letter.....

Sounds good, especially when OMVs are squeezed by the agents.....
____________________________________________________________________________

IN MOST egalitarian societies, retrogressive policies like the imposition of regressive taxes are considered anathema.

The certificate of entitlement (COE) is just such a levy ('Fewer COEs for next 6 months'; last Friday).

Whereas income taxes are greater for high-income earners, who will also pay more goods and services tax through conspicuous consumption, the COE is a flat levy that disproportionately burdens the less well-off Singaporeans.

These Singaporeans need vehicles, but can only marginally afford them, unlike their more prosperous counterparts, for whom the COE constitutes only a tiny fraction of the cost of their supercars.

COEs should still operate on a bidding system, but bids should be based on a percentage of the vehicle's open market value (OMV).

Take, for example, the following:

- A 1.6-litre Hyundai Elantra with an OMV of $14,000;
- A 2.0-litre Kia Optima with an OMV of $20,000;
- A 1.6-litre Mercedes C Kompressor with an OMV of $30,000;
- A 2.0-litre BMW 5-series with an OMV of $40,000;
- A 3.5-litre Mercedes S Class with an OMV of $100,000; and
- A 4.5-litre Ferrari Spider with an OMV of $360,000.

A minimum winning bid of, say, 150 per cent OMV for these cars' COEs will cost $21,000, $30,000, $45,000, $60,000, $150,000 and $540,000, respectively.

This progressive scaling of the COE levy is better than the present system, which is far more punitive to the less well-off.

Dr Yik Keng Yeong

Fairer way to bid for COEs

 

[Oilman]

Re: Fairer Way To Bid For COEs

One can always dream

 

[DriveAllDay]

Re: Fairer Way To Bid For COEs

This morning's forum letter.....

Sounds good, especially when OMVs are squeezed by the agents.....
____________________________________________________________________________

This progressive scaling of the COE levy is better than the present system, which is far more punitive to the less well-off.

...

Dr Yik Keng Yeong

Fairer way to bid for COEs

Wouldn't work. It's fine-tuning a fundamentally flawed system - like polishing turd. The proposal introduces yet more complexity into an already over-complicated structure.

Simplification is key. Reducing systemic inefficiencies and distortions are key.

1. Remove the OMV, PARF, ARF nonsense
==================================

Let cars trade at their intrinsic values, without complex taxes and rebates -- ie. "body price"
This establish an efficient primary and secondary market, free from all distortions

We have a whole bureaucracy and industry running around this antiquated system -- release it.


2. Keep, simplify and refine COEs.
===========================

Stop letting dealers bid for COEs. They more often than not drive prices

Make COEs transferable within the 10 year period.
You can change cars using same COE. When you sell your car, the buyer then source for COE

Establish secondary COE trading platform.
Imagine it like a 10 year bond. You can either bid full 10-year COE from issuer (LTA), or buy less than 10 yr COEs from secondary market. The COEs can be traded on an open exchange just like stocks and bonds, with 120 monthly periods. Can't afford 10 year COE? Go for 2 years. FT only here for 3 years? Buy COEs with 3 years left.

3. Reduce financing
================

100% 10 years is nuts. 7 year 70% should be more than enough. You shouldn't buy if you can't afford to put 30% down.

 

[Mockngbrd]

Re: Fairer Way To Bid For COEs

Life is not fair.... especially in SG....

 

[kenntona]

Re: Fairer Way To Bid For COEs

Like as if they will bother abt his letter.....haha

One can always dream

Prease lah, wouldn't respect someone who wrote to the press than to whine in car forums?

The people on top making the COE implemention/decisions are driving this segment

- A 3.5-litre Mercedes S Class with an OMV of $100,000; and
- A 4.5-litre Ferrari Spider with an OMV of $360,000.

U think leh? :juggle:
heh

I think so too.

Wouldn't work. It's fine-tuning a fundamentally flawed system - like polishing turd. The proposal introduces yet more complexity into an already over-complicated structure.

Simplification is key. Reducing systemic inefficiencies and distortions are key.

1. Remove the OMV, PARF, ARF nonsense
==================================

Let cars trade at their intrinsic values, without complex taxes and rebates -- ie. "body price"
This establish an efficient primary and secondary market, free from all distortions

We have a whole bureaucracy and industry running around this antiquated system -- release it.


2. Keep, simplify and refine COEs.
===========================

Stop letting dealers bid for COEs. They more often than not drive prices

Make COEs transferable within the 10 year period.
You can change cars using same COE. When you sell your car, the buyer then source for COE

Establish secondary COE trading platform.
Imagine it like a 10 year bond. You can either bid full 10-year COE from issuer (LTA), or buy less than 10 yr COEs from secondary market. The COEs can be traded on an open exchange just like stocks and bonds, with 120 monthly periods. Can't afford 10 year COE? Go for 2 years. FT only here for 3 years? Buy COEs with 3 years left.

3. Reduce financing
================

100% 10 years is nuts. 7 year 70% should be more than enough. You shouldn't buy if you can't afford to put 30% down.

All 3 points are very valid.

 

[iScoupe]

Re: Fairer Way To Bid For COEs

Life is not fair.... especially in SG....

agree if not, mock drive the new 86 or BRZ liao.

 

[E92-Lighting]

Re: Fairer Way To Bid For COEs

BMW's are so cheap in the States, 500 USD is enough for 10000 miles a year per month + insurance

 

[sszone]

Re: Fairer Way To Bid For COEs

not suan-ing in the writer....more towards suan-ing the bureaucracy.....listen to the public? my foot

yay...let's emigrate to US

 

[dash]

Re: Fairer Way To Bid For COEs

lets all go MA n book M cars!

 

[Red_Bean_Bun]

Re: Fairer Way To Bid For COEs

The point is missed with what is suggested. The idea of the COE is to regulate the number of cars on the road. The doctor's idea is logical - basically to tier the COE and have a mechanism to allow a more appropriate way to distribute the COEs.

What you are suggesting centers on improving the transactional aspect of the system - like a consumer saying I want it cheap and good and I don't care about anything else.

The macro economic and geographical perspective of the country is ignored with your suggestion.

Wouldn't work. It's fine-tuning a fundamentally flawed system - like polishing turd. The proposal introduces yet more complexity into an already over-complicated structure.

Simplification is key. Reducing systemic inefficiencies and distortions are key.

1. Remove the OMV, PARF, ARF nonsense
==================================

Let cars trade at their intrinsic values, without complex taxes and rebates -- ie. "body price"
This establish an efficient primary and secondary market, free from all distortions

We have a whole bureaucracy and industry running around this antiquated system -- release it.


2. Keep, simplify and refine COEs.
===========================

Stop letting dealers bid for COEs. They more often than not drive prices

Make COEs transferable within the 10 year period.
You can change cars using same COE. When you sell your car, the buyer then source for COE

Establish secondary COE trading platform.
Imagine it like a 10 year bond. You can either bid full 10-year COE from issuer (LTA), or buy less than 10 yr COEs from secondary market. The COEs can be traded on an open exchange just like stocks and bonds, with 120 monthly periods. Can't afford 10 year COE? Go for 2 years. FT only here for 3 years? Buy COEs with 3 years left.

3. Reduce financing
================

100% 10 years is nuts. 7 year 70% should be more than enough. You shouldn't buy if you can't afford to put 30% down.

 

[DriveAllDay]

Re: Fairer Way To Bid For COEs

The point is missed with what is suggested. The idea of the COE is to regulate the number of cars on the road. The doctor's idea is logical - basically to tier the COE and have a mechanism to allow a more appropriate way to distribute the COEs.

What you are suggesting centers on improving the transactional aspect of the system - like a consumer saying I want it cheap and good and I don't care about anything else.

The macro economic and geographical perspective of the country is ignored with your suggestion.

Not really.

What the Dr. wanted to do was to change the way the COEs are distributed. So he proposed micro-segmenting the allocations.

Fine, except the whole pricing and taxing mechanisms were fraud with inefficiency, protectionism, mis-aligned interests and loop holes for exploitation. Only in such inefficient system can a Singapore dealer make higher gross profit margin (selling price less OMV, registration, tax, and COE) than the SELLING PRICE of other countries' dealers. E.g. Stuggart makes SGD80K gross profit from each Boxster. Porsche Mayfair in UK SELLS similarly configured Boxster for SGD78K (ex-VAT).

In current system - government and dealers win. Everyone else loses.

If you don't fix the fundamentals, micro-adjusting the current structure is pointless. Hence the polishing turd analogy.

 

[Terry]

Re: Fairer Way To Bid For COEs

$540k for the ferrari COE ?

i think the writer is siao

 

[S2k]

Re: Fairer Way To Bid For COEs

i agree with terry

 

[st8800]

Re: Fairer Way To Bid For COEs

Because u wanna buy Avantador next....

 

[S2k]

Re: Fairer Way To Bid For COEs

1:8 scale


kenn teach me one more atas

 

[Red_Bean_Bun]

Re: Fairer Way To Bid For COEs

You can't compare it that way. Taxes are inevitable if they don't get it through cars - they will get it through your income. If you look at the tax regime in Europe, US and Oz - SG is considered relatively low.

Singapore on the other is land scarced. So the tax regime for cars is designed with that in mind.

Not really.

What the Dr. wanted to do was to change the way the COEs are distributed. So he proposed micro-segmenting the allocations.

Fine, except the whole pricing and taxing mechanisms were fraud with inefficiency, protectionism, mis-aligned interests and loop holes for exploitation. Only in such inefficient system can a Singapore dealer make higher gross profit margin (selling price less OMV, registration, tax, and COE) than the SELLING PRICE of other countries' dealers. E.g. Stuggart makes SGD80K gross profit from each Boxster. Porsche Mayfair in UK SELLS similarly configured Boxster for SGD78K (ex-VAT).

In current system - government and dealers win. Everyone else loses.

If you don't fix the fundamentals, micro-adjusting the current structure is pointless. Hence the polishing turd analogy.

 

[04M3]

Re: Fairer Way To Bid For COEs

i don't understand when cars started becoming a basic right. our base tax rate is low enough (corporate and personal). don't understand how people can act like it's their god given right to own a car. you have a right when you can afford the cost. simple as that, isn't it?

they shouldn't never have loosen the quota, and allowed $10k COEs in the first place. then the roads wouldn't be so crowded, since everyone has an issue with how crowded it is. and nationalise our public transport, and spend the COE funds on improving public transport.

 

[Rocky99]

Re: Fairer Way To Bid For COEs

How about this? Is it very cruel?

I suggest COE bidding can be done using the way LTA does for their VRN bidding.

The winners who secure the COE will pay LTA the amount they submitted in their bid. Every winner here pays a different amount in this closed bidding, compared with the current open bidding system in which all winners pay the same amount.

If Mr Millionaire decides to be the 1st owner of the M6 coupe and badly needs a COE at that point, he can comfortably secure it with a bid at 200k and pay 200k to LTA. We can thank him for his contribution to nation building. Other car buyers can try their luck with a smaller sum that they think they willing to part.

In the long run, COE prices might not climb that high because car buyers will just be very careful with how much they want to bid as most of them don't want to be fools to overpay for their COE. On the other hand, the current system works on the basis of herd mentality. If a car buyer sees 500 other people are paying 90k for their COE, he will think that he is not the only one who is insane.

Occurred to me after several failed attempts to secure my desired 2 digit VRN. Eventually I gave up the idea because I don't know how much money i have to sink into it. Looking back, I don't regret not submitting higher bids back then. Savings were better spent on other things and PML later got me a nice 4 digit for my new car. And I realised 2 digit VRN can get u easily spotted at the wrong places. Had it been open bidding system, I would have been tempted to raise my bid repeatedly to win..