Re: MAS Imposes Financing Restrictions on Motor Vehicle Loans
60 over pages of healthy discussions with zero chee-hong factor = passion = RESPECT !!!
I think it is pointless arguing on the lines of haves against have-nots. There will be multiple perspectives on any topic, and many will be debatable on social front. But I think there is a line of logic to rationalise with.
First, let's agree that population growth is a given. You might not agree with the 6.9 million figure, but even the opposition agreed with a 5.9 million target. So, there is no qualm that the base of car owners will grow. Against limited land, we all know this has to be capped, sooner or later. Everyone wants to own a car and drive, but this will be impossible. Only some will get the privilege.
Second, let's agree that there are a few methods of controlling car ownership here. Curb supply by restricting COEs, or curb demand. The former measure, we know what will happen. Have happened. COE prices will spiral upwards with little control - recall some COE gurus projected $120-150K target. Rich will have an advantage no matter what. Dealers bid aggressively knowing that at least partial of the rise will be passed on to customers. So a supply squeeze will not work. We will discuss the merits and shortcomings of curbing demand later.
So we know we cannot have indefinite car growth, especially against a growing population and increasingly congested roads.
What else can we do but to curb demand, lower car prices, allow for some car ownership, and not curb car supply?
Some suggested an equitable approach of balloting. That means it is no longer based on affordability against COEs for new cars. But let's see. Every Tom, Dick or Harry will bid for a COE whether they need the car or not, get a full loan and then wait for a used car buyer to pay premium. In fact, the car dealers might actually proposed to the balloted buyer to offload the car back to them to resell the car at a premium to the waiting list of buyers. LPPL. No, in fact, under a balloting system, we might actually see used cars priced at a huge premium to the new cars. Cause even if you can afford, it is up to balloting to decide ownership of new cars, unless, you hunt for a used one. So balloting will not work.
What about a need-based approach? Those with kids, elderly, job requirement should have a priority. In policy execution, this will be tough. Everyone will be coughing out a valid excuse to own a car, some more valid than the others. A ship captain cannot possibly put all passengers in a life raft, so he will stick to the convention of women and kids first. Then the doctor will say "hey I save lives and will be saving more. I should be in the raft !!!" Then the sole breadwinner of a family of 8 will say "I cannot die, my family depends on me." And the others will have valid reasons to stay alive. What are you gonna do if you are the captain? No matter what you do, only a quota-number will live. Those who cannot fit within the quota, the "filtering-out" is a tragic but no-choice approach. You can curse and swear that so many people will be sacrificed, but is there another solution to a single raft? This is what we are facing now, unless we revisit the population growth numbers and car growth numbers again. And yes, Joseph, I sympathise with you, but read on.
Is 50% downpayment a drastic approach? It depends.
If you have been paying a 20-30% downpayment for cars, a Vios at $130K should require $26K-$39K. If the car price retraces to $70K due to a $50K drop in COEs (hypothetically), then your downpayment based on 50% becomes $35K. The increment is $9K maximum, against a $60K drop in car price.
If you have some cash but not enuff to pay for a downpayment for the car you want, listen. DOWNGRADE. There will be used cars within the price double of a set of BBK + bodykit + wheels & tyres. If you die die wanna whine on not driving your desired car, you should be castrated.
If you have been paying zero-down-full-loan and have no cash in hand, you belong to the group that will be priced out. It would be quite counter-intuitive if you said you prefer a $130K Vios with full loan than a $70K Vios. $60K or 85% extra? And we advised people against rolling over credit lines or credit card debts at high interests? Anyhow, financial prudence or having income to own it but no upfront capability is a different discussion. We laugh at office ladies over-spending on handbags with credit cards, but we failed to relook the financial conditions of Mas Sugianto. Pay of $35k per annum works out to be $2917/mth, post CPF 20% = $2333. Installments of $1000? Left $1333. Petrol, road tax, ERP/parking, insurance, servicing.... and if use 2% interest (not even the new 3.25%), actual month payment on 100% loan 10 years is $1,340/mth.... Should he be priced out against the others from a financial perspective? I leave it to you to debate on that, but my point is - he will be sacrificed against car ownership sooner or later when the human tsunami comes in.
Car cooling measures bite | The New Paper
Peace.
I am not posting on behalf of any political party, neither do I carry any political inclination. Just a serious rethink of the merits and shortcomings of MAS's car financing quantum.
60 over pages of healthy discussions with zero chee-hong factor = passion = RESPECT !!!
I think it is pointless arguing on the lines of haves against have-nots. There will be multiple perspectives on any topic, and many will be debatable on social front. But I think there is a line of logic to rationalise with.
First, let's agree that population growth is a given. You might not agree with the 6.9 million figure, but even the opposition agreed with a 5.9 million target. So, there is no qualm that the base of car owners will grow. Against limited land, we all know this has to be capped, sooner or later. Everyone wants to own a car and drive, but this will be impossible. Only some will get the privilege.
Second, let's agree that there are a few methods of controlling car ownership here. Curb supply by restricting COEs, or curb demand. The former measure, we know what will happen. Have happened. COE prices will spiral upwards with little control - recall some COE gurus projected $120-150K target. Rich will have an advantage no matter what. Dealers bid aggressively knowing that at least partial of the rise will be passed on to customers. So a supply squeeze will not work. We will discuss the merits and shortcomings of curbing demand later.
So we know we cannot have indefinite car growth, especially against a growing population and increasingly congested roads.
What else can we do but to curb demand, lower car prices, allow for some car ownership, and not curb car supply?
Some suggested an equitable approach of balloting. That means it is no longer based on affordability against COEs for new cars. But let's see. Every Tom, Dick or Harry will bid for a COE whether they need the car or not, get a full loan and then wait for a used car buyer to pay premium. In fact, the car dealers might actually proposed to the balloted buyer to offload the car back to them to resell the car at a premium to the waiting list of buyers. LPPL. No, in fact, under a balloting system, we might actually see used cars priced at a huge premium to the new cars. Cause even if you can afford, it is up to balloting to decide ownership of new cars, unless, you hunt for a used one. So balloting will not work.
What about a need-based approach? Those with kids, elderly, job requirement should have a priority. In policy execution, this will be tough. Everyone will be coughing out a valid excuse to own a car, some more valid than the others. A ship captain cannot possibly put all passengers in a life raft, so he will stick to the convention of women and kids first. Then the doctor will say "hey I save lives and will be saving more. I should be in the raft !!!" Then the sole breadwinner of a family of 8 will say "I cannot die, my family depends on me." And the others will have valid reasons to stay alive. What are you gonna do if you are the captain? No matter what you do, only a quota-number will live. Those who cannot fit within the quota, the "filtering-out" is a tragic but no-choice approach. You can curse and swear that so many people will be sacrificed, but is there another solution to a single raft? This is what we are facing now, unless we revisit the population growth numbers and car growth numbers again. And yes, Joseph, I sympathise with you, but read on.
Is 50% downpayment a drastic approach? It depends.
If you have been paying a 20-30% downpayment for cars, a Vios at $130K should require $26K-$39K. If the car price retraces to $70K due to a $50K drop in COEs (hypothetically), then your downpayment based on 50% becomes $35K. The increment is $9K maximum, against a $60K drop in car price.
If you have some cash but not enuff to pay for a downpayment for the car you want, listen. DOWNGRADE. There will be used cars within the price double of a set of BBK + bodykit + wheels & tyres. If you die die wanna whine on not driving your desired car, you should be castrated.
If you have been paying zero-down-full-loan and have no cash in hand, you belong to the group that will be priced out. It would be quite counter-intuitive if you said you prefer a $130K Vios with full loan than a $70K Vios. $60K or 85% extra? And we advised people against rolling over credit lines or credit card debts at high interests? Anyhow, financial prudence or having income to own it but no upfront capability is a different discussion. We laugh at office ladies over-spending on handbags with credit cards, but we failed to relook the financial conditions of Mas Sugianto. Pay of $35k per annum works out to be $2917/mth, post CPF 20% = $2333. Installments of $1000? Left $1333. Petrol, road tax, ERP/parking, insurance, servicing.... and if use 2% interest (not even the new 3.25%), actual month payment on 100% loan 10 years is $1,340/mth.... Should he be priced out against the others from a financial perspective? I leave it to you to debate on that, but my point is - he will be sacrificed against car ownership sooner or later when the human tsunami comes in.
Car cooling measures bite | The New Paper
Peace.
I am not posting on behalf of any political party, neither do I carry any political inclination. Just a serious rethink of the merits and shortcomings of MAS's car financing quantum.
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