The New COE Rule and Its Effect on <b>Car Prices</b> (2013 <b>...</b> |
| The New COE Rule and Its Effect on <b>Car Prices</b> (2013 <b>...</b> Posted: 10 Sep 2013 10:28 PM PDT By now, you may have heard about the new COE rules. And if you've come within 10 metres of any car showroom, you'll notice car salesmen standing around with stunned smiles, like potheads who just broke into the Narcotics Bureau's evidence room. Turns out these salesmen have buyers lining up around the block. I prodded one out of his reverie, to ask a few questions: New COE RuleStarting from February 2014, cars with engine power exceeding 97 kilowatts, or 130 brake horsepower, will be in Cat B. (If you can't tell between Cat B and Garfield, let alone Cat A, look up the COE basics before reading this). Around 40 car models are being "upgraded" this way, like the Mercedes Benz C180, BMW 316i, Mazda RX 8. If you're thinking of buying, you'd better check if your desired model's one of them (here's a full list). And do it with a good pair of running shoes on. According to car salesman "Liu" (not his real name), the latest change is probably going to start raising car prices, even before 2014: "If you're intending to get a car that will soon be in Cat B, I advise you to act fast," Liu says, "The race is not against the 2014 deadline. The race is against rising COE prices right now." According to Liu, two possible effects of the new ruling will be:
A Momentary Spike in Cat A Prices Congratulations, here are the keys. And once you triple your income, you might even get the car that goes with it. Whenever a tweak to the COE happens, Singaporeans react in utterly predictable fashion. That is, like a bull that just sat its bollocks on an active ant hill. There's always a desperate, headlong charge to "buy before the changes". Liu shrugs it off: "Whenever policy changes occur, Singaporeans will become very kiasu. Even those who were doubtful about car ownership will suddenly become very firm… …a lot of people will try to get their car before it joins Cat B, so Cat A prices will suddenly heat up. Buyers are right to act with urgency." But how much higher will Cat A prices go? "This one is hard to say. There's a rush, but on the other hand, the loan curbs have made car ownership more challenging. I guess we will see it reach around $80k to $85k. But I am not certain. It's very hard to predict right now." Higher Cat B Prices in 2014 I predict rich people will be willing to pay more. I would know. That'll be $799.90, GST exclusive. So if a whole bunch of popular car models (BMWs, Mercedes, etc.) move to Cat B, will there still be a demand for them? Or will people give up and get cheaper cars? "Due to the loan curbs, it is mainly the cash rich who are considering car ownership for now. This is the reality of the market," Liu says, "The majority of my prospects in this market are the ones who have substantial purchasing power. So to answer your question, no. I think there is demand for good car models, and most will not want to compromise." Liu believes this will lead to more aggressive bidding for Cat B COEs, after the changes in 2014: "This is another good reason to own a car now, if you can. When the car gets to Cat B next year, if you still want it, you will face aggressive bidding. And you will be going up against bidders with a lot of purchasing power." That's just a prediction, mind you. Follow us on Facebook, and we'll keep you updated on it. I also asked Liu if he has… Any Advice for Car Buyers Right Now? Sir, about our car prices? Mercedes now lists Nike as its closest competitor. "Don't rush just because you see everybody rush," Liu suggests, "You have to consider your own situation. If a car is urgent for advancing your career, or you have family needs that will not go away, then I think you should act decisively. But if your need is not so urgent, I advise you to save up. Make sure you buy a car and not a burden." Liu also suggests that you visit as many dealerships as you can, because: "Some dealerships will be looking to clear out the affected models, before they join Cat B. This is unlikely for highly popular models, like the C180 (Mercedes Benz C180) as they will still be in demand, even as Cat B cars. But for models with less demand, there will definitely be some urgency to sell them off asap. Someone out there may be willing to lower their commission, to make these cars more affordable." There's also the growing option of leasing a car (if absolutely necessary), which is covered in our previous article here. Image Credits:  |
| You are subscribed to email updates from car prices - Google Blog Search To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
No comments:
Post a Comment