SKF5769X

Reckless and not needed. Leave such "racing" to the tracks and not on the public roads. It is endangering everyone's life.

COE prices mostly down

Certificate of Entitlement (COE) prices for vehicles ended lower in all but two categories in the latest bidding exercise on Wednesday.

The COE premium for small cars ended higher, bucking the downward trend seen in the previous bidding rounds.

The premium for cars up to 1,600cc had seen a downward trend since the government's moves to rein in car loans kicked in on 26 February.

But on Wednesday, the premium rose 2.4 per cent or S$1,468 to end at S$62,497, exceeding the COE price for big cars which slid from S$67,010 a fortnight ago to end at S$62,000, a fall of 7.5 per cent or S$5,010.

COE price in the Open Category also dropped, from S$66,989 to S$62,000 - a fall of S$4,989 or 7.5 per cent.

Meanwhile the COE price for commercial vehicles rose S$2,491 or 4.4 per cent to S$58,502.

For motorcycles, the premium dipped S$21 or 1.2 per cent to around S$1,791.

Raymond Tang, honorary secretary of Singapore Vehicle Traders Association, said: "The premium for small cars has gone up, but it's not significant. I think it's quite stable now.

"The next moment that we have to see is: how are they going to restructure the COE categories. Maybe there might be some changes...then we might see some changes in the premiums."

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Once again, Cat A is higher than Cat B and Open Cat, which isn't the usual case. It has been noted by bidders that there has been an increase in quota in the bigger cars, possibly due to more of them being scrapped.

The increased ARF must be hitting the bigger cars quite badly that even the rich are going for the smaller models albeit still in the luxurious brands like the 316i, C180 n the various VW models.

COE premiums mostly fall following latest round of bidding

Certificate of Entitlement (COE) premiums for vehicles mostly decreased at the end of the latest bidding exercise today, with Category A prices falling to the lowest since July last year.

COE premiums for small cars (1,600cc and below) continued to drop and closed at 4.95 per cent lower at S$61,029, compared with S$64,209 in the previous bidding exercise.

Premiums for big cars (1,601cc and above) decreased by 9.32 per cent from S$73,900 to S$67,010.

In the Open category, where COEs can be used for any vehicle type but end up mainly for cars, the premium decreased by 8.61 per cent to S$66,989.

The COE premium for commercial vehicles – the only category to rise – increased by 3.51 per cent to S$56,011, while the premium for two-wheelers decreased by 5.08 per cent to S$1,812.

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Premiums are getting less crazier with each bidding. Maybe it will hit the minimums just before the 60-day period ends when most car buyers will choose to go for the more affordable second hand cars with a more relaxed loan policy.

Used car showrooms see visitor surge

Used car dealers saw a surge in visitor numbers to their showrooms, after the MAS announced on Friday that loan restrictions on some used cars would be suspended for 60 days from April 6.

Following feedback from the Singapore Vehicle Traders Association, the Monetary Authority of Singapore (MAS) lifted temporarily its curbs on vehicles that were in stock or acquired before February 25, when the restrictions were announced.

The MAS curbs limit car loans to no more than 60 per cent of the purchase price and a tenure of not more than five years for vehicles with an open market value (OMV) of S$20,000 or less. When the OMV is more than S$20,000, a tighter limit of 50 per cent will be imposed.

To buy, or not to buy.

That was the question on the minds of those who went shopping for a second-hand car at showrooms in Ubi on Saturday.

But they have only up till 4 June to make up their minds.

A man at a showroom said the 60-day reprieve is a good time "to look around" while another potential buyer said "there is a window for us to do it, so we better do it as fast, as soon as possible".

The temporary lifting of restrictions is good news for second-hand car dealers who saw a drop in demand for their vehicles since the curbs were rolled out.

Eric Liew, general manager of Fugen Automobile, said: "I believe that in this short term, the measure will really help our business. I think more people are already coming in, looking at the cars right now."

But car dealers predict sales would not pick up until the third week, as consumers wait out for discounts.

Some dealers are considering offering discounts of up to 5 per cent for small cars and up to 10 per cent for big cars during the 60-day window.

They believe small second-hand cars will be popular among buyers.

Once the 60-day period is up, some dealers say they will scale down their business.

Fugen Automobile's Eric Liew said: "Looking forward, I would say that it's really very uncertain. Because after these 60 days, it will be back to the restrictions, and then we can foresee that most probably it'll become a very big slowdown."

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Is 5-10% discount enough to entice potential buyers to pounce? This weekend will be like Chinatown during Chinese New Year period for the second hand car showrooms. The buyers will be like sharks circling their prey, going around and having a look at their potential purchase.

The waiting game begins, and the dealers better give much more attractive packages right now than to start massive slashes to their prices as the 60-day period nears the end.

MAS temporarily lifts current curbs on used car loans

Current restrictions on car loans for the purchase of used cars will be temporarily lifted from 6 April for 60 days.

This applies to used cars that were part of car dealers' inventory before the restrictions were introduced on 25 February 2013.

In a statement, the Monetary Authority of Singapore (MAS) said used cars registered under the Land Transport Authority's Temporary Transfer Scheme (TTS) as of 4 March 2013 will be eligible for this concession.

MAS said the pool of used cars registered under the TTS as of 4 March 2013 comprises less than 7,000 cars.

MAS said it expects that much of this inventory can be cleared within a period of 60 days. After this, the financial restrictions will apply.

MAS said it has taken into account feedback from the Singapore Vehicle Traders Association (SVTA) on the state of the used car industry.

It said it would not be possible to relieve the industry from the impact of the financing restrictions on an on-going basis.

It said the two-month relaxation of the rules for the pre-existing used car inventory will help the industry adjust to the new conditions.

SVTA's honorary secretary Raymond Tang said: "The Singapore Vehicle Traders Association has held dialogues with them, and let them understand the situation of the market and also to let them know how the market has been working.

"We have appealed to them several times. We felt it might be better if they can do other things, maybe including improving the quantum of the car loans percentage.

"To some consumers, if they need a car, there is a breathing room of two months to go into the used car market and purchase.”

But some dealers are still cautious.

One told Channel NewsAsia that the 60-day period is short to gauge the effectiveness of the move.

They said a period of six months to a year is more ideal.

Matthias Goh, a second-hand car dealer at Juzt Carz, said: "It's still good news, we can try to clear as much stock as possible because with MAS announcing this, people might want to bring back the idea of buying another car.

"But that's for the next couple of months, but after that we will not know what the future will be like. It's very difficult for us to say but definitely good news for us right now."

MAS said it will continue to monitor developments in the car market and Certificate of Entitlement (COE) premiums. It will recalibrate the financing restrictions for new and used cars when appropriate.

Meanwhile motor vehicle and residential property loan restrictions will be extended to licensed moneylenders from 6 April, said a statement from the Ministry of Law. It said a new licence condition was issued to moneylenders on Friday.

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What an unexpected turn of events, but temporary though. This crucial 60 days shall be a life line for the second hand car dealers. It will be a battle between them and the buyers, to see who is the more desperate one. And if bargaining trends don't change, buyers will take this chance to snatch a good price when nearing the deadline of 60 days.

Dealers on the other hand, this is probably their final chance to clear their inventory and "chop" the buyers before they scale down their business, or even close shop altogether. So to buyers, beware if they promise you a super package of warranty and such, 'cause they might no longer be running a business after this 60 days is over. If anything goes wrong, you might have nobody to fall back on to claim anything.

Across the street where showrooms are selling the new cars, this period will be a super lull one for them since the loan curbs will continue to apply to them. So we shall see some very interesting COE bidding prices with possibly less people buying new cars.

That being said, I urge all car buyers to do your finances wisely and do not overstretch yourself taking 100% loan amount and maximum repayment period. Buy what you need and can afford.