Monday, February 4, 2008

Opportunity for a cheap buy?

Since the LTA announcement that ARF will be reduced by a ten percentage point from the March 1st COE and the Road Tax reduction by 15% from July 2008, the motoring industry is flushed with discussions of whether to hold purchases till the change is effected. For the Category A COE, the savings is lower at about $1-2K while the Category B COE will realize a much higher savings depending on the size of the engine.

The trend of COE quota premium over the last two years also show a steep decline in the run-up to the Lunar New Year when successful bidders will not be able to collect their new rides in time to celebrate the Lunar New Year. Almost all Chinese motorists will greet the New Lunar Year with a full tank of petrol and a new car is certainly a bonus. COE quota premium dipped by 50% in this scenario in 2007 and by 20% in 2006.

But is it good to have a low COE quota premium? It depends on the car price. If you pay high but got a low COE quota premium, you are at the losing end. However, if you get back a sizable rebate, then you are getting a good deal. So look out for a low price with high COE rebate .... At the end of the day when you decide to sell, your low-COE used car is preferred over a high-COE used car since the price should be lower.

In the Singapore motoring market, there is usually an exclusive distributorship for each make. Thus, if you have a particular preferred make, the package that is offered by the distributor will determine if you get a good deal. Parallel Importers (PIs) can give you the leeway but you may be worried about the going concern of their business. Buying a car in Singapore is more of an Art plus you also need to be savvy in Science to sniff out a good deal for the dream car that you want. Alas, it is such a complex decision when the time is ripe for the purchase of a new ride. Good luck to you when the time comes! I am still holding out with my 6-year old MPV.

Want to get a good deal? It all depends on the package from the AD. If you have signed for this round, hopefully your COE rebate is high ... say $12K and quota premium result is $6K, you get $6K back but it also depends on the car price ... High price with high rebate = fair deal or Low price with low rebate = fair deal. Low price with high rebate = good deal ... but that is very unlikely.

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