Wednesday, January 28, 2009

COE Prediction - February 2009 1st Bidding Exercise

Extracted from Forum discussion: Is this a good time to buy car? (Source: HardwareZone)

If you are a new buyer, I think it is best to buy within the next three bidding exercises before LTA announces the COE Quota for 2009/2010. Industry experts think it may shrink by 30% from last year's quota and quota premium may reverse the downtrend thereafter, or at least get support from less supply. If the COE quota for 2009/2010 is indeed reduced by about 30%, keen buyers will want to secure their COEs before the others and the quota premium will rebound (herd instinct). The strength of the rebound will also depend on the economic outlook in March.

If you are thinking of upgrading your ride, you should be financially sound or quite sure that you can hold your job if you are taking out a loan for the new ride. Another consideration is the road worthiness of the current ride and cost to operate your ride for the balance of the COE validity. You should know how much cash goes down the drain when you trade in.

Prediction is made from current facts and data so I think that is a reasonable estimate:
-Fewer cars are being scrapped (source: LTA)
-Car growth rate is reduced to 1.5% next year from the 3% in previous years (source: AsiaOne)
-LTA also wants the COE system to stay relevant in sustaining the overall transportation system.

Judgment of the prediction will be known on the day of announcement, so stay tuned.

Prediction on January 28:
Category A: $1,000-2,000
Category B: $1-1,000

Verdict on February 4:
Category A: $1,020
Category B: $689

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