Where are the good news? Nowhere to be found. With the financial turmoil creating crisis for many, fewer motorists are considering replacing their rides. In fact, the alternative on renewing COE for vehicles near age of 10 at the Prevailing Quota Premium (PQP) is becoming attractive for cash-strapped motorists whose vehicles are in good condition and road worthiness. Thus, it only cost $4,100 and $3,700, in addition to the scrap value (probably fully paid up) and higher road tax, to extend the use of Category A and B vehicles for 5 more years. If your COE expiry is due in 2009, you may want to consider doing so as PQP will continue to trend downwards. I wonder if LTA is going to change the regulation to discourage these renewals.
For serious buyers, I think this is the best time to try bidding the COE by themselves before going to the showroom.
Prediction on January 14:
Category A: $3,000-4,000
Category B: $1,000-2,000
Verdict on January 21:
Category A: $2,693
Category B: $200
2 comments:
Hi,
Nice informative website you have here! It's a pity that I only chance upon it today. But I am sure I will frequent your website for more information on the cost of car ownership! I have learnt quite a number of things going through your past entries!
By the way, your prediction for the COE is very accurate!
Can I ask for your opinion? Do you think the Goverment will reduce the ARF in the Budget 2009 annoucement? Would like to predict if that will reduce the cost of cars further.
Secondly, something that is puzzling me is the increase of car financing interest rates across the board in the beginning of Jan 2009. I though that is against the norm since interest rates should normally be on the downward trend to further stimulate consumer spending? Care to share your view?
Cheers,
Jerry
Jerry, IMO the government will not reduce ARF since it is universally applied across all motorist and hard to undo when good times return. One probable carrot is road tax rebate to goods vehicles to help struggling businesses combat the economic crisis. Another change may be introduced on the road tax structure for cars with renewed COE (>10 years) to make it more costly for such cars as PQP is trending down and go against the target to ensure only road-worthy vehicles are on the roads.
Interest rate? No comment as I am not a trained finance person to advise on that. I think it is trending up to balance with the higher risk of default and lower volume.
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