COE Prediction - April 2009 1st Bidding Exercise

The approaching bidding exercise is the first one with quota reduced in the cut in COE quota for the period 2009/2010. LTA has not yet announced the actual quota for the first exercise but I have computed the estimates: 1,395 COEs for Category A, 760 COEs for Category B and 716 COEs for Category E (Open).

With the three weeks' elapse time from the March 2nd Bidding Exercise, I believe that the sales orders will accumulate in numbers and coupled with the reduced supply, the COE quota premium should see strong support. The recent stock market rally from the bottom in early March may also boost some confidence.

Prediction on March 27:
Category A: $6,000-7,000
Category B: $6,000-7,000

Verdict on April 8:
Category A: $7,090
Category B: $7,501

Used Car versus New Car

Anonymous said...
"Hi Skxly,

Great to come across your blogs, you did a very good job on providing us the very useful infos and tools :) I'm looking for a cheaper car as my daily transport for working, i don't care whether it's used car or new car as long as it's cheaper.

I'm a new learner on buying car. Would you mind to give me opinion among 2 cars below, which one is value to buy?

USED CAR
========
Date Posted 18-Mar-2009
Ad ID CAR-28873
Expiry Date 10-Jul-2009
Description
Make & Model Kia Picanto GL 1.1

Price S$ 13,500
Type Hatchback

Engine Capacity 1,086 CC

Transmission Manual

Additional Information Description:

* Well Maintained And Marvellous Condition
* Accident Free
* Full Original Condition

OMV S$ 7,445
Depreciation S$ 1,705 / year
Registration Date 25/04/2006
COE N.A.
COE Expiry 24-Apr-2016
Number of Owners 1
Mileage 22,000 km

NEW CAR
=======
Price:
S$ 29,999
Last Updated:
05 Mar 2009
COE (CAT A):
S$ 4,890 (Last updated: 04 Mar 2009)
Monthly Instalment:
N.A.
Vehicle Type:
Hatchback
Engine Capacity:
1,086 CC
Transmission:
Manual

The price showned in USED CAR ad is the total price that I need to pay? Does it include the COE? I find quite confusing to read the ad.. Need separate MOV payment or it alraedy included in the price stated? If the Total price is 0k or below, i plan to pay by cash.

Otherwise, anything above 20k i need to take up loan. The new car price included COE? The ad states price is inclusive of registratration, road tax, etc.. But i dunno the registration meant for COE or not."

skxly:

Well, a used car should always be cheaper than a brand new car since the valuation will fall steeply in the earlier years of usage. The other exception is when COE quota premium increases offset the depreciation.

You should check with the used car dealer about the advertisement and get the breakdown details of all payment components. One additional payment for used car is the transfer fees payable to LTA. The price $13,500 does not result in a depreciation of $1,705 over 7 years; it should be $1,397 if $13,500 is the final price you pay. I believe that $1,705 includes the loan interest, transfer fees and others.

If you buy the Picanto new, your depreciation is $2,628 per year over the 10 years. Your consideration should be centered on the condition of the used car. If it is very road worthy and free of maintenance trouble, the used one is an obvious choice from the economic perspective. You can use the tool at my blog post Total Cost of Ownership to understand how much you will have to spend on each option.

Hope this helps. Remember that you have to pay a premium to have a new car...

COE Prediction - March 2009 2nd Bidding Exercise

With the LTA announcement about the cut in COE quota for 2009/2010, I have computed the changes which would result in the following reduction in the average COEs per bidding exercise:

Category	2008/2009	2009/2010	#Reduction	%Reduction
A	1,938	1,395	543	28%
B	1,099	760	339	31%
E	814	716	98	12%

The March 2nd Bidding Exercise will be the last one from the 2008/2009 quota. The bidding should be quite competitive as dealers try to secure the COEs before the supply crunch kicks in.

Prediction on March 11:
Category A: $5,000-6,000
Category B: $6,000-7,000

Verdict on March 18:
Category A: $5,116
Category B: $5,001