Singapore Motoring

Make Roads Safe

2011-05-22T11:38:00.002+08:00

Every 6 seconds someone is killed or seriously injured on the world’s roads. With 1.3 million road deaths each year this is a global epidemic comparable to Malaria or Tuberculosis. And like those killer diseases, road crashes prey on the young, the poor and the vulnerable. Yet by comparison to other global killers, road injury is utterly neglected.

Watch the video below and visit the official FIA site Make Roads Safe for more information about this decade-long campaign. You can help to support this cause by adding a web button link to the official site.

For my Twitter visitors, you can retweet RT Make Roads Safe - I pledge to slow down and be cautious in school zones.

Drivers at General Election 2011

2011-05-01T01:10:00.002+08:00

Image source: www.ge.sg

The analogy using motoring was launched by Opposition MP Mr Low Thia Khiang in the first Workers' Party rally on April 28 (Source - The Straits Times):

WP chief Low Thia Khiang, speaking at the party's first rally in a field in Hougang Central, said: 'A co-driver is essential, especially when the road gets tougher to navigate. The co-driver is there to slap the driver when he drives off course or when he goes asleep.

'But, of course, if the driver is friendly and drives responsibly, we just keep talking to him to keep him awake.'

Describing the WP as someone without a driving licence, Mr Low said whether it could get a licence depends on the voters.

He cautioned that without co-drivers, Singaporeans would continue to be taken for a ride.

The analogy from Mr Low is very apt for describing the current political landscape and a series of rebuttal from the ruling party was spawned.

His motoring analogy has triggered my assessment of the state of local motoring for the last five years. I subscribed whole-heartedly to the Land Transport Masterplan (2008) that strives to meet the diverse needs of the people. I also personally felt that it is extremely difficult and complex to balance between the demand of the people and the available resources (supply) like road and transit networks, vehicle population control, etc.

The biggest issue that sticks in my mind is the COE Allocation Formula. Please read my previous post on Messed Up by Formula. The Transport Minister Mr. Raymond Lim seems to keep a low profile and I even had difficulty recalling his name. After the change to the Vehicle Quota System (VQS) Methodology in March 2010 (Source: LTA), his deputy, the Second Transport Minister Ms. Lim Hwee Hua dismissed lightly that the spike in certificate of entitlement (COE) premiums and car prices that week was not caused by changes to a formula to determine the number of replacement COEs (Source: AsiaOne). The flaw in the formula was acknowledged but I did not recall seeing any "apology". You should read how Ms. Lim disproved the correlation of the revised formula to the premium spike - I was simply amused.

The Motor Traders Association of Singapore (MTA) has written to Transport Minister Raymond Lim, in January 2011 to suggest the removal of taxis from the Category A COE quota, and doing away with Category E (open category) COEs (Source: CNA). MTA said taxi operators currently compete with the private car buyer for a COE as they are required to bid for a Category A COE to register their new taxis which add pressure on the Category A COE premiums and taxi operators are in a better position to bid more for COEs being business enterprises. The Transport Ministry said taxi companies made up only a small proportion of about 7% of the total successful bids for Category A COEs from July to December 2010. The ministry added that taxis are allowed to bid for COEs in Category A in recognition of the fact that they are part of the public transport spectrum, albeit at the high end. It said taxi companies replacing their fleet also need not necessarily bid for a new COE. They have the option of renewing expired COEs by paying the Prevailing Quota Premium (PQP).

If recommendations from MTA (made up of expert practitioners in the industry) cannot drive changes at the ministry, the voice of individual motorist is just a whisper in the wind. But on Polling day 7th May, my vote will be counted ...

Messed up by the Formula

2011-04-17T12:30:00.001+08:00

Source - ST701

The Straits Times reported on April 16 that Second-hand car market in high gear - Tight COE supply sees used-car sales on track to hit 10-year high. POWERED by a meagre COE supply, used-car sales are continuing to rev up. In the first quarter of this year, 15,441 cars changed hands, a figure that is more than twice the 6,900 new cars sold, going by figures from the Land Transport Authority.

Sigh ... so how many of you are facing a situation which your current ride's Certificate Of Entitlement is expiring? The statistics indicate that more and more motorists have resorted to buying pre-owned cars. The critical question is whether the COE allocation formula can be tweaked for a balance between demand versus supply and what is the basis for the equilibrum point.

In LTA's current formulation for the quota system, the following are salient points
(a) The vehicle population growth rate has been set at 1.5% per annum for 3 years from 2009 to 2011.

Is this a reasonable target aligned to the population and GDP growth set by the government? Isn't it too low since the Electronic Road Pricing scheme is implemented to charge by usage rather than ownership?

(b) Taxi operators pay the prevailing quota premium (PQP) to replace their taxis within 6 months of de-registration of their taxis. If the taxi is not replaced by paying PQP, the de-registered taxis would be recycled as replacement COEs.

Why is this option not given to citizens but only to taxi operators? I would be glad to pay the PQP to register a new car and deregister my old one when the COE expiry approaches.

(c) COEs that have been successfully secured by bidders but were not utilised during their validity period were recycled.

There were about 250 certificates that were secured but had gone to "waste" as it made business sense for the dealers to forgo the low $5,000 deposit and bid for a lower priced COE in a downtrend.

(d) Category E receives 25% of the de-registrations from in each category.

We will eventually see an increase of luxury cars as most Category E COEs are used to register such cars. I am of the opinion that a single category based on quota premium per 1000 cc should serve the market better. If I register a 1,000 cc car, I pay the quota premium of eg. $10,000. For an expatriate getting a 4.8 l luxury sports car, he will have to pay $48,000.

(e) Adjustments for over-projections in Quota Years 2008 and 2009, as well as expired COEs from 2009 are spread over 22 bidding months from Apr 2010 to January 2012. An adjustment of -3,188 was factored in the 1st 4 months quota (Apr-Jul 2010), and the remaining -9,577 adjustments will be adjusted the next 12 months' quota (Feb 2011 - Jan 2012).

Thus, the tightening will continue until the start of 2012. For prospective upgraders, I would recommend holding out until then if your COE is not expiring.

In the mean time, we should all take good care of our rides and make them last as a new ride is an expensive option for now.

The Bidders must be Crazy

2010-12-26T10:57:00.004+08:00

Chart source: http://www.st701.com/cars/coe

In complete contradiction to my last post that COE Quota Premium is flattening out, we have seen the meteoric rise of the COE Quota Premium past the $70K mark (for Category B and E) over the recent bidding exercises have put "COE" on the top of Yahoo's trending.

The Sunday Times 12 December published a good article "The COE Story" by Christopher Tan (article is reproduced here) that looks at the history of the Vehicle Quota System and traces the ups and downs of Category E (Open) quota premiums. However, the piece that caught my attention is the graphical illustration to the article (text by Feng Zeng Kun and graphics by Marlone Rubio).

Here are the key highlights:
April 1990 - Start of the Vehicle Quota Premium

October 1991 - Car (except Commercial and Open categories) and motorcycle COEs made non-transferable to stop speculators buying and selling them later for a profit.

January 1993 to November 1994 - Most experts believe the rise in COE prices across all categories is fuelled largely by speculation. Some speculators even use the non-transferable COEs to register vehicles and then resell them.

December 1994 to March 1995 - COE prices fall in anticipation of new government measures after quota premium has broken the $100K mark. Between January and March, the government rolls out a slew of measures to stop speculation. These include disallowing reselling of new vehicles within 3 months of purchase and imposing an additional fee for resale in the next 3 months.

January 1998 - Asian Financial Crisis hits Singapore and quota premium dropped from over $70K to the $30-40K range in early 1998.

April 1999 - COE supply formula revised to correct supply and demand time lag. Previously, the number of COEs for any year was determined by how many vehicles were deregistered the previous year. The new system estimates how many will be deregistered for the current year and issues that number of COEs. Revisions are made every six months to correct over- or under-projections.

July 2001 - An open bidding system is introduced for greater transparency. For the first time people can see the number of bids and the quantum of each bid. The COE quota each month are divided equally between the open and closed bidding systems.

April 2002 - The open bidding system completely replaces the closed bidding system.

January 2005 to March 2010 - Over-supply of COEs leads to faster-than-expected growth in vehicle population.

January 2010 - COE prices start to soar in anticipation of sharp supply cut and new quota formula.

March 2010 - Government announces new supply formula, reverting to basing COE quotas on past vehicle deregistrations. But this time, quotas are set every six months, instead of annually.

April 2010 - COE prices reach highest levels in 10 years with premium hitting $49K.

December 2010 - News of another quota shrinkage sparks panic bidding, sending premium to $76K.

After anti-speculation measures and limits to car loans are rolled out in the first quarter of 1995, COE prices headed south. Besides the blips in 1997, the downtrend lasted more than a decade.

So what is causing the COE quota premiums to soar in 2010? Here are the top three causes in my opinion:

1. COE supply formula - the reversion to basing on actual deregistration has sharply brought down supply and that causes a vicious cycle of existing vehicle owners delaying their replacement purchase.

2. Car population growth allowance - the government reduced the allowable annual growth rate for vehicle population to 1.5% from 3.0% in 2008. The subdued rate simply cannot support the influx of new buyers and aspiring upgraders. Quota premiums have already started to creep up in 2009.

3. Singapore population growth - The latest 2010 census counted the population at 5,076,700. With about 1.3 million foreigners working here, there should be many professionals who can afford luxury cars. Do you know that Mercedes and BMW are in the top three makes for new registrations? The data is available at onemotoring.com.sg.

It is extremely complex to balance usability, affordability and fairness in the Vehicle Quota System. We will definitely see new measures in 2011, especially with the General Election anticipated in the second quarter.

The option of changing the bidding system to pay what you bid is mentioned by the chairman of the GPC for Transport in a recent interview - I was wondering if he has gotten the idea from my recent blog post "Time for Pay as You Bid?". I feel that it should only apply to dealer's bid since individual bidder should not be penalized. It is also not possible to ban dealers from bidding as some buyers do not know how to bid by themselves (related post: Bid for your own COE)

Here's wishing you a Happy New Year and welcome 2011!

COE Quota Premium is Flattening Out

2010-10-23T22:26:00.000+08:00

Chart source: http://www.st701.com/cars/coe

Category B COE Quota Premium is now fluctuating between the narrow band of $40-45K for the last seven bidding exercise. With the limited number of COEs at each bidding exercise, there are many motorists waiting on the sidelines to decide if they want to upgrade their rides. The phenomenon of such flat-line is associated with the lack of news and events to influence the market to rise or fall.

Is this good or bad news to potential buyers? Well, it is neither as there is really no news. I took a closer look at the Category A and Category E - they are consistent with Category B and do not give any clue to where COE quota premium is heading.

However, Category C is trending downwards which indicates that businesses are not rushing to replace ageing fleet, so business sentiment is somewhat cautious. Category D for motorcycles is trending upwards which indicates that the cheaper mode of transport is the only option for motor(cycl)ists priced out of the four-wheel markets.

What is my gut feel? It is unlikely to see a crash back to 2009 level of sub-$10K but I think the market will stay flat and may soften into 2011 as the world economies sputter under uncertain condition. For Category A buyers, you can consider it when quota premium is between $20-30K. For Category B buyers, you should be able to afford to go in even at current level.

Give Way to YOG

2010-08-15T15:54:00.000+08:00

Happy 45th Birthday to Singapore! Fly Our flag.

2010-08-09T11:40:00.003+08:00

Happy Birthday! I like this music video of the Singapore National Day Parade 2010 theme song, especially the closing part where our flags are put up on the facade of the housing flat.

Have you fly the flag on your ride? I have put up the decal from Esso on mine.

Overtrade to Improve Mileage?

2010-07-12T15:03:00.001+08:00

Confused SG Driver has requested for advice via comment on my earlier post Overtrade for a New Ride?

Confused SG Driver said...
"Hi,
As mentioned by many other visitors to your blog, the information you have presented here is truly useful and concise!

And like many people who visit your blog, I'm currently looking to upgrade my present car. However, I'm not that great with detailed numbers and am perhaps not very adept at translating the full meaning and implications of the data which were calculated after entering them into your most detailed "used car" spreadsheet. As such, my present situation is like so:

1)I currently drive a second hand Mazda 3. I purchased this last year October (10/2009) at a price of $34k. My current monthly installment is $550 and my current mileage is approximately 79k. It was originally registered in 2005 october.

2)I understand that it sounds silly to sell my present car being that I have only bought it less than a year ago.However, I made the mistake of purchasing a '05 mazda 3 which has a appalling Fuel consumption of 10.4km/l, at best. I am in sales and drive alot, having to pump approximately 5 to 6 full tanks of 92 grade petrol at SPC for a cost of approx $70 to $80 per tank PER MONTH.

3)I am looking at a second hand 2009 Toyota Allion which has a highly praised Fuel consumption of around 15 to 17km/l.
A dealer has offered me a trade:To sell my Mazda 3 at $28k(being car paper value of 21k), and a buy of their second hand '09 Allion with a low mileage of less than 20k at a pice of $60k. I am also may be looking at a over trade of around $5k to help to settle all the administrative fees and requirements

So my question would be:

1) Would it be a good time to buy and sell right now(being that all cars are now inflated due to the high COE bidding)? Or should I wait further?

and If I waited further would I lose more money due to petrol costs (or touch wood maintainence costs) of the high fuel consuming Mazda 3?

And also, should I believe the car agent who tells me that ,should I choose to wait till October, they would only be able to export it and thus only be able to offer me much less for it?

Or

Should I buy the Allion in a moment of insanity, how long would I have to drive it before selling it in the future?Would it also make it doubly hard on me to sell it then being that I bought it at a high COE value peroid?

Thank You very much,
Confused SG Driver. "

I empathized the situation that you are currently in. At the end of the (business) day, the dealer will only survive if there is business transaction. Thus, you can tell your story to a dealer and almost every one of them can come up with a deal for you. The key point is that you should make a proper financial analysis of the deal rather than an emotional one which you may experience a second regret.

Although you only numbered one question, I find many question marks in the final paragraph LOL. I will attempt to answer each of them.

Q: Would it be a good time to buy and sell right now(being that all cars are now inflated due to the high COE bidding)? Or should I wait further?
Unfortunately, I am not Paul the Octopus and thus, cannot predict with 100% accuracy where the COE quota premium is trending in the future. If you are buying and selling in back-to-back transactions, then almost anytime is fine since you either "buy low sell low" or "buy high sell high". The real question is whether you really need to change your ride.

Q: and If I waited further would I lose more money due to petrol costs (or touch wood maintenance costs) of the high fuel consuming Mazda 3?
Petrol and maintenance costs are operating costs that you need to incur when you own a car. I don't think you are losing more money unless you do your sums and prove that you spend more per month over the useful lifespan of the Mazda 3.

Q: And also, should I believe the car agent who tells me that ,should I choose to wait till October, they would only be able to export it and thus only be able to offer me much less for it?
Talk is cheap so you should based your computation on the paper value of the car, any trade-in quote by the dealer is just a bonus to you in lowering your cost of upgrading. You may want to also check out online advertisements for used cars similar to the age and make of your ride. The dealer will attempt to sell it at a good profit before exporting the car if it cannot be sold. He will always take the most profitable (or most cost recovered if he made a bad call on a deal) route for himself.

Q: Should I buy the Allion in a moment of insanity, how long would I have to drive it before selling it in the future?Would it also make it doubly hard on me to sell it then being that I bought it at a high COE value period?
Haha, I don't think you should doing anything rash if you are in moments of insanity. The paper value of the car stays the same whether it is a high or low COE value period so that is how much the operating cost of the car should be computed. If the question is how long you need to drive before selling the car without any cash top-up, you can see my post on When is Your Ride Breaking-Even?

Here is how I would recommend that you do your analysis:

1. Compute your monthly financial cost of ownership of the Mazda 3 for two scenarios:
a) the full useful life and add the fuel cost of $80x6 (worse case)
b) till the point of trade-in and add the fuel cost of $80x6 (worse case)

2. Compute your monthly financial cost of ownership of the Allion, including the overtrade amount and fuel cost (expected based on your optimistic assessment)

If you have all the number crunched, you can then make the decision based on the monthly cost of the Mazda 3 over the six years or the combined monthly cost of (1 year Mazda 3 usage plus 9 years Allion usage).

However, I have to warn you that the monthly operating cost is not realized until you fully used the car for its lifespan or when you sell the car.

Without all the actual numbers, I can only advise you to consider the additional fuel cost of the remaining 5 years of the Mazda 3. Based on optimistic fuel saving of 1/3, you will save 1/3x$480 per month = $1,920 over the five years = $9,600. Does it make sense if you are going to incur the $5,000 overtrade, loan prepayment penalty and other costs? Yes, you may improve your mileage but you should also make sure the change will improve your financial health.

I hope this helps. Please also read the following relevant posts for more insight.

Related posts: Lowering Cost of Ownership, Overtrade for a New Ride?, When is Your Ride Breaking-Even?

Give Way to Youth Olympians

2010-07-10T16:59:00.003+08:00

Source: LTA

I am surprised this morning to find new road markings painted along the Pan-Island Expressway - "GIVE WAY OOOOO" (well, the five circles overlap ... oh, that is the Olympic symbol). I am certainly NOT amused when two lanes of the expressway was closed for the LTA contractor to burn more of such markings and traffic slowed to a crawl as all vehicles have to filtered to the only passable lane. A few thoughts immediately crossed my mind:

1. What warrants the "permanent" marking on the road for an event that lasts only two weeks?

2. This large marking cause some noise when I go over them. And I am very concerned about riders' safety when going over the markings in wet weather.

3. Will posters on lighting poles function just as well to educate our motorists to give way to YOG buses or cars? They are probably easier to install and remove. Most importantly, they may cause only minimal inconvenience to other motorists.

4. I remember hearing over the radio news that the YOG budget had over-ran by about three times. Is the road marking one of the extravagant ways of showing the world over YOG broadcast of our "world-class" effort to host the game?

I support the YOG too ... but not this BAD idea.

Red & White

2010-06-27T23:21:00.000+08:00

When I first come across the new parking lots, I thought it was intended to celebrate the approaching National Day since they are painted in a mix of Red & White colour. So are they for casual parking or season parking? Or both?

I find it a pain to drive up many ramps since the lower decks in most multi-storey car parks are painted in Red for season parking. The introduction of this new breed of parking lots should be welcomed by casual "parkers" - these dual-use lots can be used between 7am to 7pm.

Source: ST701 Cars

However, season parking holders are unhappy when they returned before 7pm to find vacant lots only much further away.

I felt that this scheme is much more GREEN to mother earth since visitors no longer need to drive to higher decks to find vacant lots and thus, do not waste fuel.

Who has Hitched a Ride?

2010-05-07T12:45:00.004+08:00

I found this fellow hanging on to my car's radio antenna. It must have been taken for a ride since I parked earlier at a wooded area before driving over to TradeHub21. It is strong to have held tightly to the antenna since I must have driven above 70km/h on the way here.

Here's a close-up ... I still cannot make out if it is a grasshopper or a mantis or just a green cockroach.

Another shot with background of a wall.

Can you tell what insect is it?

Forum's responses:

1. Praying mantis
2. Grasshopper
3. Bush-cricket or katydid

And the interesting note about the web or saliva. So, here's what I found on examining the antenna - see the strand going across the left of the antenna.

Parking Lot Not Enough

2010-04-30T12:43:00.000+08:00

Shortage of parking space is a common problem here with the growing vehicle population. Watch how a creative motorist in Taipei overcome the problem.

Go Where? Go There

2010-04-28T11:46:00.000+08:00

I have been flipping through my good old street directory if I am heading to a new or unknown (to me) destination. On reflecting my unsafe action (still flipping the directory while my car is moving), I felt that I should develop the habit of planning my route before the journey. I have used the online street directories to see the destination in the past and decided to try a site mentioned in the Digital Life section of the Straits Times a few weeks ago - GoThere.sg.

Cool! I like the application for the following reasons:
1. The map has the route highlighted plus other alternate routes, cost and estimated time taken.
2. Options for route are Bus, Train+Bus, Taxi and Car.
3. Useful information like parking rates at car parks near the destination.
4. Option to avoid ERP and expressway for Taxi and Car.

I am sure that there are many other features of the application that I may not have covered above. At the top of my wishlist is for the mobile version be made available soon since I may need to plan my trip when I am away from my laptop.

Test drive the application GoThere today. Planning your trip will not only save you time but makes it a safer drive too.

The Look of a COE

2010-04-21T23:04:00.001+08:00

I had read a discussion thread on My Car Forum asking "What does a COE look like?" and one scanned copy of the COE from 2000 was also posted. Now LTA no longer issues paper COE so all records are electronic. However, LTA does notify successful applicants through mail. In cases where dealers bid on behalf of the buyers, the letters are sent to the dealers.

I am among one of the very few individual bidders and had received the letter entitled "Consolidated Statement for Application for Temporary Certificate of Entitlement" from LTA after the bidding exercise closed.

Here are the scanned images (click on them to view in full size):

Page 1

Page 2

Appendix

The most important piece of information is the Temporary Certificate Of Entitlement Number ("TCOE No." in the appendix) which is used for the vehicle registration. After I have decided on the make and model to buy, the dealer used this TCOE number and my NRIC number to register the car. I did receive a printout of the vehicle registration from LTA upon confirmation but it was no longer in the form of a "log card" from the old days.

Related post: Bid for your own COE

Time for Pay As You Bid?

2010-04-13T11:13:00.002+08:00

Business Times reported that there was just pain but no panic in the recent bidding exercise on April 7 with the result:

Category A Cars/Taxis $34,001
Category B Cars $45,501
Category E Open $49,000

These are statements from the article's interview with car salesmen and dealership owners:

"There were only a handful of new car bookings. If not for the top-ups, the Cat A premium would surely not have increased by so much."

"With the top-up exercise, the distributors had a bigger margin to bid for COEs."

"Bidding was a very painful process. Premiums are so high that my profit margins have disappeared."

I feel that the current bidding system of successful bidders paying the lowest winning bid price does not encourage individual bids. Why?

As all successful bidders pay the same quota premium in the exercise, dealers can price their cars to include the forecasted quota premium plus a buffer to ensure that they make a decent profit plus a bonus should the winning bid be lower than the forecast. After all, the dealers will not be penalized since many buyers take the non-guaranteed bidding option and the dealers will just let the purchase agreement lapsed.

Let me illustrate the two different scenarios:

1. Dampen Demand (late 2008 through 2009)

COE bidding requires a deposit of S$10,000 which is a substantial amount for new buyers. Dealers also offer motor loan up to 100% which covers the COE quota premium. Thus, it is very convenient for buyers to get a COE-inclusive package from the dealers.

Dealers will make windfall profits when COE quota premium heads south since they always priced in the COE quota premium and a buffer for aggressive bidding. On top of that, the COE rebate is mostly set at a low base to return a token sum back to the buyers in the case of a sudden plunge in quota premium. The case in point was the November 2008 2nd bidding exercise when Category A quota premium fell to S$2 and buyers without comprehensive purchase agreement from some parallel importers ended up getting little or no rebate.

Dealers do not usually entertain buyers who are going to bid for their own COEs. The only time that they have a ready price list for ex-COE is the weekend after S$2 quota premium result when they can get orders for walk-in buyers holding those COEs.

2. Uptrend Demand (the past few bidding execises)

After the news that the formula to allocate COEs was released, quota premium started rising rapidly and some buyers were disappointed by the dealers who could not successfully bid for their COEs. One case that made it to the local news and motoring forum is Borneo Motors, distributor for Toyota. I read from MyCarForum that BM failed to get the COE in the later rounds of bidding for buyers who took up the "hefty" discount during the Chinese New Year sale. I was surprised that BM had prepared to bid up to about S$26,000 so BM is technically making a profit (maybe indirectly from their after sales servicing) as long as COE is below that reserve bid price.

These dealers that were caught wrong footed by the quick jump in COE quota premium lose nothing (in cash) and they are also protected legally by the signed agreements. They bore only the lost sales, some damage to the reputation and some bad press. Who truly suffered the most? Genuine buyers who were locked in by the non-guaranteed purchase agreement and are now left in the lurch. Need help from the dealers? The only offer is for the buyers to cough up more cash for COE bidding top-ups.

Another interesting development over the last few months was that LTA lowered the bidding deposit to S$5,000 from October 2009 to September 2010 but I was amused by the second item in the announcement:

2. The COE bid deposit is intended to deter frivolous or speculative bids which deny genuine bidders from getting a COE. LTA has received feedback from motor traders that companies are still facing some cash flow problems. This reduction in the COE bid deposit is a temporary relief measure to help businesses, particularly motor traders and prospective vehicle owners reduce their financing needs and free up funds currently used as deposits.

None of the reasons stated in the announcement addressed individual bidders' need - this revealed that the COE bidding system may only be tweaked to the industry players while individual buyers are sidelined. Why not lower the deposit for individual bidders so as to encourage them to take responsibility to bid?

I believe that the "Pay As You Bid" model will encourage more individual bidders to join the fray. How will the bidding exercise look like? I think there are three groups of bidders:

1. Dealers for luxury make - COE is a small portion of the overall car price, so the package may include a COE at S$50,000 or an auspicious bid at S$88,888. The rich buyer will just factor the COE cost into the purchase.

2. Dealers for mass market make - the buyers are more sensitive to the COE quota premium and the dealers can choose to sell their cars inclusive or exclusive of COE. The dealer may choose to bid more than the agreed component in COE-inclusive deals, forgoing part of their margin.

3. Individual bidders - they will monitor and try to secure the COEs at the lowest cost before heading to the showroom to book a car with a COE in hand.

The biggest advantage of the scheme is that dealers should submit the agreed bid on behalf of buyers (especially those who do not know how to go about bidding by themselves) and thus, the final value of the COE in the sale should no longer be a guessing game. Even though the lowest winning bid is $2, the COE for the other successful bidders are valued at what they had bid.

How will this scheme impact LTA's coffer? In almost all cases, LTA should see an increase in revenue from COE as some motorists are willing to pay more than others to get the car timely. It will also prevent the revenue shortfall in sudden plunges since many of the bids during the S$2 outcome are much higher than the lowest bid. It should be easy to make the change on the IT system.

Related posts: Cheaper to Bid?, Bid for your own COE

Panic Bidding

2010-03-25T12:16:00.000+08:00

Quota premium for all COE categories surge in the latest bidding exercise, responding to the anticipated 28% reduction in COE allocation in the next cycle.

Cat A Cars/Taxis: $28,389 (up $7,587)
Cat B Cars: $36,089 (up $9,700)
Cat E Open: $42,001 (up $14,441)

Many dealers were taken aback by the large increase in this round of aggressive bidding. I am also surprised by the bullish outlook especially for those who chased up the Open category bids.

Here is my take on what is going to happen running up to the next bidding exercise:
1. Dealers are going to increase their selling prices to stay in business. They will try to price competitively but the money for COEs goes to the government, not them.

2. Existing buyers who agree to buy at a price lower than the base cost plus COE will be asked by the smaller dealers to top up for COE. Otherwise, they will continue to bid at the earlier projected level which is bound to lose out in the next few rounds of bidding. Thus, no TOP UP = no NEW CAR.

3. Do you think there are more new buyers? It all depends on the economic outlook. The ones that will suffer most are those who need a car for work or family chores and cannot rely on public transportation. I reckon that the upcoming April 1st bidding exercise will be more subdue after this aggressive round.

It will be wiser for motorists to always track the trend of COE bidding so that one can eliminate the need to spend unnecessarily for a piece of paper. The current Prevailing Quota Premium (PQP) has risen to $21,421 for Category A and $25,190 for Category B. Those whose rides are more than 8 years old could have renew the COE at less than $4,000 (or $2,000 for 5 years) if they have heed my advice in my March 2009 COE prediction then. And those who want a new ride, the best time is to buy during the dip of the economic crisis when demand is at a low. How else can you be "lucky" to win a $2 COE? So ... did I do so? You can bet everything on it.

New COE Allocation Formula, No Prediction Needed

2010-03-16T13:01:00.002+08:00

Transport Minister Raymond Lim announced on March 11 that the change in the formula for COE allocation to address the perennial mismatch of supply and demand. The new formula will result in a "BIG drop in COEs ahead" (The Straits Times, March 12). The change will eliminate the forecast (prediction) of vehicles to be deregistered over 12 months.

In any new system, there is a stabilization period required before the anticipated objective is met. The question is how long will it take before we see only mild fluctuation in the COE Quota Premium. I believe that panic-buying may occur in the near term so we will see erratic result before the dealers price their cars within a reasonable range as the buyers' tolerance is determined.

The current bidding mechanism is that all successful bidders pay the lowest winning bids. I am of the opinion that the "Pay What You Bid" method is likely to result in the following:
1. LTA will collect more from the same pool of COEs since the top bidders may pay much more for their COEs (but they can afford to) and thus, more funds can be allocated into improving the road system to accommodate the growing vehicle population.
2. The rate of increasing bids will be slower as bidders (usually the dealers) are careful not to over-bid to protect their profit margin. However, LTA may need to work with their IT service provider to ensure that the system will not crash due to the overwhelming changes at the close of the bidding exercise.

This may be an ideal time to tweak the bidding system. Perhaps LTA should also be transparent to release data showing the proportion coming from dealers versus individual bidders. If the true intention of the system is to have individual buyer first secure a Certificate of Entitlement before signing on the dotted line at the dealer, then the current bidding system seems to make it easy for dealers to bid on buyers' behalf and thus, may allow them to artificially control the market forces by including COE Quota Premium into car price.

Finally, I also hereby announced that I will no longer predict the COE Quota Premium at each bidding exercise, reason being that if a group of elite public service analysts cannot predict the deregistration of vehicles, I alone do not have sufficient skill and information to predict the bidding outcome 8-) and should just write about motoring in Singapore.

COE Prediction - March 2010 1st Bidding Exercise

2010-03-04T11:30:00.002+08:00

The oversubscribed rate for the February 2nd bidding exercise was 30%(previously 15%) for Category A, 45%(previously 35%) for Category B and 114%(previously 79%) for Category E (Open) COEs. With the imminent change to the COE supply to be tabled at the parliament, motorists eyeing for upgrades or ride refresh are rushing back into their purchases. The likely tweak to the COE supply will be based on a quarterly review of actual vehicles scrapped versus the current annual review. Most industry watchers believe that the supply will be clamped down since the over-estimation in the last cycle has resulted in the vehicle population growing 4.8%, way over the government target cap of 1.5% (Source: Straits Times). Some dealers will be aggressive in their pricing and COE bidding to retain market share. It seems that the days of COE quota premium under $5K are over.

Prediction on March 4:

Category A: $21,000-22,000

Category B: $23,000-24,000

Verdict on March 10:
Category A: $20,802
Category B: $26,389

COE Prediction - February 2010 2nd Bidding Exercise

2010-02-18T10:48:00.003+08:00

Here's wishing everyone a Happy Lunar New Year! Gong Xi Fa Cai!

The oversubscribed rate for the February 1st bidding exercise was 15%(previously 46%) for Category A, 35%(previously 54%) for Category B and 79%(previously 128%) for Category E (Open) COEs. With the CNY holidays falling on February 15 and 16, the upcoming bidding exercise is moved to next week. Thus, the three weeks' elapse time may have allow the dealer to collect some sales orders. I do not think there will be a major fall in quota premium from the post-CNY lull but the anticipated weakness in demand may bring COE quota premium may dip back to the $15-20K range.

Prediction on February 18:
Category A: $15,000-16,000
Category B: $18,000-19,000

Verdict on February 24:
Category A: $20,340
Category B: $23,889

Sniffing for the best Petrol Discount

2010-02-02T16:02:00.007+08:00

Fuel cost makes up a significant part of the car operating cost and less well-off motorists are prudent to sieve out the best discount from the four local players - Caltex, Esso, Shell and SPC. Once you have found the "best" discount, you tend to stick to the routine such as to only pump Esso 5000 and pay with Citibank's Dividend credit car or other players with the respective tie-up with banks. Well, I advise you to periodically check the active motoring forums (eg. My Car Forum) to look for special offer.

I managed to sniff out the introductory offer of $5 discount for $50 gross worth of petrol at Caltex Clementi (ignore the January 15 expiry date above as the offer is extended to the Chinese New Year). As I was queuing to pay there, I was so surprised to see the lady ahead of me handing the cashier the $3 Discount Coupon (which is the regular discount offered at all Caltex kiosks). Gee ... she had just forgone the extra $2 discount! And the cashier just meekly processed the payment without offering the flyer containing the $5 discount vouchers.

The moral of the story - take the trouble to look for deeper discount!

If you want to maximize your savings, you should pump exactly $50 net worth of petrol to yield 10% discount excluding other discount. If you pump full tank, the amount may be $60 to only yield 8.33% discount.

For those who monitor their cars' fuel consumption using the full-tank measure method may still pump the minimum gross $50 worth and add up all distance travelled against all volume pumped during the offer period. I have also unprotect the tool so that you can easily change the formula of the cells to lump together the data of these fillings.

To illustrate the approach, download the file and see the FuelConsumption tab. The fuel consumption during such a promotion from May 7 to May 26 is computed by the total distance from the odometer divided by the sum of the four fillings over the period.

Related post: Good Estimate of Fuel Consumption

Demise of TV Mobile => Restful Journey

2010-01-29T13:48:00.005+08:00

I had to attend several full-day workshops in town this month. Not wanting to pay the expensive parking rates in the Central Business District, I left my car at home and took the bus. I was pleasantly surprised to have restful journeys on the bus and I wondered why it felt so different from the past. Aha! The silent TV screens on the buses announced that TV Mobile has ceased operations at the end of 2009 and it thanked the public for the support.

Support? Potato couches may appreciate TV Mobile but the general public should be glad that the noise pollution has come to a stop. In the first place, I could not believe that LTA had approved the application for such a (dis)service. I felt that the setup of TV Mobile with the loud speakers blasting the programme throughout the bus is a blatant form of "audio-invasion" into the passengers' personal space. It is acceptable to just have the TV screens showing the programme and those watching can tune to FM 89.3 MHz using headsets on their portable devices. We can close our eyes but we cannot shut our ears. Good riddance!

COE Prediction - February 2010 1st Bidding Exercise

2010-01-27T14:00:00.004+08:00

I was surprised that the strong demand for Category A COEs have pushed the quota premium past the $20K mark. The upcoming bidding exercise will be the final one that enables delivery before the China New Year.

The oversubscribed rate for the January 2nd bidding exercise was 46%(previously 17%) for Category A, 54%(previously 30%) for Category B and 128%(previously 78%) for Category E (Open) COEs. With the flood of bids in the last bidding exercise, I predict that the quota premium in this coming exercise will continue to be supported by the stronger demand.

If you have no urge to have a new car by CNY but want to upgrade/update your ride, you may want to consider visiting the showroom after the next bid and sieve out a bargain. If there are not too many unfulfilled orders, COE quota premium may dip back to the $15-20K range.

Prediction on January 27:
Category A: $21,000-22,000
Category B: $22,000-23,000

Verdict on February 3:
Category A: $19,989
Category B: $23,180

COE Prediction - January 2010 2nd Bidding Exercise

2010-01-13T17:33:00.004+08:00

The oversubscribed rate for the January 1st bidding exercise was 17%(previously 28%) for Category A, 30%(previously 23%) for Category B and 78%(previously 75%) for Category E (Open) COEs. With many dealers' more aggressive match to Borneo Motor's discount for Toyota, I predict that the quota premium will see stronger demand across all categories due to anxious buyers wanting to get their new rides for the Chinese New Year.

Prediction on January 13:
Category A: $18,000-19,000
Category B: $20,000-21,000

Verdict on January 20:
Category A: $20,501
Category B: $22,400

Happy New Year!!!

2009-12-31T09:35:00.004+08:00

I read a forum thread on New Year resolution ... but eh, I saw many "wishes" rather than resolutions for 2010. By definition, resolution is a decision to do something or to behave in a certain manner; "he always wrote down his New Year's resolutions" wordnetweb.princeton.edu/perl/webwn.

Life is driven by cause & effect ... so effect will not materialize if you do not put in the effort. So ...
1. If you wish for good health, please eat well and exercise more regularly.
2. If you wish for wealth, please buy more lottery like 4D and Toto (beware the side effect of spending more than you win). You really have better odds in working harder at your job/business.
3. If you wish for happiness, smile more and pass happiness to others.

My 2010 motoring resolution is to have more patience while driving on the road ...
1. If I get annoyed by a fast/reckless motorist, first thought to my mind should be that whatever emergency he/she is attending to will turn out well.
2. If I get annoyed by a slow/hogging motorist, first thought to my mind is that I was like that on the first day on the road after getting my driving licence 8-)

Here's wishing all my blog visitors a better 2010 and safe driving!

COE Prediction - January 2010 1st Bidding Exercise

2009-12-28T13:40:00.004+08:00

The weakness in Category B quota premium signalled no rebound in premium car market despite better economy (as reported in the Business Times). Dealers are also giving more discount to lure buyers facing reduced or no year end bonus.

The oversubscribed rate for the December 2nd bidding exercise was 28%(previously 45%) for Category A, 23%(previously 24%) for Category B and 75%(previously 45%) for Category E (Open) COEs. You can see that the category A COEs for earlier small car purchases had been rapidly fulfilled if you take into account of the 575 Open Category E certificates used.

With many away on holiday travel and shopping fatigue kicking in, I predict that the quota premium may see weakness across all categories.

Prediction on December 28:
Category A: $17,000-18,000
Category B: $16,000-17,000

Verdict on January 6:
Category A: 18,502
Category B: 19,190

Merry Christmas!!!

2009-12-23T15:12:00.007+08:00

Here's wishing all my blog visitors a Merry Christmas and a Happy New Year!

And amidst the celebration and merry making, please be reminded NOT to drink and drive.

COE Prediction - December 2009 2nd Bidding Exercise

2009-12-21T12:12:00.004+08:00

I have been away on vacation to explain the late posting. The oversubscribed rate for the December 1st bidding exercise was 45%(previously 10%) for Category A, 24%(previously 18%) for Category B and 45%(previously 48%) for Category E (Open) COEs. You can see that the resistance for higher category A quota premium - meaning that dealers are not willing to compromise their profits to bid more.

Now that the bidding cycle is back to two weeks, I predict that the quota premium should be supported at the current level with slight weakness in category A.

Prediction on December 21:
Category A: $17,000-18,000
Category B: $19,000-20,000

Verdict on December 23:
Category A: $18,150
Category B: $17,889

COE Prediction - December 2009 1st Bidding Exercise

2009-11-24T13:55:00.005+08:00

The oversubscribed rate for the November 2nd bidding exercise was 10%(previously 14%) for Category A, 18%(previously 12%) for Category B and 48%(previously 61%) for Category E (Open) COEs. With the exception of Category B, the others see the continued down-trending in number of bids.

With the extra week before the next bidding exercise, I predict that the quota premium will be supported at the current level despite the recent weakness in demand.

Prediction on November 24:
Category A: $17,000-18,000
Category B: $18,000-19,000

Verdict on December 9:
Category A: $18,502
Category B: $19,003

COE Prediction - November 2009 2nd Bidding Exercise

2009-11-10T14:46:00.004+08:00

The oversubscribed rate for the November 1st bidding exercise was 14%(previously 34%) for Category A, 12%(previously 21%) for Category B and 61%(previously 85%) for Category E (Open) COEs. You can see the significant reduction in number of bids. The dealers have mostly adjusted their pricing downwards. One dealer has even lowered the selling price close to its cost.

I predict that the quota premium across all the Categories will inch upwards in the next bidding exercise as bargain hunters respond to the "sale".

Prediction on November 10:
Category A: $17,000-18,000
Category B: $19,000-20,000

Verdict on November 18:
Category A: $17,189
Category B: $18,002

What is Brewing in the Transport GPC?

2009-10-29T15:09:00.008+08:00

Our local paper The Straits Times reported on Tuesday October 27 that "More Cars, so public transport trips down". The interesting news is that the public transport's share of total number of trips made during the morning peak period is moving away from the 2020 target of 70%. It was 67% in 1997, 63% in 2004 and 59% in 2008.

Quoting from the article:

Dr Lim Wee Kiak, head of the Government Parlimentary Committee for Transport, believes transport planners should have been more aggressive in reducing the supply of certificates of entitlement (COEs) when premiums started falling three years ago.

He said: "They have an inflexible system. They tend to stick to the growth rate once they have announced it. I think they should be a bit like how the Ministry of National Development releases land - according to demand and the economy."

It is uncommon to hear a Member of Parliament bluntly criticized the Land Transport Authority. However, I do not agree to his viewpoint to have the supply of COEs controlled like land sales by the Singapore Land Authority (SLA).

SLA can release more reserve sites or move reserve sites to confirm sites when cooling measures need to be taken to prevent a real estate bubble. Conversely, SLA can also suspend land sales during an economic crisis as the developers are unlikely to bid above the reserve price (near the Estimated Market Value). Confirmed sites may also not be sold if the highest bid is below the reserve price.

Is Dr Lim suggesting that the supply of COEs be managed in the similar structure as land sales? In that case, LTA could make regular adjustments to the supply of COEs based on current variables relevant to meeting its objectives. Local motorists will be keen to know what are the objectives in such a structure. I am trying to picture different scenarios:

1. Booming economy - LTA releases more COEs for bidding and reaps record revenue for the government since demand is up and bidding is competitive. Prevailing Quota Premium is also high and discourages COE renewal for old vehicles. Lower income residents have no choice but to use public transportation and low performing businesses go bust due to the higher operating (goods delivery) cost for transportation.

2. Economic crisis - LTA sets a reserve price according to the estimated market value and thus, fewer COEs are awarded. Prevailing Quota Premium is supported by the reserve price and is still effective in discouraging COE renewal for old vehicles. Lower income residents have no choice but to use public transportation and low performing businesses go bust due to the higher operating (goods delivery) cost for transportation.

Why are the outcome in both scenarios similar? If getting to 70% by 2020 is the single goal, increasing the ownership cost and operating cost of private transport will surely drive up the usage of public transport.

It is extremely complex to meet the needs of businesses, public transport users, private transport owners and other players in the transport industry. I think hard about this problem and also do not have a simple solution that can please everyone.

I would suggest two areas of improvement to be considered:

1. Usage distribution - work with other parts of the Government to drive the spreading of demand on our transportation system e.g. tax incentives for companies to supply shuttle service from their offices to the MRT stations, flexible working hours, subsidy for onsite childcare, etc.

2. Connectivity redesign - overhaul the design of bus routes around the island, frequent reviews and adaptive changes. LTA manages the routes while the operators bid and passengers vote on the service level.

I am personally happy using public transportation during off-peak hours. But I have heard enough horror stories of the daily rush hours ..... And to members of the transport GPC, I am very willing to give up my car when we have a world-class public transportation system!

COE Prediction - November 2009 1st Bidding Exercise

2009-10-26T14:41:00.005+08:00

The oversubscribed rate for the October 2nd bidding exercise was 34% for Category A, 21% for Category B and 85% for Category E (Open) COEs. I think that the quota premium for Category B will breach the $20K mark in the next bidding exercise. Category A quota premium should raise modestly too.

Prediction on October 26:
Category A: $19,000-20,000
Category B: $20,000-21,000

Verdict on November 4:
Category A: $16,747
Category B: $18,389

COE Prediction - October 2009 2nd Bidding Exercise

2009-10-12T11:16:00.005+08:00

The oversubscribed rate for the October 1st bidding exercise was 30% for Category A, 23% for Category B and 82% for Category E (Open) COEs. I was surprised that the demand was not strong and Category B quota premium fell. COE prices are expected to rise during year-end festive season as reported by Channel News Asia.

I do not think that the quota premium for Category A will breach the $20K mark in the next bidding exercise. Category A quota premium should raise with dealers throwing goodies to drum up demand. Dealers will also bid more aggressively for Category B COEs rather than to rely on the more costly Category E COEs.

Prediction on October 12:
Category A: $18,000-19,000
Category B: $20,000-21,000

Verdict on October 21:
Category A: $18,899
Category B: $19,510

Lucky Bid Price

2009-10-08T11:11:00.009+08:00

One interesting observation on the first bidding exercise in October is the number of unused COEs as shown below:

The proportion of unused COEs for Category A and B are 6.9% (79/1151) and 2.8% (19/685) respectively. I wonder what drives the high number of unused Category A COEs. Any idea?

The winning bid price for this exercise is $16,201. Since LTA will not award more than the stated quota of 1,151 Category A COEs in the announcement, there must be more than 79 bids of $16,200. These following past results support the hypothesis that bid prices ending with the digit '0' or '8' are very popular:

Jul 2nd bid - 25 unused Category B COEs for quota premium $18,501
Jun 1st bid - 20 unused Category B COEs for quota premium $11,889
May 2nd bid - 19 unused Category A COEs for quota premium $9,889
Apr 1st bid - 54 unused Category B COEs for quota premium $7,501
Jan 1st bid - 55 unused Category A COEs for quota premium $5,001

And here's the 2009 summary count of each final lowest winning bid's digit. You should note that digits 0, 1 and 9 have the most occurrences while digits 4 and 7 have never won. I also find it surprising that digit 8 only appears once.

Do you want to lose out on the winning bid price by just ONE dollar? Surely not, so do remember to end your bid price with the digit '1' or '9'!

Disclaimer: This formula may not get you the winning bid. You may remember that Category A quota premium in Nov 2008 2nd Bidding is $2.

Related post: Bid for your Own COE

COE Prediction - October 2009 1st Bidding Exercise

2009-09-30T09:45:00.004+08:00

The oversubscribed rate for the September 2nd bidding exercise was 11% for Category A, 21% for Category B and 76% for Category E (Open) COEs. The demand for small cars was weak but with the LTA announcement on the mid-year review of COE Quota. Category A, B & E quota will be reduced by 17.8%, 9.8% & 18.8% respectively.

What is the impact of the reduction in quota? I am of the opinion that the supply squeeze will support the uptrend running up to the Chinese New Year. I predict that the quota premium for Category B and E will breach the $20K mark in the next bidding exercise. Category A quota premium should rebound to the previous level since most dealers are keeping the same price level with the anticipated uptrend.

Prediction on September 30:
Category A: $18,000-19,000
Category B: $20,000-21,000

Verdict on October 7:
Category A: $16,201
Category B: $18,109

Stopping in Time

2009-09-20T16:11:00.005+08:00

I can feel the chill down my spine when I saw the burned wreckage over last Friday's news about this serious accident on the Malaysia's North-South Highway. It is extremely dangerous to be following too closely when travelling fast on the highway. Based on the chart above, you should always keep a safe distance and scan ahead for road hazard. Note that there is also the thinking time needed before your foot reacts by stepping hard on the brake pedal.

While it is also important to maintain two essential components of your ride - the tyres and the brakes, the most crucial part of the ride is the DRIVER. You control the ride so your ability to stay alive depends largely on yourself.

COE Prediction - September 2009 2nd Bidding Exercise

2009-09-14T13:32:00.008+08:00

The oversubscribed rate for the September 1st bidding exercise was 33% for Category A, 31% for Category B and 70% for Category E (Open) COEs. We see increases across all the categories due to the extended elapse time of three weeks. Some dealers have upped the selling price of their cars by up to $3,000.

With the normal two-week elapse time, I do not think the uptrend can be supported. I predict that the quota premium will retreat and test the $20K mark in Q4 only if LTA confirms a reduction of COEs in its review.

Prediction on September 14:
Category A: $16,000-17,000
Category B: $18,000-19,000

Verdict on September 24:
Category A: $15,589
Category B: $19,801

Personalised Plate for Your Ride?

2009-09-09T13:40:00.005+08:00

Still No 'YEA' - LTA responded to the Straits Times that the change to allow fancy plates were still being considered but without any target date. Thus, motorists keen to have their personalised number plates will have to continue to wait in vain.

What will be my pick with the current system? It is coming in the next series SKX 8 Y. My most ideal personalised plate is SKX 1 Y (my blogging moniker) but the computed suffix is R, not Y. You can check the computed suffix with this tool Vehicle Registration Suffix.

Related post: The Number Games

ICE Job

2009-09-02T16:04:00.019+08:00

Since I got my ride in January this year, I have been contemplating a simple ICE (In Car Entertainment) job i.e. the replacement of the head unit (HU). The custom-built one looks nice but it is lacking in a few areas:

1. No AUX input - it is a single-disc player and I think it is safer to listen to a long playlist on a MP3 player than to change CDs while on a long drive.

2. CD format - the CD player does not support MP3, Windows Media or Apple's AAC formats.

3. Poor radio reception - the quality of broadcast received from FM stations is quite bad.

I gave myself a few months to see if I can endure these shortcomings. I made a firm decision that I could not early last month when the thought of the long ride to Genting Highlands during the September school holiday fills my mind.

As I have a limited budget, I drop the desire for a DVD receiver, lower my expectation of sound quality and place esthetic on a higher priority. As the stock HU is of 2-din dimension, I enquired on how a 1-din HU will look in its place. A box can be added below or above the 1-din HU installation but I do not like the odd setup. Thus, I limit my search to only 2-din CD receiver HU. These are the brands that I considered: Kenwood, Pioneer and Sony. I wrote off Kenwood as I do not like having a USB drive sticking into the front USB port.

The Pioneer 2-din CD receiver HU is a popular choice among owners of my car make. However, I find that the blue OLED lighting does not match the dashboard well. The Sony HU is a better match once I discovered that the key illumination can be switched to amber. Although the sound quality of the Pioneer HU is known to be better, I decided on the Sony HU model WX-GT78UI since the price is lower, its features meet most of my criteria and I can use the savings on the speaker upgrade. I settled on the Hertz Energy series ESK165 and ECX165. The installation of the HU and speakers took about two hours. I was not aware of the complexity until the technician started to take apart the dashboard and the doors' panel.

After a week's use, here is the assessment of my first ICE job:

Sound quality is significantly enhanced but I do not know how much to attribute the improvement to the speakers versus the HU. Placing the tweeters outside of the front columns (where the stock tweeters are located), on top of the dashboard helps deliver the higher frequencies very clearly. I will definitely replace stock ICE in my future rides.

The HU matches nicely to the matt black dashboard - the main front panel is glossy black and the twelve keys around the big circular LED display are in matt black. The amber key illumination also matches well with the air-con control and other dashboard readings, especially in the dark. The LED displays the track name and album title in English but does not support Chinese or Japanese characters (an underscore character "_" appears in place of each unsupported character).

The USB port is at the rear and the unit is bundled with a cable that can be installed at a convenient location; I asked to place the USB adapter in the glove compartment as shown. Thus, my USB drive can be connected and neatly stored. Sound quality from the playback of USB media is good. The HU can also support several models of iPod with the bundled USB adapter (no need for special iPod adapter) but both models that I have, the iPod Mini and iPod Shuffle, are not supported ... sigh.

I also cut a CD with songs in all three formats (MP3, WMA, AAC) and the HU could recognize the CD with Digital Media. The HU has a special feature DM+ which enhances the sound quality of Digital Media.

Radio reception is clear and now I enjoy the radio broadcast much better than the stock unit. It has three sets of 6 FM preset frequencies and two sets for AM frequencies. The preset frequency keys are on the right hand side of the big circular LED display.

The front AUX port enable audio input from my portable DVD player and MP3 players. However, I find that the sound quality is not that great using the AUX port.

In conclusion, I am very satisfied with this ICE upgrade. The ICE research done over the internet and chat with the technician have already given me ideas for future upgrades - amplifier, subwoofers, processor, CD changer, DVD, GPS, etc. I attached the cool night display to end this post.

Is Red Plate More Attractive Now?

2009-08-31T11:14:00.005+08:00

LTA has just announced over the weekend "Enhancements To The Off-Peak Car (OPC) Scheme". Analysis in the local papers revealed the net incentive value of less than $1,000 for the extra periods (Saturday mornings and 5 Public Holiday Eves) of time OPC vehicles are allowed on the roads. One key enhancement is the ability to purchase e-Day License within 24 hours the next day after using the vehicle - this is key for emergency use without the risk of not having a paper ticket or tearing off the wrong date (anxiety from the emergency). The other one is the rebate returned every 6 month for conversion rather than when the OPC vehicle is scrapped.

There are three areas that the enhancements did not addressed:

1. The $100 administration fees eat into the savings for motorists. I believe that LTA is highly computerized so the cost of the transaction should be rather low. Why discourage such transactions?

2. The red plates are not going away ... the fees to put up one with the seal also cost money.

3. No e-1/2 Day License. If I need to use the car for only half a day, I will still have to pay for a full day license.

In conclusion, I think the enhancements may attract new OPC buyers rather than existing motorists. I look forward to hearing more enhancements from LTA in 2010.

Porsche Carrera versus Boeing 747

2009-08-28T10:26:00.005+08:00

An interesting race between two different type of transport will take place on September 5 as reported at AsiaOne Motoring and other local media. I want to watch the race in person but I will be out of town on that day. It was a difficult decision to turn down the invitation from nuffnang last week. In my opinion, Boeing 747 is at an disadvantage since its best performance is in the air. My bet is on the Porsche Carrera GT3 beating the big jumbo.

Update September 9: Race result - The Porsche 911 GT3 Carrera Cup race car covered the 1.7km distance in 19.8 seconds, beating the Boeing 747 by 0.4 seconds. Reports - The Straits Times, The New Paper.

Cheaper to Bid?

2009-08-26T14:04:00.004+08:00

LTA has decided to temporarily lower the deposit required for bidding category A, B, C and E COEs from $10,000 to $5,000 from this October to September next year. The only exception is that the deposit for category D COEs for motorcycles remains at $200. The full news article is available at ST701.

While the change is welcomed by motor distributors and dealers, there is little impact to motorists since most do not bid for their own COEs. You can hardly find any dealer that offer package ex-COE. The competition among dealers may drive up COE quota premium since they need to secure the COE so as to execute the sales orders. Our local consumer watchdog should push for a more transparent sales process and pricing that allows savvy buyers to bid for their COEs.

Related posts: Bid for your own COE, Accredited Dealers

Texting Can Be Deadly

2009-08-26T09:34:00.002+08:00

Watch this Public Service Announcement from UK Police to understand the possible consequence of texting while driving. It will stick in your mind and deter you from texting while driving.

Related post: SMS = Send Messages Safely?

COE Prediction - September 2009 1st Bidding Exercise

2009-08-24T11:16:00.004+08:00

The oversubscribed rate for the August 2nd bidding exercise was 13% for both Category A and Category B COEs, and 65% for Category E (Open) COEs. The lower number of bids in Category B COEs reflected the weakness in demand. Although the elapse time of three weeks to the next bidding exercise will provide the extra duration to lock down sales, the market traditionally sees lower demand during the Lunar Seventh Month (aka Hungry Ghost Festival). I predict that both Category A & B COE quota premium will be adequately supported to see a mild increase.

Prediction on August 24:
Category A: $16,000-17,000
Category B: $18,000-19,000

Verdict on September 9:
Category A: $18,020
Category B: $19,289

World's Biggest CNG Pump

2009-08-13T11:00:00.005+08:00

Green motorists who have converted or bought CNG powered rides will have a new venue to top up their tanks. I am also pleasantly surprised to read that it will be the biggest in the world when it opens at Old Toh Tuck Road on September 9 - what an auspicious date 09-09-09!

Read the published news article here.

COE Prediction - August 2009 2nd Bidding Exercise

2009-08-11T10:10:00.005+08:00

It was a surprise to see the drop in the quota premium for Category A COEs. The oversubscribed rate for the August 1st bidding exercise was about 12% for Category A COEs, 24% for Category B COEs and 66% for Category E (Open) COEs. All categories see lower number of bids and small car prices are adjusted downwards to drum up demand.

I predict that the Category A COE quota premium will rebound while the Category B COE quota premium will continue to inch up to the $20K mark.

Prediction on August 11:
Category A: $15,000-16,000
Category B: $19,000-20,000

Verdict on August 19:
Category A: $15,019
Category B: $16,290

你看什么？lekuasimi

2009-08-10T12:16:00.004+08:00

I like this spoof on the NDP 2009 theme song "What Do You See?" with Ah Beng's view on motoring in Singapore. Enjoy it!

Punish Motor Claim Fraudsters

2009-08-03T22:19:00.006+08:00

Police is investigating a workshop for fraudalent motor insurance claims. This is excellent news for motorists who are penalized by increased motor insurance premium.

I admire the courage of the motorist who sue the other party that had inflated the claim and use a false witness. It is also high time for the Police to probe and charge those guilty of fraud. The judge hearing the case should dish out the appropriate punishment to deter other fraudsters from similar cases. I think the guilty party should also foot all the legal fees so that will encourage insurance companies to file legal suits in support their clients who are clearly victimized.

Most workshops and accident victims will "inflat" (maximize) their damage claim so insurance companies should negotiate for a fair settlement. Substantial medical claim for whiplash injury should be subjected to close scrutiny. If the victim receive compensation and found participating in a marathon just shortly after suffering the injury. Is he a fraudster?

Do you support putting those buggers behind bars? Unscrupulous parties falsifying evidence, witness or injury claims must be stopped otherwise they will become greedier, stage accidents and cause harm to unsuspecting motorists.

SMS = Send Messages Safely?

2009-07-31T11:04:00.004+08:00

New York Times has recently published the result of a study that "Texting Lifts Crash Risk by Large Margin" - the collision risk was 23 times greater than when not texting.

In Singapore, Section 65B of the Road Traffic Act covers texting while driving - as long as there is evidence to show that the motorist was holding onto the handphone with one hand, while using it to communicate. This is regardless of the position in which he was holding onto the handphone and the fact that a hands-free kit was also used is irrelevant. The various scenarios are clearly described:

Scenario B (SMS/MMS message)
Writing, Sending, and Reading SMS/MMS messages from someone, with or without earpiece, using one hand to hold on to the mobile phone and the other hand holding the steering wheel.

If you receive a text message while you are driving, do resist the urge to reply immediately especially when your vehicle is still in motion. Remember that the sender will call if it is an urgent matter. Drive safely.

COE Prediction - August 2009 1st Bidding Exercise

2009-07-29T13:43:00.004+08:00

The COE supply squeeze (see my last post) is expected reduce quota by 10-15%; it may be up to 20% in the worst case. Thus, COE quota premium is expected to breach the S$20K mark very soon, especially for Category B.

I believe that LTA will also announce some tweaks to the algorithm for deriving the number of COEs for future years since the economy slowdown has created the vicious cycle of low scrap rate with high COE quota premium, resulting in ever-lowering quota if the current system remains unchanged.

The oversubscribed rate for the July 2nd bidding exercise was about 14% for Category A COEs, 35% for Category B COEs and 90% for Category E (Open) COEs. Although the demand for smaller cars is tapering, my prediction is that the quota premiums for all categories will raise in tandem with the news article in the local papers.

Prediction on July 29:
Category A: $17,000-18,000
Category B: $20,000-21,000

Verdict on August 5:
Category A: $13,658
Category B: $18,890

COE Supply Squeeze

2009-07-28T09:22:00.003+08:00

A forecast on mid-year review of the COE supply was reported on the Straits Times today and it is bad news for dealers and motorists. The supply of COEs is expected to be squeezed by 10-15% with fewer vehicles being de-registered ahead of their COE expiry. Many motorists and businesses are stretching the usage of their current vehicles in this recession. The current cycle has already seen a reduction over the previous cycle but the dismay forecast will surely prop up the successful bid in the upcoming exercises. COE quota premium is expected to breach the S$20K mark very soon.

LTA had reached out to the motoring industry and will tweak the COE system to better meet the needs of the various stakeholders. I think that is a very challenge task since the objectives of the various stakeholders (buyers, trade associations for motorcars, motorcycles, goods vehicles, industrial vehicles, etc.) vary widely.

The rising cost of the COEs will be passed back to buyers and first-time buyers will feel the pinch as the lower cost makes may see the COE component of the car cost exceeds the car itself. The used car market will see some growth and I encourage motorists selling their cars to scout for better offers from dealers or direct buyers since the value of the used cars is also supported by the high COE quota premium.

Innovative Signs of the Times

2009-07-13T17:13:00.004+08:00

LTA has just announced the Extension of New Road Safety Measures to More Locations. I have not personally driven over the triangles at the pilot sites so I will probably slow down wondering if the vertex will cause my car to rumble or slip. I used to ride a two-wheeler so painted areas on rainy days pose risk when cornering. Are the triangles painted with non-slip paint? I certainly hope so. Was a contest held to name this new sign? I must say that it has a creative name of Traffic Calming Marking (TrCM) ... and I want to suggest planting aromatic herbs along those stretches to complete the calming and therapeutic effect.

The second new safety sign is the cool Your Speed Sign (YSS). It is an electronic sign that displays the speed of a passing vehicle so that you will be more aware of your speed and consequently encourages you to keep to the limit. Gee, I think this new gadget is great as a calibrator. I would compare my speedometer reading to that of the YSS so it may become a distracter.

What do you think? Innovative Signs of the Times?

COE Prediction - July 2009 2nd Bidding Exercise

2009-07-09T11:31:00.006+08:00

Although COE quota premiums posted strong increases across the categories for cars to end at their highest levels in over 12 months, the oversubscribed rate for the July 1st bidding exercise lowered from 24% to 18% for Category A COEs and from 41% to 35% for Category B COEs respectively when compared to the previous bidding exercise. The reduction in bids is a surprise since the time elapse from the last bidding exercise to the first one in July is THREE weeks.

It seems that resistance from the rising car prices is kicking in. The traffic at car showrooms should be dampen over the next two weeks. The one event that may sustain the demand is the CATS Classified Car-nival to be held on Sunday July 12 at the Singapore Expo.

My prediction is that the quota premiums for the next bid should remain flat or raise slightly. The only blip expected for Category B is when Ferrari's new distributor acts on the 120+ orders for the new model California convertible that were refunded from Hong Seh Motors, the previous distributor.

Prediction on July 9:
Category A: $14,000-15,000
Category B: $16,000-17,000

Verdict on July 22:
Category A: $15,291
Category B: $18,501

COE Prediction - July 2009 1st Bidding Exercise

2009-06-30T13:46:00.006+08:00

The oversubscribed rate for the June 2nd bidding exercise was 24% for Category A COEs and 41% for Category B COEs respectively. I also observed a spike in the over-subscription of Category E Open COEs to 115% from the usual of 75-100%. The time elapse from the last bidding exercise to the first one in July is THREE weeks so dealers have an additional week to collect the sales order. Judging from past trend, the quota premium is likely to continue its climb and the easy profit from the stock market may fuel even more demand.

Now that H1N1 is beyond the containment strategy, anxious parents and loved ones are ferrying their school-going kids to minimize the risk of infection of riding on public transportation especially during peak hours. Anyone seen coughing badly in a crowded MRT train will certainly raise many eyebrows. So will you pay for the safety of your own cabin space?

Prediction on June 30:
Category A: $14,000-15,000
Category B: $15,000-16,000

Verdict on July 8:
Category A: $14,310
Category B: $16,801

COE Prediction - June 2009 2nd Bidding Exercise

2009-06-08T13:55:00.004+08:00

Sorry, folks! I am on an overseas holiday and do not have the time to do a deeper analysis. Here're my gut feel of the raising trend ...

Prediction on June 8:
Category A: $12,000-13,000
Category B: $11,000-12,000

Verdict on June 17:
Category A: $12,899
Category B: $14,840

No Guilty Party in Accidents

2009-06-03T10:32:00.006+08:00

Strait Times: "No-fault motor claims" hits the headline news this morning. Motorists have recently been agonizing over fast raising motor insurance premium and inflated claims. A radical proposal to do away with third-party claims and have a "no-fault regime". The system is used in New Zealand, Canada and United States.

So what is a no-fault system? Motorists make claims against their own insurer in an accident irregardless who is at fault. The system eliminates disputes and theoretically reduces claims amount and insurance premiums in the long run.

The problem with third-party claims is that accident parties will always be encouraged to paint the story along this line "the other party is at fault!" so as to minimize any claim payout from his own motor insurance policy, avoid loss of no-claim discount and increased premium. There are vested interests for the workshop, doctor, lawyers, etc. to provide services and make profits, whether ethically or in-ethically. It is also difficult, expensive and time-consuming to prove who was at fault in court. Thus, I can understand why some insurers will just go ahead to pay any claim. They will just need to raise the insurance premium to recover the costs.

I strongly support the no-fault system since inflating claims will only impact the motorists' own insurance policy. Other major accident cases should then rightfully be addressed in court to find the party at fault.

COE Prediction - June 2009 1st Bidding Exercise

2009-05-26T18:51:00.005+08:00

The oversubscribed rate for the May 2nd bidding exercise was similar to the previous exercise at about 45% for Category A COEs and increased from 25% to 35% for Category B COEs. Now that there are more news on green shoots signaling that the downturn has bottomed out, the sentiment seems to more optimistic than at the start of the year.

Dealers are now passing the burden of higher COE quota premium back to the buyers by increasing the price. Those with unfulfilled orders are likely to bid aggressively to close the deals since the quota is fixed by LTA while the dealers are fighting to win a bigger slice of the pie - earning less profit is better than having no sale completion.

Prediction on May 27:
Category A: $11,000-12,000
Category B: $10,000-11,000

Verdict on June 3:
Category A: $11,690
Category B: $11,889

SG Carpark Wiki

2009-05-20T11:30:00.004+08:00

Wiki is such a great tool to allow the public to make update to content and thus, I have created the SG Carpark wiki for my fellow motorists. There are a few good sources of information on carpark rates but all of them do not allow for the public to update the information immediately when any change is identified.

Here is the URL to the Wiki http://sgcarpark.wikispaces.com/. Please contribute your regular destinations to make the wiki comprehensive and useful to all. Thanks.

COE Prediction - May 2009 2nd Bidding Exercise

2009-05-15T15:11:00.003+08:00

The oversubscribed rate for the May 1st bidding exercise was about 45% for Category A COEs and 25% for Category B COEs. It seems that the smaller car COEs demand is well-sustained and is likely to be further supported with the improving economic outlook. I have also revised upwards my prediction for Category B COEs as keen buyers are likely to move in ahead of the others.

Prediction on May 15:
Category A: $8,000-9,000
Category B: $8,000-9,000

Verdict on May 20:
Category A: $9,889
Category B: $9,180

Don't Get Busted for Blocking Buses!

2009-05-03T15:02:00.002+08:00

LTA has just announced the Mandatory Give Way to Buses scheme to be fully implemented over the next two years after a successful pilot. The new signs will be marked on 180 bus bays starting June 2009.

So what is the penalty for not giving way to buses exiting bus bays at bus stops with the new traffic signs and markings drawn? The penalty for the new offence is a fine of $130 but no demerit point will be given.

COE Prediction - May 2009 1st Bidding Exercise

2009-04-28T10:03:00.003+08:00

The oversubscribed rate for the April 2nd bidding exercise was between 32% to 38%, lower than the previous 45%. The local paper has also interviewed an industry expert who commented that the COE quota premium will be supported in the next few rounds from accumulated orders over the last few weeks before the 2009/2010 quota reduction. You may have also read in the local forums about the long waiting time for some popular makes as the authorized distributors do not have stock on hand. In those cases, the ADs may opt to delay the bidding since some sales agreements allow for up to six non-guaranteed bids.

I reckon that the COE quota premium will stay in the $6K to $8K band.

Prediction on April 28:
Category A: $7,000-8,000
Category B: $7,000-8,000

Verdict on May 6:
Category A: $8,489
Category B: $7,552

Accredited Dealers

2009-04-27T13:31:00.004+08:00

http://www.channelnewsasia.com/stories/singaporelocalnews/view/425142/1/.html:
49 used car traders and parallel importers are pioneer members of CaseTrust-SVTA, a new accreditation scheme set up by the Consumers Association of Singapore (CASE) and the Singapore Vehicle Traders Association (SVTA). I felt that this is a healthy move to "regulate" the parallel importers since they have to adhere to the dispute resolution process to protect consumers.

Car is a big ticket item and I would be very cautious about buying from the Parallel Importers since they do not have any contractual obligation with the manufacturers and can switch to buying from an alternate source when relationship goes sour. I am also quite shocked to read many threads in the local forums about the complication of the deals resulting from the freak result of the $2 Category A COE quota premium last November. Many buyers apparently did not even get proper sales documentation from the dealers.

Some dealers started small and grow into a reputable size over time, it is indeed difficult for a new firm to fork out additional capital to join the scheme at its inception. However, I think it is going to be a mandatory operating cost to establish trustworthiness to the consumers. Will the scheme assure the elimination of conflict? No, but the consumers is guaranteed protection when buying from accredited dealers.

I had bought my current ride from the authorized distributor. Will I consider buying my next ride from an accredited PI? Very likely once the scheme is able to demonstrate its effectiveness and I am able to save a bundle. I hope the authorized distributors will modify their pricing strategy since the consumers will then have another "safe" option.

COE Prediction - April 2009 2nd Bidding Exercise

2009-04-13T10:33:00.004+08:00

The April 1st Bidding Exercise outcome was within my expectation. I do have two interesting observations:

1. 54 Category B COEs were not awarded due to the high volume of unsuccessful $7,500 bids. The dealers could not increase their bids in time before the bidding exercise closed at 4pm. The dealers will probably put in a higher bids in the next exercise since their customers must be frustrated to have their new car delivery delayed for another fortnight.

2. Both categories were over subscribed by 45%. I felt that the demand is still weak considering the three weeks' elapse time before the bidding exercise. An estimated 5-10% of the bids are low opportunistic ones so the number of genuine buyers is low in my opinion.

I noticed that most authorized dealers' car advertisements over the long weekend do not have prices shown. I think many of them are split as to where the COE quota premium is heading. My guess ... flat or slight softening in the next bidding exercise.

Prediction on April 13:
Category A: $6,000-7,000
Category B: $6,000-7,000

Verdict on April 22:
Category A: $7,589
Category B: $7,490

COE Prediction - April 2009 1st Bidding Exercise

2009-03-27T11:11:00.004+08:00

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

2009-03-26T13:44:00.004+08:00

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

2009-03-11T13:31:00.005+08:00

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

Can I Afford a Car?

2009-02-28T00:10:00.008+08:00

This is a frequently asked question on many local motoring forums. I am surprised if any of the topic starter actually rely fully on the responses to make the buying decision. There are many tools to compute depreciation, paper distribution, motor loan repayment schedule, etc. but I could not find a good tool to analyze the Total Cost of Ownership including ongoing operating costs. Thus, I had embarked on a mini project back in October 2007 to study the Total Cost of Ownership (see the site on Wordpress) for motoring in Singapore. However, I did not get many responses and therefore, the idea was sitting on the backburner for quite some time.

Earlier this week, I got inspired and managed to put the tool together in a few hours. These are the components that I take into consideration:

1. Loan Instalment

2. Road Tax and Radio License - road tax can be computed from the formula at www.onemotoring.com.sg and radio license is $27 per annum as given at www.mda.gov.sg. Adhoc rebates from the government is not reflected.

3. Motor Insurance - annual insurance premium with No Claim Discount of up to 50% can be computed. The estimation is assuming that the annual premium stay constant and no accident occur so the NCD will increment each year up to 50%.

4. Fuel Cost - monthly cost is computed from the average mileage x fuel price x fuel consumption of the vehicle. You can estimate the monthly mileage from the regular destinations (eg. home to office to home on working days) and some buffer for weekend and adhoc trips.

5. Servicing - maintenance of the motor vehicle is necessary every 10,000km so estimated servicing cost is added every 10,000km driven. However, one standard cost is used for the estimation as different costs per 10K, 20K, 30K, etc. servicing cannot be easily captured.

6. Parking - monthly season parking charges, average coupon costs and adhoc parking costs can be estimated.

7. Electronic Road Pricing - monthly ERP charges can be estimated (www.onemotoring.com.sg) with some buffer.

8. Cleaning and Grooming - package cost or allowance for car washes can be estimated.

9. Inspections - required for vehicles at age 3, 5, 7 and 9 years. Inspection cost is taken from VICOM (www.vicom.com.sg).

10. Others - tyre change, in-car entertainment system upgrade and adding other accessories.

The tool can help the new motorist understand the Total Cost of Ownership and the schedule of cash flow needed to fund the operation of a motor vehicle. The tool is also useful to the seasoned motorist as a log to record the actual cost incurred for each component. Do note that once an actual cost is entered, it will overwrite the formula in the cell and you will need to download the tool and start from scratch again if you need to revert to the original numbers. Please feel free to provide me with your feedback of the tool.

Ready to test drive the tool? Click here to proceed.

Total Cost of Ownership

2009-02-27T23:10:00.007+08:00

Current Version: 1.0 dated February 27, 2009

This worksheet helps you to estimate the Total Cost of Ownership for your motor vehicle over its lifespan. You should read the following post for more information:

Can I afford a car? posted on February 28

Click here to download the tool (MS Excel format, 115 KB).

COE Prediction - March 2009 1st Bidding Exercise

2009-02-24T13:59:00.010+08:00

I was surprised by the early LTA announcement about the cut in COE quota for 2009/2010 on February 12. But then again, this year's Budget was also delivered early with the Resilience Plan to tackle the current economic crisis. The timing of the announcement has indeed caused a rebound in the COE quota premium.

The most important impact of the rebound is to prop up the Prevailing Quota Premium (PQP) to discourage vehicles near their COE expiry from renewing the COE. Now the March PQP is $4,516 (Cat A) and $3,004 (Cat B). If the February 2nd bidding exercise had concluded in a similar 1st bidding exercise result (Cat A - $1,020, Cat B - $689), March PQP would have been $3,943 (Cat A) and $2,304 (Cat B). I believe that the March COE quota premium will average at $5,000. Thus, April PQP is estimated at $3,850 (Cat A) and $3,150 (Cat B). Advice for those considering COE renewal should do so immediately using the March PQP $3,004 for Category B vehicles and wait a month till the April PQP $3,850 (estimated) for Category A vehicles.

Prediction on February 24:
Category A: $4,000-5,000
Category B: $5,000-6,000

Verdict on March 4:
Category A: $4,890
Category B: $5,101

COE Prediction - February 2009 2nd Bidding Exercise

2009-02-10T13:00:00.008+08:00

The COE Quota Premium is likely to see a technical rebound. Although the economic outlook seems grim, potential buyers are likely to nibble at the attractive offers of FREE COE. If you really need to change your ride, it is a good opportunity now.

Let's talk about the "need" to change ride - motorists are still trading in cars aged five years or even less. Wise decision? No. Deep pockets? I hope so. Many of the cars are still in good condition and can be more fully utilized but the foolish owners succumb to the temptation of a new ride. Renewing COE for vehicles near age of 10 at the Prevailing Quota Premium (PQP) is very attractive for cash-strapped motorists whose vehicles are in good condition and road worthiness. It costs about $2,700 and $2,200, in addition to the scrap value and higher road tax, to extend the use of Category A and B vehicles for 5 more years. The PQP will come down even more after the upcoming bidding exercise.

One good option now is to buy (at near scrap value) a used 8-10 year old Continental make in tip top condition and pay the PQP for another 5 or 10 years COE renewal. Do drop me a note (on the comments) if you have executed on the idea.

Prediction on February 10:
Category A: $2,000-3,000
Category B: $1,000-2,000

LTA has announced the cut in COE quota for 2009/2010 on February 12. The reduction is about 24% from the previous year's quota but Category B is reduced by 30%. Quota premium is expected to rebound strongly with dealers pressuring buyers to commit.

Revised prediction on February 13:
Category A: $3,000-4,000
Category B: $4,000-5,000

Verdict on February 18:
Category A: $4,460
Category B: $4,889

Bid for your own COE

2009-02-04T14:38:00.009+08:00

The bidding exercises are conducted from Monday noon to Wednesday 4pm on the first and third Mondays each month. Bids can be submitted through the DBS/POSB ATMs, Citibank Internet Banking facility or via OCBC and Citibank phone banking services. Remember that you need to have $10,000 in your banking account for the deposit and will also incur a banking service charge.

During the bidding exercise, you can check on the status of the bids and revise the reserve price using these banks' services, the LTA Open Bidding website (http://ocoe.lta.gov.sg/), or by calling the LTA Open Bidding Phone System at telephone number: 6362 1465.

The rest of us can watch the bidding on the One.motoring website (http://www.onemotoring.com.sg) or on Teletext (pages 521-523).

Why bid for your own COE? You are in total control over how much to pay and do not get yourself into conflict over COE rebate with the dealer. However, you should visit the showrooms of those makes that you are interested in buying so as to know the selling price, COE rebate, etc. Upon a successful bid, you have up to six months to bargain and negotiate for the best deal with either the Authorized Distributors/Dealers or Parallel Importers on the car of your choice. You should take note of which COE category (A or B) does your preferred make and model belong to bid for the right certificate.

The best recommended option is to use either the Citibank Internet Banking or the Phone Banking since you can revise your reserve bid price from the comfort of your office or home. It is certainly a pain to miss getting the COE by just a small quantum - example is that you are willing to pay $500 and put in your reserve bid price accordingly. At 3:55pm, the quota premium is bidded up to $510 and with little time left, the winning bid will not be much higher. Thus, you can raise your bid to $600 and secure your COE in the current bidding exercise rather to wait till the next exercise.

Good luck and may you win your bid!

Related posts: Cheaper to Bid?, Lucky Bid Price

COE Prediction - February 2009 1st Bidding Exercise

2009-01-28T21:11:00.004+08:00

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

COE Prediction - January 2009 2nd Bidding Exercise

2009-01-14T13:03:00.003+08:00

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

COE Prediction - January 2009 1st Bidding Exercise

2008-12-29T17:40:00.004+08:00

Dealers have been reluctant to reduce the price of the bigger cars and we have $2,656 Category B COE quota premium in the last bidding exercise of 2008 ... a low not seen since the $50 freak result some years back. The latest round of price cuts will make big cars equally attractive to the small cars. Buyers should be able to pick the right car for their motoring needs at a similar price over features ratio.

Although there is a three weeks' elapse from the last bidding exercise, the demand should be flat as most folks are partying or away on holiday. So has anyone been to the showrooms? One motoring event you can check out this week is the Carrerista Jamboree 2008 but note that entrance ticket is going at $20 per head.

Prediction on December 29:
Category A: $5,000-6,000
Category B: $4,000-5,000

Verdict on January 7:
Category A: $5,001
Category B: $3,089

Fair margin for the Dealers?

2008-12-13T23:09:00.006+08:00

How lucrative is the auto sales business? You can get the cost of new cars registered in the previous month from the LTA website.

The basic cost that dealers must pay includes:
1. OMV - Open Market Value. OMV is assessed by the Singapore Customs, based on the price actually paid or payable for the goods when sold for export to the country of importation. This price includes purchase price, freight, insurance and all other charges incidental to the sale and delivery of the car to Singapore.
2. Custom Duty - 20% OMV
3. GST - Goods & Services Tax 7% (OMV+Custom Duty)
4. ARF - Additional Registration Fees 100% OMV
5. Registration Fees - $140
6. COE cost

Thus, the difference between the selling price and the basic cost of the car is the margin including Selling, General and Administration Expenses (SG&A). Some of the expenses that I presume are the operating cost of the showroom, basic salary and commission for the sales team, marketing/advertising and the regular overheads of a business.

I checked on a few popular makes and models to see how much margin the authorized dealers make. Here are some interesting statistics for the month of November:

Honda Civic 1.8MT
Average OMV=$22,178
Total Basic Cost=$59,096
Selling Price=$74,000
Margin including SG&A=$14,904

Hyundai Avante 1.6A
Average OMV=$11,911
Total Basic Cost=$37,800
Selling Price=$52,999
Margin including SG&A=$15,199

Mazda 3SP
Average OMV=$15,308
Total Basic Cost=$45,558
Selling Price=$61,188
Margin including SG&A=$15,630

Mitsubishi Lancer 1.5 MIVEC GLS
Average OMV=$17,701
Total Basic Cost=$51,024
Selling Price=$58,588
Margin including SG&A=$7,564

Nissan Latio CVT 1.5L
Average OMV=$17,523
Total Basic Cost=$50,618
Selling Price=$59,500
Margin including SG&A=$8,882

Subaru Impreza 5D 2.0R-S AWD
Average OMV=$15,540
Total Basic Cost=$43,934
Selling Price=$61,388
Margin including SG&A=$17,454

Toyota Altis 1.8 Auto
Average OMV=$18,584
Total Basic Cost=$50,887
Selling Price=$63,988
Margin including SG&A=$13,101

I also scan through the list to see what is the lowest margin - it is just $1,867 for the Chery QQ 0.8L. The margin for the premium makes is even greater but then, the SG&A is proportionally higher. The pricing of cars depends on the business strategy of the dealer. If the dealer has a strong after sales servicing business, lower selling price may be used to increase the population of the make to generate higher revenue for its servicing business. Buyer may opt to purchase from Parallel Importers to save some money with a lower pricing but have to bear the risk of complications dealing with a small business. See the tales of the $2 COE for an example.

So do you think the dealers are making a fair margin? One idea is DIY - maybe our non-profit motoring associations may consider helping members to buy direct from manufacturers and bid for the COE.

COE Prediction - December 2008 2nd Bidding Exercise

2008-12-09T11:17:00.006+08:00

The quota premium rebounded in the last bidding exercise as expected. There were more than 1,300 unsuccessful bids and possibly many dealers who did not put in any bid. Why not bid? The dealers priced the cars with an allocation of COE cost and would not waste the administrative cost of bidding if the result is above their allocation. Many of the dealers will ask their customers to top up their COE bids if they want to have their cars registered before the Chinese New Year.

Most of the buyers who locked their orders with the lowest price failed to secure their COE while those buying at a higher price got theirs. Unfair? Well, the dealers have to stay profitable to sustain the business.

Should you top up your bid? It depends on how urgently you need your ride. I think the quota premium will stay flat. Based on LTA published information, there are 96,213 passenger car (categories A, B and E) COEs available for bidding from May 2008 to April 2009. There are 9 more bidding exercises for this annual quota so about 36,000 COEs are still available before the quota is revised for 2009.

If you are thinking of bidding for your own COE, the better opportunities are the 2nd bidding exercise in January 2009 and the subsequent bidding exercises in February 2009 when historical trend shows lower demand post-CNY (Chinese New Year). What is the chance of another $2 COE? That is LOW since many individual bidders are coming in. However, I will not rule out COEs at the affordable level of $2,000-3,000. COE quota for 2009 will be announced in early March 2009 and the expected reduction is going to drive up the quota premium in March and April 2009.

I will publish a post soon on how to go about bidding for the COE on your own.

Prediction on December 9:
Category A: $6,000-7,000
Category B: $6,000-7,000

Verdict on December 17:
Category A: $6,200
Category B: $2,656

COE Prediction - December 2008 1st Bidding Exercise

2008-11-27T10:12:00.006+08:00

The local paper screamed "This is the best time to buy a car" and guess what? Many motorists believe the journalist and the showrooms were crowded over the weekend. The dealers had to increase the price as the orders keep rolling in.

Net effect is that buyers who locked in the lowest price may have to wait longer for the dealer to be successful in the bidding. Worst-case scenario is that the dealer may have priced too low and fail to get the COE even after the stipulated number of bids (may be up to six) in the purchase agreement. Buyer may be asked to top-up for COE after one or two failed attempts.

So is it really the right time to buy?

Prediction on November 27:
Category A: $7,000-8,000
Category B: $6,000-7,000

Verdict on December 3:
Category A: $7,721
Category B: $6,501

Tales of the $2 COE

2008-11-23T17:32:00.004+08:00

The $2 Category A COE Quota Premium in the 2nd bidding exercise in November has brought a wide spectrum of reaction from motorists, dealers and the public. If you visit some of the motoring forums, you will come across interesting discussions about this freak bidding result.

The Happiest group
Buyers who were given a high COE rebate realized major savings to what they thought they are going to pay for their new rides. The highest rebate level that I know was $10,000 so the lucky buyers get a $9,998 discount.

Independent bidders should also be extremely pleased to have caught this rare opportunity of spending just $2 to get the certificate. Be reminded that $2 may not even get you pass some ERP gantries.

In-the-Middle group
Buyers who are given a low COE rebate realized some savings while the resale value of their new rides will be a lot lower compared to cars with high residual COE value.

The Angry group
Some buyers from Parallel Importers are screaming foul as the unethical dealers are not honouring verbal commitment of COE rebate. There are discussions of banding together and asking CASE to help them recover the "promised" COE rebate.

Another dozen angry persons are the bidders who had left their bid standing at $1. Think about that - they are the unlucky dozen who bidded and failed to secure a certificate.

Lesson Learned
This event has taught me an important point - NEVER neglect the details for CONTRACTS. If the purchase agreement contains all the details and includes all possible scenarios, then there should not be any conflict. Otherwise, the buyer and the dealer should cool down, sit together and try to come to a settlement without going to court and incurring hefty legal fees.

Fuel Consumption

2008-11-11T11:04:00.006+08:00

This is now added as a tool after the frequent hits to the original post.

Here is the method to get a good estimate of your ride's actual fuel consumption:
Step 1. Fill your tank completely.
Step 2. Reset your trip meter.
Step 3. Drive till your fuel guage is low.
Step 4. Read your trip meter when you arrive at the pump for the refuel.
Step 5. Fill your tank completely.
Step 6. Write your distance travelled on your fuel receipt and you can compute the fuel consumption on the previous tank of petrol by dividing the distance travelled (km) with the volume of petrol added (l).
Step 7. Go to step 2.

You should do this continuously or at least several times in a cycle to get a good estimate because pump attendants practise personal approach to fill your tank - some rely on the auto-stop, some continue to add till the nearest dollar value, some continue to add to the brim, etc. The variability of the auto-stop also introduces some difference to the actual fuel added.

Click here to download a tool (MS Excel format, 136KB). The tool can help record and compute the average fuel consumption over the life span of your ride.

COE Prediction - November 2008 2nd Bidding Exercise

2008-11-10T09:22:00.006+08:00

The current economic state is not encouraging - Singapore in technical recession, DBS Bank will retench 900 employees, Las Vegas Sands' loan repayment difficulty and many others. The lack of positive news does not help to restore confidence. The pump price has even been adjusted down several times over the past few weeks.

I had gone for a test drive over the weekend and got a pleasant surprise that the offer can go below the printed list price. It seems orders are no longer rolling in and the sales folks need to meet their quota. I think demand will remain flat although there are some buyers who want to have a new ride for the Chinese New Year in January.

Is it a good time to buy? I would think so if your job is secured or your pocket is deep. Most important of all is that you have done your sums and feel comfortable with the purchase - do check out the tools on this blog to help in your analysis.

Prediction on November 10:
Category A: $9,000-10,000
Category B: $9,000-10,000

Verdict on November 19:
Category A: $2
Category B: $4,889

Note on November 19: There are 1,852 bids for the quota of 1,851 certificates. So my last-minute bid has driven up the COE by 100% from $1 to $2. Now I got to figure out what to do with the $2 certificate of entitlement...

COE Prediction - November 2008 1st Bidding Exercise

2008-10-31T11:01:00.006+08:00

The stock market is going like a roller coaster ... up ... down ... up ... down, so uncertainties are mounting with many media reports of the recession, unemployment and central banks' action to calm the markets. This is a good time for the brave ones (need deep pockets and stable job though) to pick up bargains but I believe that the cheap sales will continue for some time. It is awfully quiet in the showrooms ... spooked because of the Halloween festivity?

Prediction on October 31:
Category A: $9,000-10,000
Category B: $10,000-11,000

Verdict on November 5:
Category A: $10,455
Category B: $ 8,301

Currency Impact on Car Purchase

2008-10-17T20:24:00.005+08:00

Anonymous said...
"Hi, would you be able to do an analysis between currency fluctuations and car prices / OMV / market / car distributors profits? With the current movement in korean / japanese currency, will be interested to know your thoughts. =)"

Well, I don't possess the knowledge and experience to make a good analysis of currency impact on those factors. I can give my layman perspective from a buyer's point of view:

1. Movement of Currency against S$
As the Korean Won has fallen against the US$ at a faster rate than against the S$, Korean cars should be cheaper now. However, there are other factors and time lack before impact from the rate change kicks in.

2. Distributors' profits
Distributors faced currency fluctuation risk but their exposure depends on the supply chain operating model. It depends on the inventory of cars being bought into Singapore ahead of the sales transactions. The distributor will be unlikely to lower the selling price if the existing stock is purchased at a higher exchange rate earlier. On the other hand, the distributor may hold the price steady even if the existing stock is purchased at a lower exchange rate - this is the case for the authorized distributor without any competition from parallel importers.

3. Profits made by Authorized Distributors versus Parallel Importers
Authorized Distributors usually have a higher operating cost to provide a better service level and also incur high advertising expense to increase the branding of the mark. The pricing strategy will also be dependent on the margin target at the point of sales versus after-sales servicing. Factors to be considered are the competitors' strategy, the availability of OEM parts and skills or technology required for servicing. The going concern of a parallel importer is an important criterion since there have been many reports of non-deliveries due to financial health and fraud - do your homework first before buying from the P.I.

I don't think you can time your purchase to an advantage of currency impact since there are so many variables in the motoring market. Affordability and suitability are more important criteria. Hope this is helpful.

COE Prediction - October 2008 2nd Bidding Exercise

2008-10-17T20:14:00.006+08:00

The stock market crashes over the last two weeks have made headline news. With the current sentiment so gloomy, I do not expect many new orders for the dealers. I have seen today's Nissan advertisement offering the Latio at less than $50,000. Now, that is a clear sign of dampened demand and fear of the recession impact.

Prediction on October 17:
Category A: $10,000-11,000
Category B: $11,000-12,000

Verdict on October 22:
Category A: $10,989
Category B: $7,589

Lowering Cost of Ownership

2008-10-03T10:53:00.004+08:00

Anonymous has requested for advice via comment on my earlier post Overtrade for a New Ride?

Anonymous said ...
"tks for giving your perspective. I am in the same situation as this person. current monthly mortgage is 900+, and my car is coming to its 5th year in Dec. My car paper value is at $38k. a dealer has put together a package of both rebate and overtrade such that my monthly is lower at 900 over 7 years although I still need to come up with cash of $5k. from my perspective, it seems to make sense: I pay less per month, I have a shorter loan period (7 yrs vs 10yrs currently), and I get a new car. in this instance, would you agree that its OK?"

Based on the limited information, I can attempt to give a high-level analysis on the situation.

Assumptions:
1) I will round down your current monthly instalment to $900 for ease of illustration.
2) You did not put down any downpayment for your current ride.
3) December 2008 is the changeover to the new ride.
4) The primary objective is to lower the Cost of Ownership and there are two perspectives to that too (A & B).
5) You will use the new ride up to its full useful life of 10 years.
6) Cost of Operating the Car is not included.
7) Net present value of cash or car is not computed.

A. Overall Cost of Ownership (full usable life of the Ride(s))

Current Ride only
-----------------
Total Cost = $900 x 12 x 10 = $108,000

Cost per month = $900

Current Ride + Overtrade to New Ride
------------------------------------
Total Cost = Payment on Current Ride up to December 2008 + Full cost of New Ride

Payment on Current Ride = $900 x 58 (2 months short of 5 years) = $52,200

Full cost of New Ride = $5,000 (downpayment) + $900 x 84 (7 year loan with $900 monthly instalment) = $80,600

Total Cost = $52,200 + $80,600 = $132,800

Cost per month = Total Cost / Total Useful Lifes = $132,800 / (58+120) = $746
The denominator (58+120) is the used life of current ride + useful life of the new ride.

B. Future Cost of Ownership (remaining useful life of the Rides)

Current Ride only
-----------------
Cost per month = $900
for the next 62 months

Current Ride + Overtrade to New Ride
------------------------------------
Total Cost for next 122 months = ($900x2)+$5,000+($900x84) = $82,400
Cost per month = $82,400 / 122 = $675.41

Thus, you can yield lower monthly cost with the overtrade if all the assumptions are correct. However, you should consider these factors when making your decision:

1. Is your financial health and job security in good shape to take up this deal?
2. Is the new ride at the same or better standard to your current ride?
3. Can you use your new ride to its full lifespan of 10 years? Analysis is based on full useful life.

Point 1 is key to a happier life - you will not enjoy your ride if you are constantly struggling in paying the monthly instalment and running costs (petrol, road tax, insurance, parking, maintenance, etc). Do take the time to make that decision and not get pressured by your dealer. Good luck!

COE Prediction - October 2008 1st Bidding Exercise

2008-09-30T13:51:00.004+08:00

Dealers are likely to get more orders with the 3-week elapse from the last bidding exercise but the credit crunch faced by many U.S. and European banks will cause even motorists here to be jittery about buying big ticket items. On the other hand, short-term interest rates are raising so motor loans may cost more in future.

To buy or not to buy? That is the question.
If there is no need, then you should forget about it.
(haha ... that is how bad my poetic writing gets)

Prediction on September 30:
Category A: $13,000-14,000
Category B: $14,000-15,000

Verdict on October 8:
Category A: $13,801
Category B: $14,400

Singapore F1 Night Race

2008-09-26T08:16:00.005+08:00

So what do I have to say about the Singapore F1 Night Race? Well, this is the first posting about the event since my blog is not a motoring sport one.

For the common motorists, the event has brought much confusion with the road closure in the Marina Centre area from September 20 to October 2. There were so many reports of late arrival for work this week.

I will just stay in the comfort of my home to watch the race on the television on Sunday night.

COE Prediction - September 2008 2nd Bidding Exercise

2008-09-10T16:22:00.005+08:00

Every time the quota premium falls below the $10K mark, bargain hunters will come into the market to pick up the offers from dealers that revise the selling price downwards. Therefore, the Category A COE quota premium will rebound back to previous level. The increasing cost of car usage seems to have detered new buyers of smaller capacity cars resulting in the recent weakness of the quota premium.

For the seasoned motorists in Singapore, it is a difficult change to fully rely on public transport so the demand for Category B COEs will be well sustained. The expected reduction in supply will prop up the Category B and Open COE quota premium.

Prediction on September 10:
Category A: $12,000-13,000
Category B: $14,000-15,000

Verdict on September 17:
Category A: $14,100
Category B: $13,301

Regular Flow upset by Lornie Viaduct

2008-08-30T13:39:00.005+08:00

The highly anticipated Lornie Viaduct was opened last Monday to downstream jam. The viaduct was built at a cool tune of S$34 million over 4 years. Although the objective to improve the flow at the Braddell Road, Thomson Road and Lornie Road junction was met, the increased flow of traffice to Lornie Road towards Farrer Road caused jams at peak hours.

The introduction of new option into our Singapore road network will always see an immediate spike in usage before the regular users start to moderate their timing or route to get back to a stable flow. I am sure that it will happen over time but the question is how long will it take to do so.

I do not use that route and would ask for regular users to give their comments and updates of the Lornie Viaduct over the next few weeks. In the mean time, regular users are urged to be patient and avoid causing accidents since that will throw the flow convergence off.

COE Prediction - September 2008 1st Bidding Exercise

2008-08-26T10:37:00.006+08:00

Looking at the previous result, it seems that the Hungry Ghosts did not scare car buyers off. The increase will lead to corresponding adjustment to the selling price, but dealers are probably minimizing price increase to encourage more sales in the current weak climate.

Update Aug 30: It was reported in the papers that the car population has been increasing in spite of the higher cost and it was mainly due to fewer older cars being taken off the roads as motorists are keeping their rides longer. Thus, LTA is likely to reduce the allocation of COEs in the next review. I got a strong gut feeling that motorists considering upgrading their rides will bite the bullet and buy now in anticipation of a raising trend. I am revising my prediction upwards accordingly.

Prediction on August 27:
Category A: $12,000-13,000
Category B: $12,000-13,000

Prediction on August 30:
Category A: $13,000-14,000
Category B: $14,000-15,000

Verdict on September 3:
Category A: $ 9,501
Category B: $13,389

COE Prediction - August 2008 2nd Bidding Exercise

2008-08-08T14:45:00.004+08:00

My poll for visitors did not get any respondent yet.

Wondering why showrooms and showflats are relative quiet? Well, it is month of the Hungry Ghost festival and most Chinese will avoid holding major events or big ticket transactions. Moreover, many investors are spooked by the stock markets. The basic economic theory should apply - low demand coupled with a known and steady supply should result in a fall in price.

My prediction is that the COE quota premium will see a marginal fall in the next bidding exercise in both categories.

Prediction on August 8:
Category A: $11,000-12,000
Category B: $11,000-12,000

Verdict on August 20:
Category A: $13,289
Category B: $13,890

Orchard Cineleisure

2008-08-01T15:14:00.000+08:00

MONDAY – THURSDAY

8am – 11.59am $1.28 First Hour
$0.32 / 15mins (or part thereof)

12pm – 5.59pm $2.14 First Hour
$0.54 / 15mins (or part thereof)

6pm – 7.59am $3.75 Per Entry

FRIDAY

8am – 11.59am $1.28 First Hour
$0.32 / 15mins (or part thereof)

12pm – 5.59pm $2.14 First Hour
$0.54 / 15mins (or part thereof)

6pm – 7.59am $3.75 First 3 Hours
$1.07 Every Subsequent Hour (or part thereof)

SATURDAY, SUNDAY, EVE OF PH & PH

8am – 7.59am $3.75 First 3 Hours
$1.07 Every Subsequent Hour (or part thereof)

Prices indicated are inclusive of 7% GST.
Prices may be subject to change.

Source: http://www.cathay.com.sg/cl_parking.html

COE Prediction - August 2008 1st Bidding Exercise

2008-07-29T13:54:00.004+08:00

My poll for visitors currently has two responses - 1 expected higher quota premium, 0 expected flat and 1 expected lower quota premium.

Petrol prices has been revised downwards five times and it seems that the inflation driven by oil has somewhat eased. However, there is still much uncertainty in the overall economic outlook. I believe that most motorists will choose not to change their rides unless necessary.

My prediction would be flat in the next bidding exercise, maybe just a mild decrease in the COE quota premium.

Prediction on July 29:
Category A: $13,000-14,000
Category B: $13,000-14,000

Verdict on August 6:
Category A: $12,501
Category B: $12,889

p/s My poll for visitors closed with four responses - 1 expected higher quota premium, 1 expected flat and 2 expected lower quota premium.

COE Prediction - July 2008 2nd Bidding Exercise

2008-07-11T14:01:00.005+08:00

My poll for visitors currently has three responses - 1 expected higher quota premium, 2 expected flat and 0 expected lower quota premium. Now that the time elapse from the last bidding exercise is back to two weeks, there is less time for dealers to push the sales. There is one major event - the Straits Times CAR-nival at the Singapore Expo next weekend may be the beacon to keep demand up.

My prediction would be a fall in the COE quota premium - likely outcome is 10-20% drop while a flat outcome may be possible if we have more favourable news on inflation and fuel price.

Prediction on July 11:
Category A: $13,000-14,000
Category B: $13,000-14,000

Verdict on July 23:
Category A: $14,101
Category B: $14,235

My poll closed with two more responses for lower quota premium.

COE Prediction - July 2008 Bidding Exercise

2008-07-07T13:31:00.004+08:00

My poll for visitors closed with four responses - 1 expected higher quota premium, 0 expected flat and 3 expected lower quota premium. With many news reports on recent inflation and uncertainty of crude oil price, it came as no surprise as the four pumps see an increase in price. I would also predict a lower quota premium but will take a position for an increase in quota premium for these reasons:
1. The elapse time between the last bidding exercise and this one is three weeks and thus, although the expected orders per week should be down, a 50% extra time would accumulate more in terms of absolute numbers.
2. The pricing is now closely pegged to the stablized quota premiums over the last 2 bidding exercises so dealers should have priced with reasonable tolerance.
3. The increase in pump prices would also encouraged motorists with guzzlers to replace them with a hybrid or CNG car in view of the lower car price and savings in fuel.

The next bidding exercise should see a mild increase before coming down in the 2nd bidding exercise in July.

Prediction on July 7:
Category A: $15,000-16,000
Category B: $15,000-16,000

Verdict on July 9:
Category A: $14,685
Category B: $15,501

Rebate Encashment

2008-07-03T20:08:00.002+08:00

Extract from the LTA news release - "With effect from 1 September 2008, registered owners of un-used and valid PARF/COE rebates can apply to LTA to encash their rebates. This is an additional option available to owners. Owners who want to use their rebates to offset the upfront taxes payable for a new vehicle according to the practice today can continue to do so. LTA will continue to issue rebates to vehicle owners upon de-registration of their vehicles. The rebates will continue to be transferable and be valid for 12 months. This serves to provide flexibility to vehicle owners."

This is certainly a positive signal from LTA in response to public feedback on existing policies - the contradiction identified was that the PARF/COE rebates cannot be encashed before the policy change and used for the registration of a new car which did not support the government's goal to promote the use of public transportation and reduce the private car population.

Is the policy change impactful? I think it will achieve its purpose for FEW motorists since most of us develop the reliance on our own vehicle and the switch to public transportation for the family and ourselves is very hard once you have experienced the convenience. I would love to see our country leaders walk the talk by using public transportation themselves.

To persuade motorists to give up their cars and use public transportation, the latter should be constantly upgraded and improved so that it will be convenient for commuters to get from point to point comfortably, conveniently and on time.

The Heeren

2008-06-27T23:02:00.003+08:00

Mondays to Saturdays
From 8 am to 5 pm
$2.00 for 1st hour
$1.30 for subsequent ½ hour
From 5 pm to 11 pm
$3 per entry

Sundays & Public Holidays
From 8 am to 11 pm
$3.00 for first 3 hours
$1.30 for subsequent ½ hour

All car park charges are subject to 7% GST.

Source: http://www.heeren.com.sg/information/info_transport.htm

More Gantries and Higher Rates

2008-06-18T21:52:00.001+08:00

I am surprised that CBD gantries see increased rates from 6-8pm when the Singapore River Line gantries start operations for the same time period. The later gantries are intended to discourage motorists from using the area as a through route as reported in today's Straits Times - "The Land Transport Authority (LTA) noted that about a third of the traffic entering the area does not stop there. The vehicles are just passing through en route to somewhere else".

My opinion is that the new Singapore River Line gantries may meet their objectives and fewer vehicles will go into the business district. So why the need to increase CBD gantries' rates now? I can accept an increase in two months if the criteria of travel speed above 20km/h at least 85 percent of the time on those roads is not met.

LTA could also be more transparent with the analysis and publishes the reports. Do these reports contain proprietary information? I am sure that there will be many reactions but isn't feedback from the public helping? Maybe there is a plan to market the traffic management expertise and experience overseas ..... perhaps "LTA (Singapore) Inc." in the making....

Overtrade for a New Ride?

2008-06-15T01:47:00.006+08:00

I have receive this request from LIM Y W for advice:

"Hi, need your help to understand the relationship between overtrade, cash rebates etc in determining if its useful to buy a car. My stituation is this

- have a car coming to 5 years
- outstanding loan is still around $50k in June. unlikely to get a trade in to full redemption value at normal circumstance.

hence,
- would it be useful for me to ask for an overtrade value to offset this process of selling off my old car?
- if I combine this with the cash rebate, would it make sense?
- for cash flow, I would also look at loans 7 years or above, and maybe even 100%

so far, current car is the longest I have held onto a car. looking to selling cos am keen on other models and people have said that if I want to sell, the best time is to do so before its 5th year. If I get the right car, I would look to holding onto it for more than 3 years, maybe even 5.

any advice?"

Let me first explain the Overtrade practice by dealers. It is introduced when the MAS regulation for a motor loan limit of up to 70% of the car price was in effect. A typical scenario was that the motorist wanted to trade in his old ride for a new one but the value of his old ride was not sufficient to match the downpayment.

Example:
Value of old ride = $10,000 (market value - outstanding loan balance)
Price of new ride = $70,000
Required downpayment = 30% x $70,000 = $21,000
Maximum loan amount = 70% x $70,000 = $49,000
Shortfall = $21,000 - $10,000 = $11,000

Overtrade amount = OT
In order to meet maximum 70% loan amount, 30% x (70,000 + OT) = 10,000 + OT
Solving the equation, OT = 15,715
Inflated price of new ride = $85,715
New downpayment = 30% x $85,715 = $25,715
Maximum loan amount = 70% x $85,715 = $60,000

Thus, the trade-in value for the old ride was increased to $25,715. The difference was that the buyer had to sign up a new motor loan of $60,000 instead of $49,000; no additional cash outlay was required.

Since MAS had relaxed the rule to allow for 100% loan, the Overtrade scheme has been used to help motorists with their current ride in negative equity. What is negative equity? See my post on "When is your Ride Breaking-Even?". The overtrade scheme is essentially carrying over the outstanding loan balance after deducting the market value of the old ride to the loan of the new ride. Thus, it is a cashflow tool but it burdens the borrower with a bigger loan.

What about Cash Rebate? See my post on "A Deep Dive into the Cash Rebate scheme". Cash rebate is essentially getting cash upfront for a loan with a higher interest rate; the cash is either used to lower the purchase price or returned to the buyer.

Back to Lim's request:
1. What is the objective of getting a new ride?
Lim: "am keen on getting other models"
Lim: "If I get the right car, I would look to holding it for more than 3 years, maybe even 5."

How do you define "right car"? If your criterion is fashionable model, then all cars will not be right after newer models are out. My definition of a right car is one that takes my passengers and I to our destinations safely with a reasonable known running cost.

In my opinion, it is a very expensive lifestyle to keep upgrading to a newer model every few years. It is fine if you can afford it but using the two schemes to facilitate that will create a long-term strain on your financial health.

2. When is the best time to sell your old ride?
Cars are made to last for more than 10 years and we should strive to utilize them for the full 10 years lifespan (limited by the COE expiry). You can use the "Financial Cost of Ownership Tool" to analyze the annual depreciation. Although your old ride has higher PARF rebate up to age of five years, you have to consider the rapid depreciation in the earlier years too. You can see clearly that the depreciation rate is decreasing over time i.e. you incur less to run your ride in the later years.

I can think of some good reasons to change your old ride:
a. Heavy fuel consumption, coupled by need to drive extensively for your job - consider green cars such as the hybrid or CNG model.
b. Need major parts replacement (eg. gear box).
c. Family size has outgrown current capacity.
d. Road worthiness is a concern.

Showroom cars are always appealing and you should always think carefully over the decision for a new ride. Consider the stakeholders in the motor business:
1. Government - new car sales will help to increase our budget surplus with the "income" from COE quota premium and vehicle taxes.
2. Dealers - they will go out of business if there is no car buyer.
3. Banks - they will go out of business if there is no borrower.

Don't step into a showroom and you will avoid being tempted to change your ride. Hope this helps.

Related posts: Cost of Ownership, When is your Ride Breaking-Even?, Costly Frequent Car Refresh?, Financial Cost of Ownership for Used Car

COE Prediction - June 2008 2nd Bidding Exercise

2008-06-06T22:56:00.004+08:00

The fall in the last bidding exercise is attributed to the start of the school holidays - most parents are away on travel with their children. On top of that, the high oil price will dampen the demand for the bigger c.c. lower end cars.

Demand will improve if more dealers cut their selling price. However, the raising cost of living will make it harder to do so. COE quota premium usually rebound a little after falling across the board in the previous round. This is what I observe from past trend.

Prediction on June 6:
Category A: $15,000-16,000
Category B: $15,000-16,000

Verdict on June 18:
Category A: $14,101
Category B: $14,689

COE Prediction - June 2008 1st Bidding Exercise

2008-05-28T21:33:00.003+08:00

The Great Singapore Sale has just started but authorized car dealers have not put out any superb discount to coax me into buying. The COE quota premium rebounded as I have expected from the drop in the May 1st bidding exercise. I see most dealers are holding the price steady for now. Thus, I do not expect much change in the upcoming exercise.
Prediction on May 28:
Category A: $15,000-16,000
Category B: $16,000-17,000

Verdict on June 4:
Category A: $14,590
Category B: $14,640

One Raffles Quay

2008-05-20T21:18:00.003+08:00

S$0.80 (excluding GST) per 10 minutes block from Monday to Friday, 6.00am to 6.00pm and Saturday, 6.00am to 1.00pm.
S$3.00 per entry (excluding GST) for Monday to Friday after 6.00pm, Saturday after 1.00pm, Sunday and Public Holiday.

Season parking fee is S$300.00 (excluding GST)

As updated by Rayson Tan on May 20, 2008.