SINGAPORE: Upon Wednesday (July 20), the Certificate of Entitlement (COE) superior for the Open Group of cars hit a record S$114, 001 , surpassing a 28-year high set two weeks earlier. Premiums rose across the board as well.
What makes up about the increased prices? Is the entrance associated with private-hire vehicles as well as the explosion of a shipping economy a factor? Can the system do with tweaks or could it be working exactly as intended by pricing cars out of the reach of those who cannot pay for it and therefore reduce the car population?
Steven Chia, CNA’s Center of the Matter podcast web host put these queries to his guests: Associate Professor Terence Fan of the Singapore Management University, Arthur Wong, managing director at ACM Automobiles and Aaron Bronze, CEO of Automóvel, an online car marketplace.
Here are some shows of their conversation:
Why are COE prices so high now?
Aaron Tan : We have a lot more cars being re-registered … more than . 10 years ago or even two decades ago. Because of this, there’s definitely much less COE today than there was 10 years back. Number two, … demand today is not only from the consumers viewpoint, it also stems from the particular private-hire vehicle side of stuff, correct? So , if you think regarding all the Grab and Gojek drivers around, they do need a vehicle, … that furthermore increases the demand … And the last thing I would say is, using a lot more electric vehicles coming up in the market, we are seeing a multiple whammy (of) issues here … So , the prices being exactly where it is today wasn’t a big surprise to us.
Assoc Prof Terence Fan : Whether it’s just replacing one car with one more, there’s no net change and no net embrace demand… Let’s say we now have 100 people or companies wishing to purchase cars. Now there is certainly 101, that is due to this 101 person or entity who wants to buy a COE at whatever price… That will push the overall prices. Not necessarily like … you can blame the a hundred original car owners, or you can pinpoint this as an one brand new owner. I think it is extremely difficult. But so long as you have that one extra person willing to pay, that pushes the price up for all.
Q: Has an influx of wealthy individuals who are willing and able to bid a factor?
Arthur Wong : Yes, right now, people are more adept with buying continental cars, more expensive cars, sports cars. The increase of foreigners is definitely (that) they’ve powered the thirst designed for luxury vehicles. Therefore yes, I agree.
Q: Have private-hire businesses affected the system?
Associate Professor Terence Enthusiast : For the private-hire companies, if you look at how many of them have actually placed bids … you may find that truly, they don’t bid a lot. They don’t make a wide range of bids.
Aaron Suntan : So , these types of PHV (private-hire vehicle) companies coming out saying they may not be actually the cause of it is probably true. But to say that it is entirely nothing to do with the systems is also incorrect, correct? Because the demand is certainly stoked by the proven fact that there is demand regarding PHV vehicles. There’s demand for Get food deliveries and stuff like that. Because of this, all these people are just doing their work opportunities right. But they have indirectly caused the particular COE to be increased … because there are more people bidding for the cars.
Q: Should the COE system be changed? How so?
Arthur Wong : Possess a fixed premium for every COE category to avoid volatility in the market. I would like to just cut this COE bidding thing, just one fixed price for this category and another fixed price for that category. That’s the things i feel it’s the best for people.
Assoc Prof Terence Fan : Instruction or lower the original bidding price to manage speculative bidding. I think for me, I was simply looking at what Arthur was saying about the initial suggested bid price. That appears to actually trigger some secondary reaction within bidders that they say, “Oh, the beginning price is S$80, 000, so I got to bid more. inch So , I will really try to maybe test, lowering that or possibly getting rid of that, yet provide some assistance. So that sort of ideally will reduce some of the biases, that will initial starting bet may actually cause the bidders.
Aaron Tan : Number one is to just keep it simple, right? Number two, actually adding another class by itself for particular needs might be interesting so that we can make certain that vehicles are more accessible.
Q: What advice are you experiencing for people looking to get a car?
Arthur Wong : Just buy one that suits your budget and your needs. I think that’s most important.
Aaron Tan : Certainly, (buy a) truck, don’t buy a brand new car.
Assoc Prof Terence Fan : I would think, actually, consider public transport and use car spreading services before getting your own car.