By Chemical Generation
The government just announced a change in the COE quota system. From April onwards with a pro-rated formula first and then every 6 months from July, the car population growth rate would be the number of deregistered vehicles in the previous 6 months period plus 1.5% of the current car population.
The aggravating factor to the decreased supply of COEs is that since COEs are fewer, its demand and price becomes inflated, there would be more people holding on to their cars. Hence, the actual number of deregistered COEs recycled into the market would in turn be fewer.
The car industry community is forecasting trends of 30% fewer COEs and higher prices for new cars as a result. Kia has already increased car prices by $5000 for Cat A cars, the staple category for the middle class driver.
For the car buyer, the road ahead is fraught with racing prices. In February 2000, the COE for a 1600cc car and below was a frightening $43,998 and in that year, the COE dipped to a so-called lowest price tag of $32,800 in December.
Whether there would be a repeat of the terrifying period when COEs for small cars hovered in the $30,000 and more range remains to be seen.
Is the COE quota reduction good or bad news? Without question the answer would depend on whom you ask.
Authorised dealers would feel the brakes applied on their sales. Used car salesmen see it as an opportunity for them to compete again as buyers might find the prices of new cars with new COEs daunting. Car buyers would generally be irritated that their desire to change cars every 3-5 years would be more costly than before and the post-1990 Singaporean disposable car culture might stall for a while.
Car owners, however, might heave a sigh of relief as there would be fewer cars on the road and a corresponding decrease in the frequency and intensity of traffic jams consequently, depending on where and when one drives.
Over-extending a bit, taxi drivers might also see this development positively as those who do not want to take buses but would not buy a car, might end up taking taxis as a substitute to owning a car.
Strangely and probably as a result of bad market forecasting, NTUC’s car-sharing business is coming to a stop when this announcement on the reduced COE numbers could actually revitalise the car-sharing niche market. Furthermore, the government’s purse would also fatten from higher COEs. On the other hand, fewer number of cars on the roads might mean fewer car-related taxes e.g. road tax, ARF.
The government seems to be swinging back to the argument that it wants the car population controlled. In the past few years, the government allowed the growth of cars because of the public’s expectation of car ownership. Hence, while owning cars became less expensive relatively, car usage became more expensive with the erection of more ERP gantries and more punitive ERP rates. Nevertheless, the sudden surge in cars was not a result of government generosity but bad maths.
The LTA came clean that the formula for using projected deregisteration of cars for the year instead of the actual deregistration of cars for the past year, swerved the regulation on car population into a ditch.
In recent years, Singapore’s vehicle population growth rate was greater than 5% instead of the allowable growth of 3% stipulated between 1990 and 2008. Last year, when the allowable growth rate was halved to 1.5 per cent in an effort to slow down the car population size, the actual growth was 3.4%.
Since 1990, the COE demand and supply has been based on what you can bid and what the government wants to release into the market. This is probably the easiest way to manage the car population – i.e. car buyers outbid each other to own a car, or cars.
Therein lies the conundrum – is there a better route to control of the traffic problem? Yes, assuming the government breaks free of the COE mindset.
Controlling the car population need not only be through the failing COE system. The direction to take is that it is not about regulating the car population per se, it is about controlling car congestion on the roads even without the COE. It is not about not making people own cars, but making driving so expensive that they would not want to use their car unnecessarily.
Without the COE the car is “cheap” considerably. Car owners therefore won’t feel pained if they leave their car at home and routinely take public transport. This is the re-tuned thinking into allowing car ownership without causing car congestion.
The Off Peak Car scheme, as an example, already offers potential if it can be revamped to a mainstream rather than minority car ownership scheme. Allow people to own cars, but driving it indiscriminately becomes a hole in the pocket, this thus potentially decelerating the car congestion problem on the road.
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Has anyone looked at how Car Insurance Premiums have increased each year for existing Car Owners? This form of controlling Road Accidents & Fraudulant Claims, is another money spinning policy for this administration.
They are too intellectual to come up with anything more than Wide Net Policies.
So what are we going to see down the road?
Expensive cars, high cost of usage (erps, parkings, etc).. Already the petrol price is creeping up.. My guess is parking will go up after the GE..
i almost believed that the PAP government suddenly woke up and breathed in the carbon monoxide.
…until i read that it will add 1.5%.
but, money first, right?
Pay as you Drive per kilometre of public road? No road tax, COE and ARF. Just the cost of the car and insurance fees tie to usage of road. Much more disposable income to spent on other stuffs than cars and additional fees.
CJ
Mar 17, 2010 17:21
Has anyone looked at how Car Insurance Premiums have increased each year for existing Car Owners?
The moor insurance premiums goes up like nobody business already more than 200% and still there is no control by the govt or CASE. I suspect the big insurance players are profiteering from the blessing of our elite govt, the more you make, the more we make policy. Last time I used to pay something like $800+/year for a new car but now it shot up to more than $2K and still going up. To make sure they continue making, the usual NCD of up to 50% is only able to be useful up to 5 years and after that reverse back to zero, got this inf from an agent who said the market has gone crazy these days. CASE should start investigating or just shut up becos the govt allowed them to. Motorists are really taken as suckers.
Bad maths?
More like incompetent, arrogant LTA officials out of touch with the ground, unable to respond to mistakes, and refusing to admit to their own errors of judgement.
I also remember their booboo of insisting that every new diesel engined commercial vehicle must conform to EURO 4 emisson standards when such vehicles were not yet available in the world. When implemented it resulted in a few months of few commercial vehicles registrations, and a very low COE for months, and then followed by a rush where tens of housands of old commercial vehicles with old inefficient polluting engines being able to renew for another 10 years of life, at very low rates. There are now thousand of these old vehicles spewing carbon monoxide on the roads today thanks to their incompetence.
Did anyone hear of any Ministers or Perm Secs sackedor demoted for this series of major cockups?
I have not.
Most likely they continued to award themselves their high annual performance bonuses.
singapore roads should have been planned and designed to cater to this car population long long ago and there is no need for COE or ERP if the roads are wide enough or multi-leveled .
If i were to design the roads , i would have gotten an estimate from consultants how many cars will ply the roads considering how slow the public transport can be at times and how many traffic lights (stopping), how many bus stops (stopping).
People buy car because its either spend more or suffer the excruciation of public transport. Time spent on bus can be more productively spent on other things. So, my point is most car owners pay the most expensive car price in the world because of no-choice. of course, we must not include the rich. To them, ERP or COE or anything is not a problem at all. Its something that they cannot feel .
So, in my view, properly planned and planned in the right way, there is no need for COE and ERP as currently with all these traffic is still a problem, not that i know that it ever was solved before.
If you want to target usage, the ERP is a powerful instrument, but only if you’re willing to use it all the way. Are Singaporeans prepared to see $5, $10 ERP rates in exchange for no COE?
A high COE would be useful in reducing the number of cars.
However, our public transport needs to improve considerably.
I think the high COE was in place, car population wasnt that much. But the government needed $$$, so they decided to go for low COE with high ERP, pay as you drive and now the population has grown beyond control, the whole SG is congested and they are reverting back to high COE scheme. But ERP will only get higher and higher in the name of regulating traffic in a huge car population country.
Honestly, we are all pawns, there is no need to discuss, a lot of motorists are entrapped. After getting cheap COE cars, you asked them not to drive? ERPs to regulate traffic? Really? They are trying to maximise $$$ with a balance, the whole singapore is congested, there is nothing you can do. Some places they set up Electronic pricing for car parks, then few cars go into these carparks and they tore them down? Why? It is all about making $$$.
Even MRT and Bus frequencies are reduced to ensure carriages are packed like sardins. They are done on purpose, they want every carriage to be full. We have become very kiasu.
ok here is where the problemo rised…low COEs wow whoa great..low low $1000 deposit as 1st payment..largi best..even our homeless mr yusof can also buy a brand new car…
so if you,me,my nephew start buyin brand new cars..what do we do with it? parked @ home liked the shortleggs minister onced mentioned in parliament donkeys years ago?
lets all go cruisn..thats where the bips beeps started..soon it will be followed by honkin…
than highway blue/red cisco 3 wheelers light flashin..accident here..accident there..largaed everywhere..even texis are lanecuttin everywhere..meself almost had an accident yesterday..when 2 different coloured texis refused to give way…
One reason for the jam we see in expressway is due to the design of exit/entrance to expressway.. LTA should have designed the exit to come before the entrance, so that cars exiting the expressway do not have to merge with cars entering the expressway…
In the US, they have a traffic light system for cars entering expressway, timed such that at most one or two cars can go at intervals of couple of seconds, thus regulating vehicles joining the expressway.. I believed someone suggested this some time ago, but lta rejected the idea..
Also we should implement the malaysia system of counting down to the green light, so that drivers can get ready to move off once the light turns green, instead of wasting few seconds to put down newspapers, release handbrakes, engage clutch, etc… But this suggestion was also rejected by lta..
Somebody suggested to refund parf value in cash to owners who deregistered their vehicles, but was rejected by lta also, citing reason that it is difficult to estimate number of vehicles that will be deregistered and thus budget for the refund.. But now this is implemented, so how come lta is able to budget for it now?
Lim,
LTA is the most obnoxious stat board.
any ideas not thought up by them, will be rejected as “not feasible”
FeverGuy – I think the “pay as you drive” is a good idea as it is relatively “fair”. With the IU in cars, it should be a matter of time. And every time before elections, the governments can give car usage rebates for lower income car owners.
lososay – Yes, “bad maths” is merely an euphemism. But for the thousands who bought cars recently, I don’t think they are complaining much as they have benefited from it.
Whose fault? – No doubt that the government is making money out of both ERP and COE. The problem for me is that it is tolerable if they want to make money, but give me the quality of service e.g. no traffic congestion. Paying high price for COE and ERP and yet there is traffic congestion still sounds like a plan for losing a GRC to me.
Ler Kan Neo – I can’t think of any major city that has no traffic jams. There can never be enough roads and enough planning. However, building roads is only part of the solution, and it is important to both decrease car congestion and improve the quality of public transport as well.
JW – Exactly. Improve the public transport system. Our public transport is not the worst and every major city has public transport woes but still SMRT and SBS can do much better to deal with the peak hour crowds. There is somehow just not enough trains. The easiest way to improve public transport is to allow real competition to the incumbents’ oligopoly.
Jason – ERP is a powerful instrument to regulate traffic but it is not executed properly I feel. I think ERP should be more expensive so that cars can kept out of certain roads at certain times, but the alternative roads should be free of ERP so that people who don’t want to pay can take the free road and live with the jam, so in a way, all expressways should have ERP but none on the regular roads.
lim – Good points on the design of exit and entrance to expressways. I think in the US there are parts of highways that only cars with at least 3 people can use the fastest lane? But I’m not sure how they implement it.
By cutting down the COE another problem will come up, more overcrowding of our public
transport system! I can’t imagine taking away 50,000 vehicles from the road, this is just a low figure, and pushing all these people to public transport. It won’t help when they reduce the frequency for maximum capacity.
It’s very normal for this government to fight fire with fire and more often they also fail down the road too. There are plans too for a GSP based invehicle devise. When that comes, your car effectively becomes a “taxi” , you pay for the physical car to directly tax you for usage on the roads!
Insurance companies make money by investing what they collect from policyholdes. Almost all lost their pants during the financial meltdown and one way they can recover these losses is to overcharge customers in markets where regulators make insurance complusory, including motor insurance, public liability insurance, etc.
Compared to 10 years ago, COE prices are dirt cheap currently. Then again, you’ll hardly get anywhere in Singapore without encountering a traffic jam nowadays.
Way to solve road congestion is to build more extensive mrt network and build faster.
Shanghai is a good example. It has about 10 mrt lines now. The network covers wide areas of Shanghai. Do not be overly calculative on profit and loss for MRT.
I liked it when COE prices were insanely high… When a 1.6L honda civic was over 100K.
That meant only those who could afford it could buy a car. Less cars on the road, less jams.
When the COE prices plummeted, every tom, ah beng and mohd bought a car. What happens when there are too many cars on the road? YES… TRAFFIC JAMS…
Worse still was the introduction of the cherrys and kias and chevrolets. 30K with no downpayment could net you a car… even if you don’t need one. More cars…. MORE TRAFFIC JAMS…
Reducing the number of COEs is a good idea. Too little too late because there are already too many cars on the road, but at least there won’t be that many new cars.
COE or ERP has NO EFFECT on the Rich.
So does this mean , by jacking up COE price and ERP price, will address the issue?
If COE for a basic car like kia goes to $100K, i am sure no need ERP also solve traffic congestion problem as most of the 85% flat lease certificate owners would not be able to afford a car in such a scenario. And these are the main bulk of the population and drivers on the road now.
But does this not mean such a system is ELITIST in that it does not deter the rich to own cars even if COE is $100K? There are still many rich in singapore even though majority are flat lease certificate owners.
So, ERP or COE is not the answer.
The solution is to build more road space. Straight away, i know some of you may say sg limited road space. That is not true. multilevel underground and flyovers can provide several 100% more road space. Assuming a finite population of 6.5 million, just have that much road space to cater to 1 car per family. No one left behind without a car. haha.
So, u can by now see my point is its not the excuses, its the solution that is not yet there.
@Jeff, 1.6L Honda Civic was ard 120K included COE during ’94 if I’m not wrong but the jam was equally bad, not forgetting that the population was not that high then. To effective reduce the car number and jam, eliminate the current bidding system and each COE should at least priced at $200K and above so that people will think twice before buying. Current road tax is way too low, should increased by 200% so that we could force current driver to give up driving. Whereas for the HDB car park, the fee should not be flat charges across the whole Singapore, prime and mature estate should be charge more since these estate are more expensive. Also all car owner should also pay for carbon tax and lastly, any household owning more than a car, the next car’s COE will be double the price . With these implementation, I am sure you and me will be happy driving with no jam :)
@Jeff and FaceTheFact
Well, the $ faced pap ministers won’t agree to your suggestions, simply because they will collect less $… and also, what happens to companies in logistic business, construction business, etc.. They will pass the cost to their customers.. So will stagnant pay/decreasing pay for majority of singaporeans, who’s going to afford those price hikes..
Also, what’s to stop people from turning to motorcycles.. It is still much cheaper…
Just think, with expensive cars, couples will think trice before having children.. knowing that they have to reach childcare centre before 7pm to pickup the kids..
What then? More foreigners.. At the way things are going, I am just wondering why we still need schools.. Just let china, india educated their people to degrees, masters degrees and phds, and we just need to import them, instant engineers, scientists, managers…. Imagine how much tax payers $ can be saved.. Of course, all those lecturers, teachers, principals, MOE staff will be out of jobs…
Also, what’s to stop people from turning to motorcycles.. It is still much cheaper…
and what did the shortlegg minister do? he says 1 car= 2 motorcycles..so he raise the road tax for motorcycle from an average $30/annum to more than $100/annum…
than again..it was the harley davidson gang that taunted him shortleggs and all bikes above 800c.c. paid a premium roadtax which is equalvalent to a car…remembered the 3 wheels motorcycle that cost importer more than $80,000 that have a roof which looked liked a flyin plane without a wings?…lta decided to class it as a car simply because it had a steerin wheels instead of a handlebar…
@lim,
Government will be daft if they implement my suggestion…haha. Don’t forget, I am a driver too and although is jam, I have no complaint because the more we complaint, the more they raise the cost of driving.
@myviewsarestillbetterthanfacethefact,
Good to know that there is a “My Views” supporter, another PAssP ball lickers.
i tell you a joke on lta based on MY realive experiences..i decided to go on GIRO payin the roadtax last year..1st 6 month ain’t no problemo… this year insurances dued..so as usual paid my insurance on time 1 month ahead before the expired time frame…don’t know whose fault in coordinatin…insurance did not update nor linked ( i didn’t even know i must linked the insurance and lta to be dancin partners)..so my GIRO was not deduct simply because lta expect me to do all the necceesarry procedures…in the end i was fined $60 extras because i failed to intro the dancin insurance company to lta..i asked lta why i bothered to settle by GIRO if i hav to pay a penalty thru no fault of mine? lta callanswerer says pay FINES 1st..than appeal…
this is singapoor..a real FINE city….
~sigh~
i used to support the present party.
of late, i have been pissed by their actions, words, thoughts, attitude.
so, i am voting for a party who ultimately appoints a minister, who is paid a million bucks in singapore dollars, to tell me that they made a mistake by releasing more coe against the number of cars taken off the roads?
so, am i also right to say that the erp is not justified?
why is this so?
i mean, it is not our mistake and we are made to pay for it?!
side track a bit. i am staying in compassvale link. there are insufficient parking lots. it is obviously hdb’s mistake and apparently, i, as a resident, have been affected.
so now what? again their mistake and i have to pay the price for their mistake?
so what is next?
i have had enuff of this stupid party. i am beginning to hate, not dislike or disagree but hate, this present party.
//Punggolsouth resident
well said.
We have been made to pay for these pigs’ mistakes
“Without the COE the car is “cheap” considerably. Car owners therefore won’t feel pained if they leave their car at home and routinely take public transport. This is the re-tuned thinking into allowing car ownership without causing car congestion.”
TOC – you got the formula right!!
Guys wake up!
Regardless! if the price of car is the most expensive in the world, which is the present singapore situation, or the car is as cheap as those in europe or america or else where, i believe the situation will be the same if not comparable to the extent that having coe or erp or not can be the same situation of traffic jam on CTE and other expressways or roads.
I like to know who would like to challenge me on this?