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Car forum answers motorists' questions

07 Mar 2013|6,168 views

The Straits Times held its first car forum to answer questions from motorists about the recent financing restrictions implemented by the MAS.

Among the few topics discussed, COE was one of the most compelling

Mr Leong: I think the question relates to which is a better value for money proposition and that depends on individual circumstances. Of course from a quantitative analysis, we can look at the cash flows or alternatives and discount them to net present value, but what is more important is that people should look at the risks of the decisions they make. You will be surprised at how many people are made bankrupt because of car loans or borrowing to extend their COEs.

Yes of course there is a difference. The upfront amount and the amount you get at the end of the period is different. It really depends on the individual financial situation. Perhaps the one that requires higher upfront or short term cash flows is the better value for money proposition, but if one has to borrow money in order to do that, then maybe that is the wrong method because the risk perspective is different.

Will COE prices go up or down?

Mr Cheah: I think it's too early to judge. There are too many factors affecting the COE prices. For that matter, I think everything is purely speculative. But my gut feel is that these new regulations can ease the premiums in a way. However, there are enough people that can afford to buy cars in Singapore - quota of around 20,000 COE premiums. For that reason, I don't see COE prices crashing or tumbling.

Mr Liang: I think COE prices will drop because less people can afford to buy cars now, so there will be lesser demand. Having said that, since credit companies are not subjected to regulations by the MAS, they may offer various attractive packages, so it is hard to say how much the COE will go down.

The Straits Times held its inaugural car forum recently to answer motorists' questions during a one-hour live blog.

The panel of experts included The Straits Times' Senior Correspondent Christopher Tan, Motor Traders Association President Cheah Kim Teck and Past President of the Society of Financial Service Professionals Leong Sze Hian.

Here are two of the more popular questions posed. For the rest of the burning questions, please visit here

Can I get a COE rebate if I scrap my car within the 5 or 10 year period? What's the difference between a 5 and 10 year renewal of COE?

Mr Leong: I think the question relates to which is a better value for money proposition and that depends on individual circumstances. Of course from a quantitative analysis, we can look at the cash flows or alternatives and discount them to net present value, but what is more important is that people should look at the risks of the decisions they make. You will be surprised at how many people are made bankrupt because of car loans or borrowing to extend their COEs.

Yes of course there is a difference. The upfront amount and the amount you get at the end of the period is different. It really depends on the individual financial situation. Perhaps the one that requires higher upfront or short term cash flows is the better value for money proposition, but if one has to borrow money in order to do that, then maybe that is the wrong method because the risk perspective is different.

Will COE prices go up or down?

Mr Cheah: I think it's too early to judge. There are too many factors affecting the COE prices. For that matter, I think everything is purely speculative. But my gut feel is that these new regulations can ease the premiums in a way. However, there are enough people that can afford to buy cars in Singapore - quota of around 20,000 COE premiums. For that reason, I don't see COE prices crashing or tumbling.

Mr Liang: I think COE prices will drop because less people can afford to buy cars now, so there will be lesser demand. Having said that, since credit companies are not subjected to regulations by the MAS, they may offer various attractive packages, so it is hard to say how much the COE will go down.