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Bangla123
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 10:25 am

buzz1211 wrote:
Me thinks many will change their positions when the COE goes down rapidly to more sane levels. Sure 40 per cent on a $200k car is wow. But 40 per cent on a $120k car is less painful when that same car cost less because of lower COE. When many are priced out of buying cars, wouldn't COE prices plunge?

The only guy who happened to chance upon what's really going on. The rest of you with your WP mentality only know how to see what's in front of you. Go ahead, vote PAP out of the cabinet and go with the opposition. The rich will just move their money elsewhere. And all you ll be left with is basically Johor town
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Bangla123
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 10:28 am

Roystonnn wrote:


Haizzz... I wana change car but canot now... Diu..

If you wanna blame someone , blame ppl like this guy. Every couple of years wanna change to a bigger better car. That's the reason why a used Camry can cost 120k
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TDO
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 10:37 am

I think gahmen want to encourage prudence with spending. I am sure there are quite a few who know that they can hardly afford to support a car but purchase anyway for family convenience or for other reasons. We cannot stop people from buying what they desire, since they know what they are doing with their money. And despite all the stiff measures that is introduced and these people who can hardly afford it still insist on owning a car, it is their given right to do so. After all, it's their own money they are spending, not ours. So who are we to tell them what to do and what not to do.
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 10:52 am

nutty88 wrote:
Back to the thread topic....

I failed to understand why the purchases of used cars have to follow the new rule as used cars are already within the quota and does not contribute to the growth of the no. of vehicles on the road.

If the purpose is to prevent defaulters, how many cases do we have a year that require such stringent policy to be in place?

The rich will continue to buy as they have no issue to fork out more than 100k for a car but for the mid to lower end of the sandwich class, how many of us can really come out with the initial down payment? And what about those who really need a car to make a living?

Oh, and the best part is that this policy does not apply to credit companies. Now such companies are jacking up the interest rates so as to provide loans to those who 1) cannot afford the down payment and 2) stretch the loan beyond 5 years.

The new policy just doesn't sense and it is double standard. WTF! Can some kind soul explain it to me?


wanna open a finance company to serve this niche market???
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Tituman
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 11:00 am

Bangla123 wrote:
buzz1211 wrote:
Me thinks many will change their positions when the COE goes down rapidly to more sane levels. Sure 40 per cent on a $200k car is wow. But 40 per cent on a $120k car is less painful when that same car cost less because of lower COE. When many are priced out of buying cars, wouldn't COE prices plunge?

The only guy who happened to chance upon what's really going on. The rest of you with your WP mentality only know how to see what's in front of you. Go ahead, vote PAP out of the cabinet and go with the opposition. The rich will just move their money elsewhere. And all you ll be left with is basically Johor town


+10.
It seems there are only 3 person here with the same line of thoughts. Every day here and there hear people bashing the gov. Don't be clapping hands for the WP too soon. They are nothing but shrewd politicians who don't care about your rice bowls. See how they continued to talk on reducing the FTs they couldn't care less what happened to the smaller SMEs. Slowly dying a slow death, thats what is happening to them for lack of cheaper labours. I am what I am.

titu
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Roystonnn
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 11:28 am

Bangla123 wrote:
Roystonnn wrote:


Haizzz... I wana change car but canot now... Diu..

If you wanna blame someone , blame ppl like this guy. Every couple of years wanna change to a bigger better car. That's the reason why a used Camry can cost 120k

Cannot blame me leh..
I am the victim of the policy.

I support govt by having more babies.
Now i have 3 children less than 2yrs old.
Sedan canot fit leh.. Need to upsize my car. Haizzz..

The feeling is like i wana change shaft
but dgman ask me to find a coach instead. Bahaha!!! Very Happy
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nutty88
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 11:41 am

Tituman wrote:
Bangla123 wrote:
buzz1211 wrote:
Me thinks many will change their positions when the COE goes down rapidly to more sane levels. Sure 40 per cent on a $200k car is wow. But 40 per cent on a $120k car is less painful when that same car cost less because of lower COE. When many are priced out of buying cars, wouldn't COE prices plunge?

The only guy who happened to chance upon what's really going on. The rest of you with your WP mentality only know how to see what's in front of you. Go ahead, vote PAP out of the cabinet and go with the opposition. The rich will just move their money elsewhere. And all you ll be left with is basically Johor town


+10.
It seems there are only 3 person here with the same line of thoughts. Every day here and there hear people bashing the gov. Don't be clapping hands for the WP too soon. They are nothing but shrewd politicians who don't care about your rice bowls. See how they continued to talk on reducing the FTs they couldn't care less what happened to the smaller SMEs. Slowly dying a slow death, thats what is happening to them for lack of cheaper labours. I am what I am.

titu

With this change in policy, how is it going to impact the used car dealers? Will car dealers be selling more or less?
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Tituman
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 12:11 pm

Personally I think the used car dealers will have better sales as there is no additional ARF added on to the old cars. Most of these dealers have connections with credit companies and I see their biz will get some boost from iThats how i see it and I could be wrongt.
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TDO
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 1:01 pm

It will impact the used cars too because of the upfront payment and the maximum loan period of 5 years. Plus used cars interest loan rate is higher than new cars.
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Xavier.t
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 1:09 pm

Every policy fired out will recoil and MAY have repercussion. Best to look thru' different perspectives; I oppose doesn't mean I'm for WP, I agree doesn't mean I support PAP.

I felt sad for couples who need larger cars for the family. I also see an old aunt laughing in the school because her son wanted to own a car so much that she was considering to look into her savings.

We won't know how effective this policy will work until 2-3 COE bidding after. Maybe COE will drop to a low that prices could possibly look reasonable? But i do know the public transport services will deteriorate further if they don't improve quickly.

What can bankers tell about the interests? Reducing the loan period means lesser risk and cash outlay since its max 60% loan now. How does it warrant to increase?
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nutty88
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 1:46 pm

Tituman wrote:
Personally I think the used car dealers will have better sales as there is no additional ARF added on to the old cars. Most of these dealers have connections with credit companies and I see their biz will get some boost from iThats how i see it and I could be wrongt.

So for used car market and I am not talking about the high end used cars, I believe it will impact their business because folks who need to buy a car for day-to-day transportation will have to fork out a lot of cash and they may not be in the capacity to do so. Hence, the only way is to borrow from credit companies with higher interest rates. That means their monthly payment will increase as well and the spending power on other items will be decreased. Will it then also increase the number of defaulters?

I believe this scheme is good to curb growth in the car population but as i said earlier, used cars are part of the existing car population. So why the need to impose new policy which makes it more difficult for genuine ownership?

Also we are discussing about the new policy and not the political parties. Thus, I agree with Xavier that disagreeing with the policy doesn't mean we are for the opposition and vice versa.

@TDO, please note that credit companies do not fall into the new policy and these companies can extend loans without down payment and it can stretch beyond 5 years.
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Gray
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 2:30 pm

Time to buy...woo hoo!
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Fatboy
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 3:14 pm

What is the differecnei in interest rates by the banks and credit companies ?

Think it keeping the car for a longer period of time, low COE and higher interest is better and high COE and low interest for pple who wants to change car every few years with min. 'loss'
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nutty88
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 3:35 pm

Banks are offering 1.88% p.a. for new cars whilst credit companies vary in terms of rates. It can be anywhere between 1.88% - 3.88% and I think it is largely due to the loan amount and tenure.
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Tituman
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 4:32 pm

nutty88 wrote:
Banks are offering 1.88% p.a. for new cars whilst credit companies vary in terms of rates. It can be anywhere between 1.88% - 3.88% and I think it is largely due to the loan amount and tenure.


Thats right Nutty.

@TDO.....Fred take a brand new car priced at $140,000 X 1.88% X 5 yrs = $153,160 divided by 60 months = per month instalment of $2,552.60

Now take a 2nd hand car priced at $80,000, interest at 3.88% X 10 yrs loan = $111,040 divided by 120 months = per month instalment of $925.30.

So if they do not rein in the credit companies, people will get used cars even if interest rates are higher. Hope my estimated calculations are correct. Even though they paid more for 10 yrs tenure, they can still drive a car for $925 per month. They will not think of the losses they will incurred if they surrender before the 10 yrs are up.
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ChrisD
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 4:40 pm

Would say its a good move to curb the car population.
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slinger
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 4:42 pm

Tituman wrote:
nutty88 wrote:
Banks are offering 1.88% p.a. for new cars whilst credit companies vary in terms of rates. It can be anywhere between 1.88% - 3.88% and I think it is largely due to the loan amount and tenure.


Thats right Nutty.

@TDO.....Fred take a brand new car priced at $140,000 X 1.88% X 5 yrs = $153,160 divided by 60 months = per month instalment of $2,552.60

Now take a 2nd hand car priced at $80,000, interest at 3.88% X 10 yrs loan = $111,040 divided by 120 months = per month instalment of $925.30.

So if they do not rein in the credit companies, people will get used cars even if interest rates are higher. Hope my estimated calculations are correct. Even though they paid more for 10 yrs tenure, they can still drive a car for $925 per month. They will not think of the losses they will incurred if they surrender before the 10 yrs are up.


one must be aware of the dangers of taking a 10 year loan.....

yes to lesser loan repayment but u better make sure u dun change car within 7-8 years hor....
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TDO
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 5:11 pm

"@TDO, please note that credit companies do not fall into the new policy and these companies can extend loans without down payment and it can stretch beyond 5 years."

Oh my, bro nutty88, that means this credit firms are legal Ah Long san. Damned!


"So if they do not rein in the credit companies, people will get used cars even if interest rates are higher. Hope my estimated calculations are correct. Even though they paid more for 10 yrs tenure, they can still drive a car for $925 per month. They will not think of the losses they will incurred if they surrender before the 10 yrs are up."

Hi David, I am wondering if it will be easy to rein them in? Are these credit companies able to offer personal loans as well. Or will they accept something of value to as a collateral for the loan. Like Ah Long san, from my understanding from somewhere that they even make the person buy insurance as a collateral. Not sure if it's true.
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 5:55 pm

Tituman wrote:


Now take a 2nd hand car priced at $80,000, interest at 3.88% X 10 yrs loan = $111,040 divided by 120 months = per month instalment of $925.30.

I think there is a calculation error here.
2nd hand car still have 10yrs? So this 1st owner sell the car on the next day of purchase?

From what i have heard, a number of resale car dealers are not taking in cars already. They just want to dispose what they have on hand...
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 6:34 pm

yob_ha wrote:
Tituman wrote:


Now take a 2nd hand car priced at $80,000, interest at 3.88% X 10 yrs loan = $111,040 divided by 120 months = per month instalment of $925.30.

I think there is a calculation error here.
2nd hand car still have 10yrs? So this 1st owner sell the car on the next day of purchase?

From what i have heard, a number of resale car dealers are not taking in cars already. They just want to dispose what they have on hand...

Sorry my mistake, Was taking a 10 yrs tenure for example. even 8 yrs still much much lower than a brand new one. An 8 yrs loan will have a monthly instalment of $1092. Still less than half of a 5 yrs loan shown above.
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Mon Mar 04, 2013 8:58 pm

There could be a economy down turn, government is preventing people running into debts, as now many things is paying by instalment, house, car, renovation, even electrical appliances can pay by instalment, do you realise when you draw your pay, maybe half of it or more goes to repaying instalment. High COE might not be the best way to kerb car population, but is working significantly well, my car also left 3 years and 8 months to go, by than, maybe I will have to ride a motorbike and carry my golf bag.. So government is telling us no hard cash don't buy car, take public transport, sigh so sad.
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Tue Mar 05, 2013 8:13 am

Suzuki wrote:
There could be a economy down turn, government is preventing people running into debts, as now many things is paying by instalment, house, car, renovation, even electrical appliances can pay by instalment, do you realise when you draw your pay, maybe half of it or more goes to repaying instalment. High COE might not be the best way to kerb car population, but is working significantly well, my car also left 3 years and 8 months to go, by than, maybe I will have to ride a motorbike and carry my golf bag.. So government is telling us no hard cash don't buy car, take public transport, sigh so sad.

Hallmarks of a good government. White Flag
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nutty88
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Tue Mar 05, 2013 8:29 am

@titu, we need to do a apple-to-apple comparison between new and used car.

Assuming one is considering to buy a Camry for example. New car is 180k and 2-yr used is 120k.

Loan calculation as follows based on a 5-year tenure: -

NEW - 180k

Downpayment 50% - 90k
Loan - 90k
Monthly instalment @ 1.88% - 1,641

USED - 120k

Scenario 1
Downpayment - 0
Loan - 120k
Monthly instalment @ 3.88% - 2,388

Scenario 2
Downpayment - 30k
Loan - 90k
Monthly instalment @ 3.88% - 1,791

Based on scenario 2, the monthly instalment is $150 more or 9k for a 5-year loan.

With this change, a lot of used car dealers are not buying in cars and they are in the midst of dumping their existing stock. So there is negative impact to a lot of the dealers who are in the SMB sector.
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Tue Mar 05, 2013 9:05 am

nutty88 wrote:
@titu, we need to do a apple-to-apple comparison between new and used car.

Assuming one is considering to buy a Camry for example. New car is 180k and 2-yr used is 120k.

Loan calculation as follows based on a 5-year tenure: -

NEW - 180k

Downpayment 50% - 90k
Loan - 90k
Monthly instalment @ 1.88% - 1,641

USED - 120k

Scenario 1
Downpayment - 0
Loan - 120k
Monthly instalment @ 3.88% - 2,388

Scenario 2
Downpayment - 30k
Loan - 90k
Monthly instalment @ 3.88% - 1,791

Based on scenario 2, the monthly instalment is $150 more or 9k for a 5-year loan.

With this change, a lot of used car dealers are not buying in cars and they are in the midst of dumping their existing stock. So there is negative impact to a lot of the dealers who are in the SMB sector.


dun u think its a good time to visit the nearest used car dealer....
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PostSubject: Re: Changes to Vehicle tax & loan conditions   Tue Mar 05, 2013 9:37 am

Just wondering how much do you guys think the COE will drop over the coming few months? And how long before the effect is fully priced in by the market.

While I agree that the larger downpayment and shorter loan period will sting, you can't disagree (apologies for the double negative) that it will slash demand and bring the prices of COEs down over time without the need to increase the number of COEs (and the corresponding worsening of traffic conditions).

Speaking personally, I would much rather pay 70k-80k for an Altis (optimistically assuming COEs drop that much) even with a 50% downpayment (which I will have to save up for) than 140k with a 5% downpayment.

If you think about it, is there a better alternative solution to shift the demand curve downward? If you have ever lived in cities like Bangkok, KL or Jakarta, you will know that increasing supply to achieve affordability is not sustainable, especially since there is a limit as to how much infrastucture can be increased or improved.

If we were to look at each policy on its own merit (and not consider the Govt's overall performance in every socio-economic area), my personal assessment is that this policy has more positives than negatives, even when viewed from the perspective of Singaporeans who are not from the upper income brackets.

just my personal views .... Peace




and before I forget ...

*HAMMER* *HAMMER* *HAMMER*

I am a WP supporter (but unfortunately they did not contest in my area and I have been struck off the elections register for being audacious enough to plan a holiday 2 months before the presidential elections were announced and writing in to the elections dept BEFORE the said election to inform them. Only to receive the response that I would be struck off anyways and that my only option would be to re-register after the election, regardless of my written communication that I wished to be reinstated, simply because I informed them in advance)


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