Every Singaporean knows this: a car in Singapore is expensive. It’s unanimous and if you drive a car (without the PDVL label, that is), you either earn a lot or you’ve got rich parents.
And we all know the killer here is COE.
Recently, three pieces of news might just send some respite to aspiring car owners.
Firstly, COE has finally dropped to a 7-year low. CAT A COE, which is meant for smaller cars (i.e. up to 1,600 cc and 130bhp), is at $36,001. The last time we saw a number lower than that was in 2010.
Secondly, it is often speculated that there would be a drop in COE in 2016. In 2006, prices of COE drop, leading to many people buying affordable cars. With the ten-year expiry date, it is expected that people who used to be able to afford a car can no longer afford it now—therefore leading to a drop in COE prices. Also, before 2008, the number of COEs available is much higher than it is today.
To cut long story short, 2016 should be the year when COE drop.
But it didn’t because something happened in Singapore.
Uber and Grab appeared out of thin air and allegedly bought many cars in 2016 and 2017. COE prices are primarily impacted by market forces: with more demand, the prices would increase.
While this is all pure speculation, analysts do believe that the latest plunge in COE could be attributed to them not buying new cars for their rental fleet.
And thirdly, it is alleged that the Uber car rental firm is also trying to sell off some of their cars due to the lack of drivers.
Here’s why it’s actually good news for aspiring car owners: the supply isn’t just increasing for new cars (COE). It’s also increasing in the second-hand car market (“dumping” of rental cars).
Even a person who has not studied economics would know that when supply is high, prices will drop.
So, what’s in it for aspiring car owners—especially those who are on the fence?
The days when you can finally see prices of cars dropping to a, at least reasonable, amount is finally here.
The last we check, the price of a Toyota Altis just dropped by $10,000.
After almost 10 years of bad news regarding car ownership, we finally see light at the end of the tunnel.
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This article was first published on goodyfeed.com
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