COE Analysis

victorp · June 22, 2016

This is my first post on this forum so pardon me if I break any rules.

I had been following the COE (cat D) for the recent 1 year and after following multiple emails with LTA, I believe the cause for the high COE is due to the dealer being able to bid the COE.

I enquired with LTA and received an email from them on 9th June 2015 with the following statement:

Bidding for these COE categories must be made in the name of the buyer. Once the COE is obtained, the vehicle has to be registered in the name of the bidder. Therefore, there must be a genuine buyer behind each bid, and the dealers cannot bid for a COE without a buyer and hope to subsequently re-sell the COE to profit from it.

I thus replied with information of my bike. I was issued a COE that the dealer bid 3 month before I purchased my bike. Given their statement, I could only think that the dealer is able to foresee that I will walk into their shop and buy from them, thus they bid a COE on my behalf 3 month before. But they replied on 14th September 2015, after multiple chaser, with the following statement:

With regards to your COE query, a COE can only be bidded in the name of the buyer. LTA does not however restrict the subsequent transfer of ownership. For motorcycles, it is a common practice that dealers register the ownership under their name and then transfer the ownership to the new buyer.

We all know that to own a vehicle, we need the COE. What is stopping the dealer to bid high for the COE when they bear no cost as that will be paid by us, the rider.

I understand that some rider here will be asking why do I think that the dealer will bid such a high price for COE? So let me explain why I thought so.

- Firstly, every dealer/bike shop can have the physical bike, but only the shop that has the COE can sell those bike. COE for bike can be used for all cc, from your scooter to your harley so this COE (cat D) is very versatile. This encourage the dealer to bid for a lot of COE so that they can proceed with the sales.

- Secondly, if you look at the information LTA provided (transparent system), the bid amount distribution varies with huge differences. Search for the information here, Distribution of Successful Bids, and you will be surprised. People are actually bidding >40% of the QP. Do let me know with your replies here that you will bid with an amount of $10k and more for the COE as I don't know of any rider who would does that. BUT!!! The dealer will, as there will always be riders needing a ride and do they have a choice when LTA release the COE bidding result and the dealer just tell you "bo bian".

I know that it is easy for the dealer to do everything for us. And also the joy of getting a new bike within a few days after signing the paper. But we need to wake up as this is really bad for people who need the bike in their course of work. The solution is simple, only allow the dealer to bid with a actual buyer or disallow transfer of the COE for the first 3 month.

Although I can profit from selling my bike, amazing that I can sell my bike now for the same price I paid for it 4 years back, I would rather everyone who wish to ride be able to do so.

simeone82 · June 23, 2016

Hi, I was also following the COE trend this few months. Always last 1 or 2 mins, suddenly got as much as 50 bidders get in and causes the COE to shoot up..Yesterday as much as 70 bidders at last min get in and COE becomes $6300...If only COE is not transferrable, then I believe it will goes down. When I went to mah motor to view RS4 125 they had so many COEs on hand to offer me that I can get my bike by 2 to 3 working days....So I am not surprised that everyone, dealer etc with the kiasu mentality chiong in to bid the COEs..Well market trend so just have follow.. good for those that sold their bike for profit but then if buy another bike also it wont be cheap...

victorp · June 23, 2016

Bro simeone82, you are right about the last min surge in the COE price. I personally saw that almost every time and across all COE Category. I believe this is a tactics to stop normal people from coming into the bid and push them off. They are mostly cash rich and COE is also as good as cash, always got people needing it.

I will bid for my own COE from now on, do not get from the shop no matter how they persuade you (unless they give you a huge discount). Lets all do our part in making the riding community alive again.

Orleng · June 23, 2016

http://www.singaporebikes.com/forums/showthread.php/413694-Current-COE-system-hurts-motorcyclists-too?p=8358015&viewfull=1#post8358015

low opportunity cost for dealers. They stand to lose $200. One sales, the interest they stand to earn on the current COE alone *let's assume the rest of the bike is paid for in cash, and that the COE is $6k, with interest at 4%, that's already $240. Even with 50% COE utilisation, under such unlikely scenarios, the dealer is not going to lose any money by bidding for more than he can use. So why not bid?

Like everyone has said, only way to remove the last min sky-high rush would be to take dealers out of the equation, but that will not happen.

Edited June 23, 2016 by Orleng

duo · June 24, 2016

Looks like a template answer given by LTA. But then again whats new? You can try bidding for your own COE. However unless you have a gigantic stack of cash then I highly doubt you will get any. What you are persuading others to do is to bid for themselves. Good idea but then again the bikeshop can just not sell you the bike. So back to square one.

Edited June 24, 2016 by duo

simeone82 · June 24, 2016

I think it good to try to bid for own COE especially when is like $1 dollars then try $100 or something. Yes even if for example you successful bidded for a $1 dollar COE, the dealer can say oh own COE have to top up how much etc.. No loan need top up how much etc..Bike shop wins in the end.

Orleng · June 24, 2016

Y'know. Since it costs only $200 to bid for a coe, as a group, we can mess with the shops. Since they're usually the ones with large volumes of coe.

Whole load of riders bid 10k, raise the coe, then no one uses it. We each lose $200, but can leave the shops holding expensive coe for 6mths.

If they don't utilise, it will be recycled back into the next quarter's coe allocation, potentially dropping prices for that 1 bidding cycle.

Just a theory.

Of course if the shops know when the large bunch of unused coe will be recycled, they could make more bids and keep the prices inflated.

duo · June 24, 2016

Y'know. Since it costs only $200 to bid for a coe, as a group, we can mess with the shops. Since they're usually the ones with large volumes of coe.

Whole load of riders bid 10k, raise the coe, then no one uses it. We each lose $200, but can leave the shops holding expensive coe for 6mths.

If they don't utilise, it will be recycled back into the next quarter's coe allocation, potentially dropping prices for that 1 bidding cycle.

Just a theory.

Of course if the shops know when the large bunch of unused coe will be recycled, they could make more bids and keep the prices inflated.

Might work but then again shops can just offer longer instalment plans and people will still buy no matter what the price is. They simply drag the instalment longer and make it 'affordable'.

Edited June 24, 2016 by duo

hachi · June 24, 2016

I advocate the self bidding COE, in fact it only takes 5 mins or less to do it via the ATM.

Using dealer's account, you can throw 50-100 bids at a time unlike individual self bid.

In this case, the system is skew towards dealers not individual buyer like myself.

It is always the last 1-20 mins where all bids come in.

stsoh · June 24, 2016

.......
It is always the last 1-20 mins where all bids come in.

as u say, the coe system have been rigged, set to skew high, its no longer a fair system.

did all forgot tat once the cat A or B coe hit S$5k? when it was >S$70k.

for tat month, garmen lost of 1 billion income, guess whom(mbt) was replaced.

it the same thing in ebay bids, at the end, bid price will sudden shot up.....

ps;

look at bike population in sillypore, b4 2010 if coe for bikes r consumed (tat means new bikes) it will increase bike population by 2% annually but not growth, strange?

after 2010, growth suppose to be 1%. no growth but further shrinkage, many scrapped their bikes due to high coe.

compare to coe cat A/B, growth of 5% steadily, have triple car population since 2000.

Edited June 24, 2016 by stsoh

Orleng · June 25, 2016

as u say, the coe system have been rigged, set to skew high, its no longer a fair system.
did all forgot tat once the cat A or B coe hit S$5k? when it was >S$70k.
for tat month, garmen lost of 1 billion income, guess whom(mbt) was replaced.
it the same thing in ebay bids, at the end, bid price will sudden shot up.....

ps;
look at bike population in sillypore, b4 2010 if coe for bikes r consumed (tat means new bikes) it will increase bike population by 2% annually but not growth, strange?
after 2010, growth suppose to be 1%. no growth but further shrinkage, many scrapped their bikes due to high coe.

compare to coe cat A/B, growth of 5% steadily, have triple car population since 2000.

Not strange. It's the system and simple math.

http://www.singaporebikes.com/forums/showthread.php/413694-Current-COE-system-hurts-motorcyclists-too?p=8358082&viewfull=1#post8358082

The biggest problem with the motorcycle COE supply chain is simply this.

Factored growth is set at 0.25%.

10% (as of now) of deregistered motorcycle (and all other categories) is transferred to Cat E (Open Cat)

http://www.lta.gov.sg/content/dam/ltaweb/corp/PublicationsResearch/files/FactsandFigures/COEQuotaAllocationRV.pdf

looking at the latest VQS. 90 "Growth COE" for Cat D.

2258 Motorcycles scrapped from Apr - June

225 Of those COEs go to Cat E

2033 Replacement Cat D COE available.

6 Expired Unusued COEs Apr-Jun (those unused COEs forfeited)

2258 (deregistered in apr-jun) - 225 + 90 + 6 = 2129 available COE available from Jul-Oct.

2258 - 2129 = 129 less motorcycles. And this is for the 3mth period.

There were 144,467 motorcycles on the road last year. at 0.25% growth. that's 361 "New COE" in total for this year. Whilst we lost 10% of our deregistered to Cat E.

It's not due to traffic congestion. It's basically, the 10% of Cat D deregistered COEs going to Cat E. It is going to be perpetual negative growth. Will never increase ever again. The replacement rate is lower than the % rate going to Cat E.

Why motorcycle COE going to Cat E? It just creates more congestion. At the same time, it generates more money. And rids Singapore of motorcycles.

I am a rider, I don't like it either, but, Ownself Check Ownself.

Edited June 25, 2016 by Orleng

Orleng · June 25, 2016

Let's just do some more simple sums.

For example, the 225 COEs that went to CAT E, let's take the current Cat E COE pricing of $57,390 minus current Cat D COE $6,303.

($57 390 - $6 303) * 225 = $11 494 575. Per quarter. Let's take a conservative estimate of $10mil per quarter. Under the current system, using this simplified example, the govt is making $40M a year. As compared to if they returned all COE back to Cat

This is not factoring in the Cat D "Annual Growth".

victorp · June 25, 2016

When the shop indicate the machine price, that is the price they are selling and they should not inflat the price if we are not getting COE from them. If they do so, that will be against the law where they proved that they are profiting from bidding the COE and this gives me a very good proposition to bring this up to whoever will listen. My email to LTA can't prove that the shop is jacking up the COE price, thus if I can get a quotation from the shop that there are dual pricing for those buying with COE and for those without, we will be able to stop these "bidding under dealers" rules.

But I don't think they will be selling with dual price as that will fall under price discrimination which is against the law. So all I'm asking is for all those who wants to buy a bike to bid their own COE. Let the shop lock their cash on those COE they bid. We should be paying the same price as what the shop offers as we are all paying for the same COE, and this is a small move from us to stop this ridiculous COE pricing.

Deposit is only $200 and from what I read, this $200 goes to paying the COE as well. Bid a price you are comfortable with as I can't fix an amt for everyone to bid, that will be market manipulation. What I'm suggesting here is a change in our way of buying. Yes, we will have to wait longer before we get to ride the bike, but I personally feel that it's worth it.

duo · June 25, 2016

When the shop indicate the machine price, that is the price they are selling and they should not inflat the price if we are not getting COE from them. If they do so, that will be against the law where they proved that they are profiting from bidding the COE and this gives me a very good proposition to bring this up to whoever will listen. My email to LTA can't prove that the shop is jacking up the COE price, thus if I can get a quotation from the shop that there are dual pricing for those buying with COE and for those without, we will be able to stop these "bidding under dealers" rules.

But I don't think they will be selling with dual price as that will fall under price discrimination which is against the law. So all I'm asking is for all those who wants to buy a bike to bid their own COE. Let the shop lock their cash on those COE they bid. We should be paying the same price as what the shop offers as we are all paying for the same COE, and this is a small move from us to stop this ridiculous COE pricing.

Deposit is only $200 and from what I read, this $200 goes to paying the COE as well. Bid a price you are comfortable with as I can't fix an amt for everyone to bid, that will be market manipulation. What I'm suggesting here is a change in our way of buying. Yes, we will have to wait longer before we get to ride the bike, but I personally feel that it's worth it.

Will it be against any law if the shop refuse to sell the bike to you using your own COE?

Orleng · June 25, 2016

When the shop indicate the machine price, that is the price they are selling and they should not inflat the price if we are not getting COE from them. If they do so, that will be against the law where they proved that they are profiting from bidding the COE and this gives me a very good proposition to bring this up to whoever will listen. My email to LTA can't prove that the shop is jacking up the COE price, thus if I can get a quotation from the shop that there are dual pricing for those buying with COE and for those without, we will be able to stop these "bidding under dealers" rules.

But I don't think they will be selling with dual price as that will fall under price discrimination which is against the law. So all I'm asking is for all those who wants to buy a bike to bid their own COE. Let the shop lock their cash on those COE they bid. We should be paying the same price as what the shop offers as we are all paying for the same COE, and this is a small move from us to stop this ridiculous COE pricing.

Deposit is only $200 and from what I read, this $200 goes to paying the COE as well. Bid a price you are comfortable with as I can't fix an amt for everyone to bid, that will be market manipulation. What I'm suggesting here is a change in our way of buying. Yes, we will have to wait longer before we get to ride the bike, but I personally feel that it's worth it.

Will it be against any law if the shop refuse to sell the bike to you using your own COE?

Exactly. Nothing to stop the shop from charging "Administrative" or "Paperwork processing" fees.

Also, they could just state that the price you are getting if you have the bid for the COE is a "Discounted" price. If you supply your own coe, discount does not apply.

victorp · June 25, 2016

Exactly. Nothing to stop the shop from charging "Administrative" or "Paperwork processing" fees.

Also, they could just state that the price you are getting if you have the bid for the COE is a "Discounted" price. If you supply your own coe, discount does not apply.

If they were to do that, make sure we record the conversation. This is a very good point for us to prove a point that the shop profit from bidding the COE. All fee that should be charged must be the same disregarding the fact that whoever bid the COE. Don't see the point where they charge an administrative fee when we are doing the job of bidding the COE.

But having said so, if they were to give you a discounted price for taking their COE, please take it!! Do your homework, compare the machine price. They might be clearing their COE when giving discount thus it will be a good deal.

Do note that COE need to be transferred within 3 month. Correct me if I'm wrong.

Orleng · June 26, 2016

If they were to do that, make sure we record the conversation. This is a very good point for us to prove a point that the shop profit from bidding the COE. All fee that should be charged must be the same disregarding the fact that whoever bid the COE. Don't see the point where they charge an administrative fee when we are doing the job of bidding the COE.

But having said so, if they were to give you a discounted price for taking their COE, please take it!! Do your homework, compare the machine price. They might be clearing their COE when giving discount thus it will be a good deal.

Do note that COE need to be transferred within 3 month. Correct me if I'm wrong.

A,B,D 6months. C,E 3months.

"Administrative" for processing the registration of vehicle and submission of documents etc. They can always claim these fees are "waived" for direct purchases whereby they supply an already registered vehicle (COE applied).

The "discount" would be their "normal price" whereas the inflated price quoted if you utilise your own COE is the "normal" price.

They have the rights to offer you a discount or offer to waive paperwork fees.

If what you are saying is true, then we should go after all F&B establishments that charge corkage.

That aside, I'm pretty sure there are riders who have indeed bid for and obtained coe on their own. As I recall seeing some ads for bike sales stating that it's "0" transfers done before.

Whether the shop wants to sell you the vehicle if you have your own COE, is entirely up to them. They're not compelled to do so.

simeone82 · June 27, 2016

Sometimes we can't help but to just follow the market trend. Consumer are always on the losing ends regardless of what goods or products. For example food and drinks, increase in price in wholesaler, your nearby hawker or chai fan stall will take the chance to increase as well citing rising costs. Public transport, transport will raise cost citing raising COES, or number of years never raise prices so must raise.

Yeah bike shop or dealer always like to charge what admin fees. Of course you can walk away from the deal but for how long you are ok without the bike or car that you wanted? number of months, or years?

di_andrei · June 27, 2016

While I agree that dealers have no incentive to bid low, since they just transfer the cost to the buyer, the responsibility is still with us, the buyers, who choose to pay for it.

What I find a lot more upsetting is the transfer from CAT D to CAT E COE - how can the LTA justify transferring the COE from deregistered bikes to the "Open" category? The result is an increase in the number of cars, and a decrease in the number of bikes on the road.

duo · June 27, 2016

While I agree that dealers have no incentive to bid low, since they just transfer the cost to the buyer, the responsibility is still with us, the buyers, who choose to pay for it.

What I find a lot more upsetting is the transfer from CAT D to CAT E COE - how can the LTA justify transferring the COE from deregistered bikes to the "Open" category? The result is an increase in the number of cars, and a decrease in the number of bikes on the road.

Perhaps just perhaps that was their objective. So more cars on the road = country is successful = the citizens are wealthy. As we all know majority of the people still thinks riding a bike is for the poor. So if more bikes on the road it will give the opposite image. Also there is still the thinking that successful = owning a car. Also to suck more from the citizens.

victorp · June 27, 2016

"Administrative" for processing the registration of vehicle and submission of documents etc. They can always claim these fees are "waived" for direct purchases whereby they supply an already registered vehicle (COE applied).

The "discount" would be their "normal price" whereas the inflated price quoted if you utilise your own COE is the "normal" price.

They have the rights to offer you a discount or offer to waive paperwork fees.

Yes, they have the rights to do so and even the right to not sell you the vehicle. What I'm trying to say is if they did as what you said, then this is a very good point to prove that they are profiting from bidding the COE. Else I don't see the point of charging extra when we use the COE we bid ourselves. Corkage is charged because the restaurant profit from the beverages they sell, but they will lose out on that profit if you bring yours.

Just need a kind soul, who is buying a bike now, and had successfully bid a COE to give me all these evidence. I will do my best to follow up with the email to LTA and going to MP. What we can do is let all riders believe that it is possible to bid our own COE and still buy the bike at machine price instead of making everyone here think that there is no way out but just pay up.

Like what bro hachi said, bidding only takes 5 min via ATM and he too encourage bidding the COE ourselves.

Let's work towards that and solve the problem instead of making everyone believe that it is impossible.

Bro Orleng, not trying to go against you but just trying my best to change the system. A little too much to ask for so need everyone's help here. Take a look at the next bidding especially the last 20 min and tell me if I'm the only poor guy where everyone else start their bid 5k and above or something is really wrong here.

What I find a lot more upsetting is the transfer from CAT D to CAT E COE - how can the LTA justify transferring the COE from deregistered bikes to the "Open" category? The result is an increase in the number of cars, and a decrease in the number of bikes on the road.

Actually a percentage of all category when de-register their vehicle will be transferred to CAT E, not just CAT D. But think the government just want $$. Transfer a CAT D COE to CAT E = 60k more profit as compared to just from CAT A to CAT E where they only earn like 20k more.

Yahmarhuh · June 27, 2016

Y'know. Since it costs only $200 to bid for a coe, as a group, we can mess with the shops. Since they're usually the ones with large volumes of coe.

Whole load of riders bid 10k, raise the coe, then no one uses it. We each lose $200, but can leave the shops holding expensive coe for 6mths.

If they don't utilise, it will be recycled back into the next quarter's coe allocation, potentially dropping prices for that 1 bidding cycle.

Just a theory.

Of course if the shops know when the large bunch of unused coe will be recycled, they could make more bids and keep the prices inflated.

So u mean only $200 is deducted when u make a bidding? If so, I'm on board but let's find sufficient ppl 1st. I suggest to bid $20K. Shall we target the bidding closest to national day?

victorp · June 27, 2016

So u mean only $200 is deducted when u make a bidding? If so, I'm on board but let's find sufficient ppl 1st. I suggest to bid $20K. Shall we target the bidding closest to national day?

Bro, we will need at least 500 riders with $200 to blow for this to work. The shop will just tell those buyer to wait for the next bidding exercise. And if some fellow riders really need a ride fast, this will be damaging to them.

But then again, this will be headline news if we managed to pull this through. Hahahaha

Orleng · June 27, 2016

Yes, they have the rights to do so and even the right to not sell you the vehicle. What I'm trying to say is if they did as what you said, then this is a very good point to prove that they are profiting from bidding the COE. Else I don't see the point of charging extra when we use the COE we bid ourselves. Corkage is charged because the restaurant profit from the beverages they sell, but they will lose out on that profit if you bring yours.

Just need a kind soul, who is buying a bike now, and had successfully bid a COE to give me all these evidence. I will do my best to follow up with the email to LTA and going to MP. What we can do is let all riders believe that it is possible to bid our own COE and still buy the bike at machine price instead of making everyone here think that there is no way out but just pay up.

Like what bro hachi said, bidding only takes 5 min via ATM and he too encourage bidding the COE ourselves.

Let's work towards that and solve the problem instead of making everyone believe that it is impossible.

Bro Orleng, not trying to go against you but just trying my best to change the system. A little too much to ask for so need everyone's help here. Take a look at the next bidding especially the last 20 min and tell me if I'm the only poor guy where everyone else start their bid 5k and above or something is really wrong here.

Actually a percentage of all category when de-register their vehicle will be transferred to CAT E, not just CAT D. But think the government just want $$. Transfer a CAT D COE to CAT E = 60k more profit as compared to just from CAT A to CAT E where they only earn like 20k more.

They charge a different price because the shop profits from interest charged on the COE (assuming one takes a loan), but they will lose out on that profit if you bring yours. It would be hard pressed to justify that the "administrative charges" is tantamount to pricing discrimination, or rather to quantify that it is so. Unless there is an industry standard rate for such services rendered. Likewise, you can't go after say an electronics goods retailer that offers you a discounted price for taking up their instalment scheme. Yes, they are profiting from bidding for the COE, as do many car sales agencies. Is it illegal? Doubt so.

The idea is sound, that everyone bids for their own COE. If I were buying a bike, I definitely would. Just saying that if I then approached a shop and they charged me additional administrative fees, or are unable to offer me a "discounted" price, or tell me that their stocks are booked for customers using their services/admin to sort out COE. We could be at a loss if that's the case.

In the car sector, people would have tried the same before.

The shops are bidding at the last hour, everyone knows that. Fact is that most riders will not be paying cash up front, so they will need finance companies to step in with the loans. These companies are likely to have a vested interest in ensuring that the COEs remain high as well so that they can benefit from the interest charged. If not the bike shop, the finance companies will bid or find a way to encourage the bike shops to bid.

These finance companies can always reject your loan application if not applied by a shop. The shop that sells you the bike. Said shop may charge you more for registering the COE in your name, then transferring to them, to enable a loan be worked out with the finance companies.

So, unless everyone starts paying their bike in full cash, we're going to have to accept the fact that the COEs will remain inflated. The only way it will go down is if people collectively stop buying bikes for 6 months or more to dump losses onto the bike shops holding TCOE.

kifakw · June 27, 2016

yes, you are losing $200 if you allow the COE to be expired and lapse. have you given a thought that you might in fact be pushing the COE price up? If the shop bidded for $6,000 and with your $20,000. you pushed the COE price up to $19,XXX? when the COE hits the roof by then, COE true market value is way above market. from $19,000 maybe take 10 years to come down to $6,000?

you have to understand that your bidded COE can be unused and unregistered, so does the shop bidded COE can be unused and unregistered.

ultimately the shop has cash to play with the system, consumer do not have. the COE system is smart yet screwed and unfair at the same time.

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