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  • Mellanie Hewlitt
    Latest article by See Leong Kit nicely compliments our previous articles on The Great COE Scam and the NEL Fiasco . To: Editor,Singapore Review From: Mr See
    Message 1 of 1 , Feb 28, 2004
      Latest article by See Leong Kit nicely compliments our previous articles
      on "The Great COE Scam" and the "NEL Fiasco".

      To: Editor,Singapore Review
      From: Mr See Leong Kit
      Date: Sat, 28 Feb 2004 21:59:54 +0800 (CST)
      by See Leong Kit

      We all need a sense of humour to survive in
      stressful Singapore. The woes of North-east MRT/bus
      commuters have been publicised. Here is a
      half-humorous thesis on the unpublicised woes of
      Singapore motorists --- the most persecuted people
      since the Holocaust.

      For Singaporeans living in the eastern part and
      having to work in Jurong, a car is often a necessity
      and not a luxury item.

      However, under our one-of-a-kind COE system, a
      car which cost $15,000 to import ends up costing a
      whopping $90,000! It is a money-making machine,
      raking in some $200 million every month. What will
      they think of next --- tax Singaporeans on the amount
      of oxygen they breathe?

      No wonder COE sounds aptly like "See Hor Yee"
      which is Hokkien for "die standing paying-and-paying
      monies to you-know-who". Who is you-know-who, lah?
      Our beloved Government, lor!

      After the lumpsum COE payment, the motorist next
      has to pay recurring ERP charges. Like 3-year old
      kids, we were told that ERP is not a tax but a
      "traffic management tool". With apologies to
      Shakespeare, a skunk by any other name smells just as
      bad! With apologies to Jack Neo, We, Singaporeans,
      Not Stupid! We all know ERP is Every Road Pay
      (polite version) or Everyday Rob People (rude

      With apologies to Churchill, never in the
      history of mankind has so many motorists been milked
      for so much monies over so many years!

      Thanks to our "world-class" COE system, we have
      to pay "like hell" to own a car. Otherwise, thanks
      to our "world-class" public transportation system,
      we have to tolerate "like hell" the sardine-packed
      buses and MRT trains. The Singlish version is "In
      Singapore, got car can die. No car, also die."

      So every Sunday, I pray to our Heavenly Father
      to forgive our public officials for they know not what
      they do. I also pray the day will never come when
      Singaporeans are required to "bid" for a certificate
      of "entitlement" to speak up, to get married, to have
      children, to buy a HDB flat and what-have-you. This
      I humbly ask in the acronyms of PAP, PIE and PQP(in
      alphabetical order). Now and forever. Amen!


      Subject: Comments - The Great COE Scam

      Government places upward pressure on COE prices...

      Date: Wed, 14 Jan 2004 08:40:25 -0000
      From: "chi_kin_sheet"
      To: Sg_Review@yahoogroups.com
      Subject: Re: The Great COE Scam

      To add oil into the burning fire, there is actually evidence that the
      Singapore Government has been under-issuing COE for at least the last
      4 years to the tune of 45000 COEs in total!

      1. Goto http://www.lta.gov.sg/motoring_matters/motoring_vo_facts.htm

      2. Open up the "Quota Allocation" files (all 4 of them).

      3. Let's start with the first file "COEc Quota Allocation 2001.PDF"

      4. The total vehicle population is 670418 as at 31/12/1999. Net
      increase allowed is 3% of that, or 20113. So we should expect to see
      670418+20113 = 690631 vehicle at the end of 31/12/2000 right?

      5. Take a look at the second file "COE_Quota_Allocation_2002.PDF"

      6. Oops! The total vehicle population is only 673851; that is a
      shortfall of 16680.

      7. Repeat the same process for the rest of the files to convince
      yourself that shortfall is repeated year after year.

      Projected population vs actual population

      Using 31/12/1999 as the baseline, we should have 670418 * 1.03 * 1.03
      * 1.03 = 732584 by 31/12/2002

      Instead, we have 687648. (From "COE_Quota_Allocation_2004.PDF")

      That is a shortfall of 44936 COEs issued over a 3 year period.

      Unfortunately, we don't have the figures for vehicle population by
      31/12/2003 yet. Else, it will make the gap even bigger!

      What the Government said

      1) The number of COEs will be increased at the rate of 3% to cater
      to the demand by aspiring car owners.

      2) The price of COEs will be set duly by the market. The Government
      will play no part in it, other than setting the quota for the COE.
      I.e. the Government will determine the supply and the market will
      determine the price. (Even here, the logic is questionable as price
      and supply
      are inextricably linked)

      3) The Government did not create COE for revenue purposes but for
      controlling of car population growth.

      The reality

      1) The number of COE has been growing at far less than 3%.

      2) Following from (1), the Government has been interfering with the
      COE market by reducing the supply of COE deliberately. Contrary to
      what it said, the Government has been actively influencing the price
      of COEs!

      3) I can think of no other reasons for the Government to interfere
      in the COE prices, other than to prop up its revenue source. Can you?

      Think about it ....


      From: ConcernedReader@...
      Date: Tue Jan 13, 2004 12:00 am
      Subject: The Great COE Scam

      We circulate below letter from Concerned Reader.

      To: Sg_Review-owner@yahoogroups.com
      CC: mellaniehewlitt@...
      From: Concerned Reader
      Date: Tue, 13 Jan 2004 12:51:06 +0800

      Dear Sir

      You have the knack for stating the obvious. It is no secret that the
      official reason used to impose COEs (i.e. to restrict traffic and control
      congestion) is bogus. Any person can come up with 10 different schemes of rationing cars on roads without imposing sky-high COEs.

      Indeed, the entire world is aware that the ONLY reason for existence
      of the COEs is to get revenue from car owners.

      What is less obvious is the huge amount of money that goes into the
      government coffers every year. Taking the below statistics from the Shitty Times as a rough yardstick, if 82,000 cars per year were prematurely retired,
      there will be new replacement COEs of equivalent number.

      At an average rate of SGD23,000/- per COE, 82,000 COEs will bring in
      an estimated SGD1.886 billion per year. This is in addition to the daily
      ERP and road tax rates that the government imposes. Let me put this figure in
      proper perspective; SGD1.886 billion is;

      1) SGD1,886,000,000; or
      2) One Thousand Eight Hundred and Eighty-Six Million Sing Dollars.

      And no one has a clue what happens to this humongous sum.

      Where does it all go?

      How is it utilised?

      Does the LTA spend SGD2 billion a year upgrading roads?

      Please do not tell me that the money went into the half-baked half f%$
      %#@ piece of contraption that is the NEL. That's another joke of the year.

      Its clears as daylight that Singaporeans are taken for a very
      expensive ride. And the even more amusing fact is that no one even raises this as an issue to be addressed. People still flock to buy cars by the hundreds!!! Call it herd mentality (or monkey see monkey do).

      Given that a car tops the list (after a house) as the biggest ticket
      item on the average Singaporeans lists of expenses, this also says alot about
      the apathy permeating Singapore's less then inquiring populace. But then
      again, this is Singapore......

      Just my two cents worth.

      From a "Concerned Reader"

      Below are extracts from "Singapore National Education Part 68" which
      illuminates the wonderful Singapore COE system in practise.


      "9. That because of a freak $101 COE for the month of July, people
      are buying COEs to extend their 7 to 10 year old cars for another 10 years.
      Based on the three-month moving average of the COE, a person owning an 10 year old car can renew his car for about $18,000, instead of the usual $30,000+.

      But because of the present low COE prices compared to say, 2 years
      ago, and because of the poor market sentiment post-Sept 11, many Mercedes
      Benzes and Lexuses (Lexii?) bought with high COEs of the past are now being
      scrapped. This is because these big almost-new cars can fetch better values from
      deregistration (thus realising the rebates from the unused portions
      of the residual taxes) than from a second-hand sale.

      From the BT Motoring section:

      "According to the Land Transport Authority, 50,392 vehicles were
      deregistered in the first eight months of 2001, of which 32,508 were cars. Of
      these, 11,562 were big cars (above 1,600cc). The figures are already higher than several previous full-year numbers. And extrapolated over 12 months,
      scrappage is likely to hit 75,588 vehicles or 48,762 cars. Of these, 17,343 would be big cars."

      So, as a result of our wonderful COE system, ten-years-or-older cars
      with old emission engines are being kept on the road, while high-tech two-year-
      old luxury cars are being scrapped.

      Renew your old car, scrap your new one. Only in Singapore."


      To: Sg_Review@yahoogroups.com
      cc: ConcernedReader@...

      Subject: [Sg_Review] High Obsolesces Rates of Valuable Assets Lead To
      Wastage & Costs

      70 to 80 per cent of the 82,000 care that were deregistered last year
      are less than five years old, and more than 90 per cent are less than 10 years

      (Straits Times, 10 Jan 2003)

      A home and a car will top the list of big ticket expenses for most
      Singaporeans. And these same items have limited life-spans......

      From: Sg_Review@yahoogroups.com
      Fri Dec 12, 2003 4:28 am
      Subject: High Obsolesces Rates of Valuable Assets Lead To Wastage &

      Editors word:
      The obsolesces rate of valuable assets in Singapore is extremely
      high. Whilst it is conceivable that certain products like computers have short
      life spans due to rapid technological progress and changing consumer needs, it
      is quite another matter to find this unhealthy trend in "longer term" assets
      like a house or cars.

      A car that usually would cost only SGD30,000/- with an average life-
      span of 20-30 years is only given a shelf life of 10 years on paper (COE). In
      other developed countries, it is not unusual to see a 1965 Beetle (or cars
      older then 15 years of age) rumbling along the roads as these vehicles are still in perfectly good and road worthy condition and are testimony to the
      engineering feats of their makers.

      But in Singapore, the COE system effectively encourages owners to
      discard perfectly functional cars and replace these with newer models. Of
      cause the only beneficiaries are the government (who rake in the proceeds from
      new COE bids) and also car dealers.

      In reality, one never really owns a car in Singapore. One only
      acquires the right to lease the vehicle from the government for 10 years. And the icing on the cake is that car prices in Singapore are the highest in the
      world. A typical 1.6 liter Japanese car can cost SGD85,000/-. No two guesses
      needed on where the proceeds go.

      The same applies also to 99 year leasehold property and HDB flats. On
      maturity of these periods, "owners" have to fork out additional cash upfront
      to retain the right to the asset. This inefficient and highly expensive system
      has resulted in tremendous wastage and additional costs for the average
      Singaporean especially since housing and cars will be the 2 most expensive items for the average Singaporean.


      Straits Times
      12 Dec 2003

      Looking for a 5-year-old car? It'll be tough
      Cars registered during 'high COE' period 3 to 10 years ago are not
      economically viable, so they are scrapped or exported

      By Christopher Tan

      IF YOU are in the market for a used car, chances are that you'll only
      be able to find cars less than three years old - or over 10 years old.

      All ready for export, these second-hand cars will fetch dealers
      better prices abroad where demand is higher.
      Everything in between has either gone to the scrap yard or been

      A check with The Straits Times Classifieds section found that more
      than 70 per cent of used-car advertisements placed were for models
      registered between 2000 and this year, the bulk of them in 2001 or

      At the other end of the spectrum, there were ads for cars more than
      10 years old, but they were far fewer than those for 2000-2003


      ABOUT half of all cars here are less than four years old, according
      to the Land Transport Authority's vehicle population statistics,
      which is reflected in the age profile of used cars on sale.

      The data, updated in January every year, may reveal an even younger
      population when it is updated with this year's record sales of 80,000

      As of Dec 31 last year, 46 per cent of Singapore's 404,274 cars were
      less than three years old. Beyond that, the cohort shrinks with each
      passing year.

      Of cars less than 10 years old, those bought in 1997 form the
      smallest group. There were only 13,305 of them left, or 3.3 per cent
      of the entire car population.

      Bought with higher taxes and Certificates of Entitlement (COEs), the
      older cars were scrapped or exported to countries such as New
      Zealand, Cyprus and Thailand, because they could not fetch decent
      resale prices locally.

      But that's not the only reason for the trend.

      Until recent years, the number of COEs available used to be
      noticeably smaller. In 1997, for instance, there were only about
      2,500 for cars each month. In the current COE quota year, there have
      been more than 6,500 a month.

      The supply of COEs has increased largely because more vehicles are
      being scrapped or exported.

      Models in between, cars four to nine years old, were distinctly in
      the minority.

      Singapore Secondhand Motor Vehicle Dealers' Association committee
      member Jerry Low said the phenomenon has a simple explanation:

      Cars registered during years of 'high COE' - generally considered to
      be anything above $35,000 - were not economically viable here.

      'The simple fact is that if the annual depreciation for a used car is
      high, like $6,000 to $7,000, then you might as well buy a new car,'
      Mr Low said.

      Take the best-selling Toyota Corolla, for instance. A new 1.6-litre
      automatic is priced just above $70,000. After deducting its scrap
      rebate value in its 10th year, its annual cost - or depreciation -
      works out to be $6,000.

      A Corolla 1.6 registered in January 2001 and going for about $63,000
      will have a depreciation of $7,000.

      Certificate of Entitlement premiums have come down from between
      $40,000 and $60,000 to about $25,000 now, and new car prices have
      also fallen to 13-year lows because vehicular taxes such as the
      additional registration fee (ARF) and Customs duty have been cut in
      recent years.

      So, a brand new two-litre Nissan Cefiro goes for less than $110,000
      today. In 2000, it cost between $130,000 and $150,000.

      'The capital outlay for a new car has become lower since the change
      in financing rules,' said Mr Low.

      Most new cars are now sold with 90 to 95 per cent financing. Some
      dealers have also been advertising $1 down payments.

      The boon for the new car trade has been a bane to used-car dealers.

      Mr Thomas Teo of Valley Trading said monthly sales had fallen to '20-
      something' a month, half of the volume a few years ago.

      Business is very slow, he said, and he doesn't know when things will

      While buyers enjoy low prices for new cars, industry players reckon
      that these buyers will also have to wait far longer to sell the cars,
      because of the loans they took.

      Said one dealer: 'If they try to sell too early, they will not have
      enough to repay their outstanding loan.'

      Scrapping the car early to recover taxes - a trend in the past four
      years - would not be an option either.

      Last year, the Government changed the scrap rebate formula to make
      refunds less generous.

      Instead of 80 to 130 per cent of a car's open-market value, rebates
      are now 50 to 75 per cent of its ARF. For a car like the Nissan
      Sunny, the difference can be $5,000.


      82,000 cars taken off the road last year

      Straits Times
      10 Jan 2004
      By Christopher Tan

      AN ALL-TIME high of about 110,000 vehicles were deregistered last
      year. The number exceeded the expectations of both the Government and
      the motoring industry.

      Deregistered cars line Forward Motors' yard at Jalan Lam Huat in
      Kranji. Many of the record numbers scrapped are five years or less.
      Most of the vehicles taken off the road were cars, and relatively new
      ones at that.

      According to freshly released Land Transport Authority figures,
      82,126 cars were deregistered, up sharply from the previous record of
      66,997 in 2002.

      More than half the deregistered cars are believed to have been re-
      exported as used vehicles to other countries, such as New Zealand,
      Cyprus and Thailand. The rest went to the scrapyard.

      According to operators of export zones - the yards where deregistered
      cars are parked before being shipped out - re-exported cars are
      typically five years old or newer.

      'They're getting younger and younger,' said Mr Neo Nam Heng, a
      partner in leading car exporter Prime Leasing. He added that there
      are some 2002 models among the 1,000 or so cars in his yard.

      He estimates that '70 to 80 per cent' of his cars are less than five
      years old, and more than 90 per cent are less than 10 years old.

      Mr Lee Choon Khim, managing director of Forward Motors, which
      operates another vehicle-exporting zone, said '99.9 per cent' of the
      500 or so cars at his yard are under 10 years old and half are below
      five years.

      Like Mr Neo, he is beginning to see some cars that are barely two
      years old coming to his yard.

      'It's scary,' he said.

      Cars do not have a statutory lifespan in Singapore, although owners
      are required to buy a new certificate of entitlement (COE) if they
      wish to keep their vehicles beyond 10 years. Most people do not.

      Not only that, more and more have been 'scrapping' - an industry term
      for deregistering - their vehicles well before 10 years.

      This is because falling COE prices, reduced vehicular taxes and
      cheaper loans have made it more attractive to buy a new car instead
      of holding on to an existing one.

      Businessman Paul Ng was among the thousands who deregistered their
      vehicles last year. In September, he scrapped his three-litre Hyundai
      Grandeur, which he bought for about $160,000 less than four years
      ago, to buy a new 2.4-litre Honda Accord for $106,000.

      'I got back about $68,000 scrapping the Hyundai, then I paid a bit
      more and got a brand new car that will be trouble-free for three
      years,' he said. 'It made sense.'

      The 110,000 deregistration figure should remain a record for some
      time, as motor traders expect the rate of deregistrations to slow

      The managing director of Mercedes-Benz dealer Cycle & Carriage, Mr
      Cheah Kim Teck, said: 'There should be fewer since the Government
      changed the rules in 2002 to make it less attractive for people to
      scrap their cars early.'

      But Mr Neo of Prime Leasing reckons the deregistration rate will
      remain high 'as long as COE prices remain low'.
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