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Sg Car Insurance = SCAM!

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  • Sg_Review-subscribe@yahoogroups.com
    http://forums.delphiforums.com/sammyboymod/messages/?msg=70051.1 Forum: the Sammyboy.com s Alfresco Coffee Shop ™ Forum Subject: Sg Car Insurance = SCAM!
    Message 1 of 1 , Apr 12, 2005

      Forum: the Sammyboy.com's Alfresco Coffee Shop � Forum
      Subject: Sg Car Insurance = SCAM!
      From: (MAKAPA)
      To: (ALL)
      DateTime: 12/04/2005 08:56:13

      when your papaya masters have no transparency, what do you expect from salesmen


      Motor premiums: More transparency needed

      ABOUT four months ago, your paper reported on the dissatisfaction of
      many motorists who were slapped with hefty premium increases despite
      having a claims-free record. I was one of them.

      At the time, the General Insurance Association (GIA) tried justifying
      the hefty premium increases, although the reasons given were very
      weak. For drivers like myself, who have maintained accident-free
      records, the increase was unjustifiable and left us feeling cheated.

      At that time, I wrote to the press and suggested that motor insurance
      is actually a cash cow for insurance companies, and motorists were
      being milked. If indeed the losses were as bad as GIA made it out to
      be, why do insurance companies continue to compete aggressively for
      the business all these years?

      Recently, GIA reported that insurance companies made a profit of $10.7
      million in the motor business last year. Can you believe this? Within
      four short months, the insurance companies have turned the losses into
      a profit of $10.7 million!

      And they have done so despite repeatedly maintaining that many of the
      factors are beyond their control, for example, the increases in prices
      of car parts due to currency fluctuation.

      Are we to believe that all the problems which the industry could not
      fix for the last 10 or more years suddenly disappeared?

      We do not begrudge insurance companies the right to make a profit. All
      we ask for is greater transparency and a fairer method on which
      insurance premium is charged.

      GIA and the insurance companies owe us an explanation. And no more
      fudging, please.

      Now that the insurance companies are making such a tidy profit, are
      they going to refund the premiums to those who were slapped with the
      unjustifiable increase?

      If GIA and the insurance companies cannot manage their own affairs,
      maybe the Monetary Authority of Singapore should step in to regulate
      premium increases.

      Patrick Tan Siong Kuan

      DelphiForums.com: Home to the Web's most vibrant
      online communities. Explore more than 100,000 Forums
      or create your own at http://www.delphiforums.com

      By: Mellanie Hewlitt
      Singapore Review
      15 Jan 2005

      COE, Parf, ARF - confused? Characteristics of The Great COE Scam

      It is glaring that although Singapore has the world's most expensive
      cars, the vast majority of car owners remain confounded by the
      complicated pricing and ownership system. (See artcile from the New
      Paper 14 Jan 2005 "COE, Parf, ARF - confused?")

      In all developed countries, buying a car is a simple and transparent
      affair that is concluded between buyer and seller. The only other
      third-parties involved are the insurance company and the finance
      company. In Singapore a series of bureaucratic shields and paperwork
      complicate the process.

      The system is massively complicated, designed to confuse the average
      car buyer. The objective is to disguise the underlying scam which
      involves siphoning funds from the car owner into the bloated coffers
      of the government.

      The latest tender saw car COE premiums ending at $18,400 (up to
      1,600cc) and $14,002 (above 1,600cc) - the lowest in over a decade.
      The government is set to release between 100,000 to 120,000 COEs this
      year. At an average COE "price" of approx SGD16,201 per COE this
      amounts to a whopping SGD1,944,120,000/- in COE revenue for the

      Although the supposed objective of the COE system was to regulate
      traffic flow and reduce traffic congestion, a number of
      characteristic reveal the actual COE scam which has the hidden
      purpose of siphoning funds from car owners.

      The scam is Revealed via the following formulae:

      COE Revenue = COE Price X Number of COE issued.

      Regardless of the price of the COE, the total COE revenue collected
      remains generally stable at approx SGD1.994 billion. This is because
      any fall in price is compensated by issuance of more COEs hence
      keeping the COE revenue relatively stable.

      Below are some of the characteristics of the COE scam:

      1) The illusion created by the Scam is that the price of the COE
      flustuates as a result of demand and supply. In reality Car Owners
      are actually providing a buffer for the government and ensuring a
      steady COE income stream.

      2) The scam also effectively encourages Car Owners to scrap perfectly
      good vehicles early. 3-4 year old cars in mint condition and
      purchased at very high COE prices are scrapped early when COE prices
      fall. With a greater number of vehicles "retired prematurely" the
      government can then issue more COEs at lower prices creating the
      illusion of a COE market that is driven by demand and supply.

      In the above scenario, the constant that is maintained is the COE
      revenue. In a market that is truly driven by Demand and Supply, a
      fall in demand will eventually lead to a fall in supply which will
      translate into reduced sales reveunes.

      3) It is Impossible to actually own a car in Singapore.
      To ensure continuity of the COE income stream, the PAP government has
      effectively made freehold car ownership in Singapore impossible. Car
      Owners never actually "own" the car per say, even after spending so
      much money on a piece of paper, all they actually hold is a lease
      giving them a conditional revocable right to drive a car for 10 years.

      At the expiration of this lease, the COE certificate is either
      renewed via payment of additional fees by current owner, or (in event
      the old owner chooses not to renew the lease) it is "purchased" by a
      new bidder. Either ways the PAP government is assured of a never
      ending income stream.

      4) The scam is also revealed when a car owner attempts to scrap
      prematurely. The system does not allow the car owner a cash rebate on
      the balance COE. Instead, the car owner has to purchase another car
      (and another COE) and deduct his COE rebates from the final purchase
      price. This ruse ensures that COE money remains with the government
      even when a COE is scrapped prematurely, thus assuring them of a
      steady income stream, albeit at the expense of car owners.

      5) This ruse has been used successfully for over a decade in
      conjunction with a series of other hidden "taxes" (like the ERP, CPF,
      GST etc) all designed to provide a cheap and ready source of revenue
      for undisclosed government activities.

      6) The scam is given a veil of legitimacy with the support of laws
      and regulations. The local government owned media regularly report
      that the COE system "is tightly regulated and very competitive".

      7) A plethora of technical terms are used also add layers to the scam
      and hide the underlying ruse. Terms like "COE", "PARF", "ARF", "OMV"

      The COE scam also works in conjunction with other scams and is part
      of a more elaborate process. On top of the COE, car owners also have
      to pay Road Tax (which is reasonable) and also ERP (Electronic Road
      Pricing) which imposes a further cost for road usage.

      So Car owners are penalized not just for leasing a car but also for
      the road usage.

      8) Other countries like Hong Kong also successfully control traffic
      and the COE concept is conspicuously absent from these countries. In
      fact in Hong Kong although there is a high cost to owning a car, this
      is contained in the parking fees and charges which are paid to
      landlords. The main difference here is that the parking fees are
      collected by land lords and channeled back into the private sector.

      In Singapore the COE revenues totaling SGD2 billion are channeled
      directly into government coffers. No one knows what happens to this
      massive amount of money.

      9) How does the government justify the existence of such a system in
      the first place? After years of implementation, the original
      objective of the system (which was to control traffic congestion) has
      long since been lost. Traffic jams are a common occurence all over
      the island especially during peak hours and even the implementation
      of additional penalties like the ERP have failed to address this

      So what exactly are Singaporeans paying for when there is no concrete
      proof for justification of the system? Such an obvious scam would
      have risen many questioning eyebrows in other developed nations. But
      here in Singapore part of the reason for the success in the deceit
      lies in the social political circumstances which are unique only to

      There is basically no accountability in government administration and
      the political system effectively discourages any calls for
      clarifications. Law suites are used as a convenient tool to silence
      political opposition members and the international press.

      After decades of indoctrination, local citizens have adopted a spirit
      of apathy and unquestioning obedience to any enforced regulations and
      policies. Indeed the government scammers are sound very legitimate.
      They are usually polite, friendly, personable, sincere, convincing,
      and controlling; formidable foes for more trusting average Car Owner.

      10) Social and Psychological Indoctrination are important tools in
      the scammers arsenal. In Singapore, a car has been portrayed by the
      government as a "luxury item" in order to justify its high price.

      On the other hand, government policies place immense pressure on
      families to reproduce and more than one child. This, coupled with
      uncertain employment (and high unemployment rates of 4.50% p.a.) have
      necessitated dual income families with both spouses working long 12
      hour work days. The hectic lifestyle and multiple roles of both
      spouses (as wage earner, parents and care-takers of their own
      parents) have rendered a car a very necessary asset.

      11) Whilst the average con artist and scammer can be reported to the
      authorities, how does one seek recourse when the local authorities
      themselves are part of the elaborate hoax? The picture remains bleak
      for Singaporeans as there seems no way out for them from this system.

      12) According to a BBC article, not all scams are illegal by
      definition. In fact some software scams are perfectly
      legal. "Unscrupulous software suppliers have been taking advantage of
      software license agreements to trick customers out of anything from
      �10,000 to �100,000 plus. There is nothing illegal about it - some
      of the world's largest software companies have been doing it to some
      of the biggest companies in the world."

      The COE scam falls within this special category.


      COE, Parf, ARF - confused?
      You're not alone. Most people we polled are too

      By Amit Jain

      SINGAPOREANS know the price of cars and spend a fortune on them.

      But when it comes to the details of buying or owning a car here, many
      know next to nothing.

      A recent study showed about one in nine people here owns a car, and
      only a fraction of them seem to know all about additional
      registration fee (ARF), preferential additional registration fee
      (Parf), or certificate of entitlement (COE).

      A random poll of 100 car owners by The New Paper revealed that most
      knew little more than how to go to a car showroom and select a model.
      They are happy to leave everything else to the dealers.

      For example, about eight out of 10 drivers we polled had no clue how
      much their cars were worth or why they had to pay a certain amount of
      insurance every year.

      About three quarters of respondents also did not know what Parf means
      or how the COE system works. (See 'POLL RESULTS' below.)

      And the question that takes the cake: What is a log card? About three
      in 10 did not know that cars come with an 'ownership title', known as
      the log card.

      They do not often get to see the log card, which is retained by the
      finance company they take loans from.

      And since they are given only photocopies of it, they assume it is
      nothing more than a 'receipt' of the transaction.

      Most of those we polled were professionals and business executives
      aged 25 to 40.

      In comparison, most of them were quite well-informed about property
      transactions. They knew, at least roughly, the value of their homes
      and the mechanics of buying or selling property.

      So, what is it about cars that keeps many owners poorly informed?

      One car owner, senior advertising executive Robin Nayak, 39,
      said: 'It is up to the dealer, not me, to know.'

      Like him, other owners also feel that getting information about cars
      can be on a 'need to know' basis - check only when the time comes,
      such as when you want to buy or sell a car.

      Marketing executive Margaret Foo, 40, said: 'I would get the value by
      going to the dealer, finding out how much they are selling their used
      cars for, and benchmark from there.'

      Motoring analyst Justin Lee, 40, noted that the average car owner has
      two things in mind - cost and affordability.

      'They do not consider it worth their while to know any more,' he said.

      Mr Alex Teo, 33, managing director of Motorcars.com.sg agreed.

      'Most people can't be bothered,' he said. 'After having set aside a
      fortune for their cars, the owners come to expect that whoever has
      sold them the vehicles will settle matters on their behalf.

      'They are keen to know only what their down payment and monthly
      instalments are.'

      But if you are a car owner, should you be concerned?

      Opinion is divided about how much motorists need to know about their

      Mr Teo said: 'It is necessary for the car owner to know what he is
      getting into, especially if he is buying, selling or trading-in a
      used car.

      'Although there are fewer cases of fraud these days, car owners can
      leave themselves open to price manipulation if they are ignorant.'

      But Mr Lee thinks otherwise.

      'Singapore is a regulated market and most car agencies are fairly
      reputable. Moreover, the value of your car is pegged to its age and
      anyone can calculate it.'

      Mr Simon Hulber, 40, publisher of the Highway motoring magazine,
      said: 'I think the survey results reflect the way the car industry
      functions in Singapore.

      'It is tightly regulated and very competitive. So most car owners do
      not see the need to know any more than they should.' - Additional
      reporting by Emilyn Ng and Jaclyn Lim




      Do you know what is Parf?
      No: 65 per cent
      Yes: 35 per cent
      Answer: It is the preferential additional registration fee
      certificate that you get as a rebate when you de-register a used car.
      It is also known as the scrap value certificate. You can find the
      scrap value of your car online by visiting www.onemotoring.com.sg and
      keying in your IC number and the car's licence plate number.

      Do you know how your insurance premium is calculated?
      No: 78 per cent
      Yes: 22 per cent
      Answer: It's based on a variety of factors, such as market value, no-
      claim discount and whether you have committed a traffic offence.

      Do you know what is the most important document to you, as a car
      No: 30 per cent
      Yes: 70 per cent
      Answer: The vehicle's log card - an ownership document which also
      contains technical and other details about the car.

      Do you know how to bid for COE?
      No: 72 per cent
      Yes: 28 per cent
      Answer: For three days, usually beginning on the first and third
      Mondays of each month, bids can be submitted using DBS/POSB ATMs,
      Internet banking with Citibank and UOB, and phone banking with
      Citibank and OCBC.

      If you scrap your car today, do you know how much value you will get
      from it?
      No: 80 per cent
      Yes: 20 per cent
      Answer: You can do a rough calculation by using the following
      formula: Value of the car = (The COE paid on the car) x (the number
      of years still left for use/10) + Parf rebate. The Parf rebate value
      can be obtained by visiting the www.onemotoring.com.sg and keying in
      your IC number and the car licence plate number.


      Comments: Mellanie Hewlitt
      24 Dec 2004
      Singapore Review

      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
      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
      perfectly good and road worthy condition and are testimony to the
      feats of their makers.

      But in Singapore, the COE system effectively encourages owners to
      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
      of these periods, "owners" have to fork out additional cash upfront
      to retain
      the right to the asset. This inefficient and highly expensive system
      resulted in tremendous wastage and additional costs for the average
      especially since housing and cars will be the 2 most expensive items
      for the
      average Singaporean.

      High Obsolesces Rates of Valuable Assets Lead To Wastage & High 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

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

      Dec 24, 2004
      2004 set to be another record year for scrapped cars
      by Christopher Tan

      DESPITE measures to discourage the early scrapping of cars, the
      number of
      vehicles deregistered will reach a record level again this year.

      It is estimated that by year-end, up to 115,000 vehicles will have
      been taken
      off the road, up from the 109,710 recorded by the Land Transport
      Authority last
      year. The estimate is based on the more than 105,000 vehicles
      deregistered in
      the last 11 months, a monthly average of about 9,600.

      Cars would make up 74 per cent of them, a tad above last year's 73
      per cent.

      The sizeable exodus has been a yearly phenomenon since the late
      1990s, because
      of the tax rebates owners get when they send their cars to the
      scrapyard or for

      As prices of cars decline with falling taxes and certificate of
      (COE) premiums, rebates are often higher than what owners could get
      on the
      resale market.

      The Government has taken steps to curtail the premature scrapping, as
      it is a
      drain on the country's foreign exchange earnings. It changed the
      rebate formula
      in early 2002 to make it less generous.

      But industry players say the trend will take time to reverse. The
      president of
      the Automotive Importers and Exporters Association, Mr Neo Nam Heng,
      expects the
      trend to continue for some time, noting that 2002 and 2003 cars are
      being scrapped.

      'In my yard, there are at least 50 2002 cars, mainly Lexus,' Mr Neo
      adding that the lower COE results released this week will 'accelerate

      Four export-processing zones - yards to hold vehicles before they are
      out - were set up last year. Two more operators were appointed two
      months ago to
      handle the growing number of scrapped cars.

      But Transport Minister Yeo Cheow Tong expects more people to keep
      their cars for
      10 years, with the new scrap rebate formula. Pegged to the additional
      registration fee (ARF), the rebate will shrink as the ARF is trimmed.

      The Government will be gradually reducing the ARF. Mr Yeo last month
      said: 'We
      will continue to review the upfront taxes to make car prices more


      From: ConcernedReader@m...
      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@y...
      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
      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
      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
      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
      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
      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
      apathy permeating Singapore's less then inquiring populace. But then
      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
      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
      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

      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-
      luxury cars are being scrapped.

      Renew your old car, scrap your new one. Only in Singapore."
      --- End forwarded message ---
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