Dear A.S.S. Editor
It’s a worrying trend that prices for COE premiums dipped as it allows more people to buy car. Now Singapore is such a small country and we have just too many cars on the roads. Reason being is that despite having the restriction of loans and a hefty sum of downpayment, Singaporeans are still able to afford as they are earning money from stock markets and lotteries. And to make matters worse, some in-house financing companies or should I say car dealers provide in house loans that will easily manipulate with the loan system by offering high loan, which make the car even more affordable.
Take a car selling at $100,000 with COE for example, one needs to fork out only $40,000 cash for the car and the remaining $60,000 can be paid using bank loans, with a repayment term of 5 years, the monthly installment is only about $1000 which is very affordable for working class people earning around $4000 a month, worse still, the $40,000 downpayment can be offset with a trade in of car. Also to pay $1000 a month, it’s also easy peasy for smart people who use their cars for RYDE and GrabHitch or Grabcar and Uber, where they just need to pick very few fares a day and they will be able to cover the installment. Also, ERP proves for cars are between $0.50 and $3 is way too affordable!
The best solution out of this problem will be that our government should not be so money minded. Since they are driving Singapore towards Car Lite, they should make car buyers pay COE upfront on top of the 40% downpayment, which means to say, for a $100,000 car, one will have to pay $80,000 upfront and the remaining $20,000 can be paid with loan at maybe over 3 years, and that the COE for the car will depreciate 20% more than the depreciation value of the car and also increase the ERP rates from between $0.50 to $3 to between $5 – $15. By doing so, there will definitely be a sharp reduction of private cars on the roads as one will have to fork out nearly 80% of the value for the car. There is no point buying a car anymore for most of them and even doing RYDE, Grabhitch, Uber or Grabcar can’t wouldn’t cover much of the amount thrown in as the car’s upfront payment.
I hope this post will be shared and forwarded to the LTA for consideration.