Renewed COE BMWs, Good BARGAINS?

[edlms]

Re: Renewed COE BMWs, Good BARGAINS?

I think this is a great thread. Please allow me to play devil's advocate and ask this question n stir more debate...

What is wrong with the govt making money? Taxing the rich? I say fine... go ahead.
You buy an M3, you pay $100k ARF
You buy a Mazda3, u pay $15k ARF
Sounds like capitalism to me...

Nothing wrong with making money. But your analogy is relating to Tax, whilst i was referring more to COE and ERP. In Singapore, the policy towards auto ownership should be seen as a whole and in it's entirety.

If you can be bothered to do a calculation based on the original price of the car, for cost and consumption as a percentage, including fuel tax, parking, ERP, insurance (basically every $ relating to the car), you may be surprised to find that the "rich" are better off (as a percentage, not as absolute $)

The reasons given for the high tax and COE and ERP has always been Singapore is small. But if the policies are not financially motivated, the limitations can be overcome by good town planning and quotas based on balloting.

Coming back to the topic at hand, the reality is that the value of a car, mods and all, is largely determinate on one factor - the price of the COE. If you can follow through with the train of thought, you will see that the COE is a political instrument...

C3PO said it right - follow your heart where your pocket allows it.

cheers

 

[edlms]

Re: Renewed COE BMWs, Good BARGAINS?

used to be able to get TPFT cover from AXA, but nowadays they only offer third party coverage

anyone interested to know why?

cheers

 

[Mockngbrd]

Re: Renewed COE BMWs, Good BARGAINS?

cos coe car dun have paper value if they get totalled?

 

[C3P0]

Re: Renewed COE BMWs, Good BARGAINS?

Ya, I think that's the reason Bro Mock.

 

[edlms]

Re: Renewed COE BMWs, Good BARGAINS?

cos coe car dun have paper value if they get totalled?

fundamentally YES.

3rd party insurance is mandated by law, so the insurance companies LL.
For non-COE cars, the insurer charges the premium based on the "market value" of the car.
If you have a $100k car with a $20k COE, ie $80/$20k market value, you will be paying a premium based on $100k.
However, in the event of a total loss (the max exposure for the insurer) the insurer actually gets the balance of the COE refunded to them.

So they are actually charging premiums based on $100k rather than $80k... BS if you ask me (especially back in the day when COE was more expensive than the car)

Back to COE cars, whilst in theory, there is a market value, the underwriters and underwriters' underwriters (which are foreign insurance companies) cannot comprehend and calculate the premiums to charge on something that has no value, on paper.

Take a $250k 11-year old Ferrari for example. (In the first instance, it is so highly priced due to the high entry price.) If it is involved in bad accident costing $150k worth of damage. What does the insurer do? repair? repair and export? considering the value of the same car overseas, it would be a "either way also die" situation. Better off not accepting the insurance risk.

This relates to the topic... you like it, you can afford it, don't think too much about value and re-sale...

cheers

 

[Girettom]

Re: Renewed COE BMWs, Good BARGAINS?

... yet that is exactly how the insurance market works in the UK, in that the risk is spread amongst the portfolio of customers an insurer has. If the car is trashed, the premiums on the fifty or so cars that aren't trashed cover the loss. Additionally, the car is scrapped proper and sent to a scrap yard to be parted out where much of the residual value can be recovered if the trashed car isn't so trashed. This way, the insurer still doesn't lose out.

So, it's completely viable to insure a fellali with a body value of $250,000 even if the car has no paper value. However, I would say that insurance in the UK is way way way more expensive than it is here

 

[hoks]

Re: Renewed COE BMWs, Good BARGAINS?

However, in the event of a total loss (the max exposure for the insurer) the insurer actually gets the balance of the COE refunded to them.

I believe not just COE, arf rebate also goes to insurer.

This relates to the topic... you like it, you can afford it, don't think too much about value and re-sale...
cheers

Sometimes hard not to think...especially over the last year when resale prices dropped like a bomb.

 

[Saosin]

Re: Renewed COE BMWs, Good BARGAINS?

No worries, I read 3 times, now I understand, ha ha.

Basically your opinion is the same as Peckhs. Meaning we won't lose PARF if we renew COE.

Opps...i apologize for the confusion caused. Grr..the dealer is at it again! I'm just gonna clarify with him why he said no parf for a 9 yr old e46.

 

[edlms]

Re: Renewed COE BMWs, Good BARGAINS?

I believe not just COE, arf rebate also goes to insurer.



Sometimes hard not to think...especially over the last year when resale prices dropped like a bomb.

yes you're right on both counts...
i'd like to clarify that what i mean by "dont think too much about value and resale".

I believe we should not think along the lines of "I buy at $X now, and in 5 years I should be able to sell at $(X-Y), therefore I will lose $Z". I think when we buy cars, we should see what we can afford (subjectively) and make the purchase at the prevailing market price. Whether or not you can sell at a "good price" later is not something that one can anticipate with any real certainty. only an educated guesstimate.

i've heard people say and have also read posts that say something like "i will only buy a car that will depreciate less than $Xk a year". i believe that to focus in this approach is fundamentally erroneous in the Singapore context.

cheers

 

[edlms]

Re: Renewed COE BMWs, Good BARGAINS?

... yet that is exactly how the insurance market works in the UK, in that the risk is spread amongst the portfolio of customers an insurer has. If the car is trashed, the premiums on the fifty or so cars that aren't trashed cover the loss. Additionally, the car is scrapped proper and sent to a scrap yard to be parted out where much of the residual value can be recovered if the trashed car isn't so trashed. This way, the insurer still doesn't lose out.

So, it's completely viable to insure a fellali with a body value of $250,000 even if the car has no paper value. However, I would say that insurance in the UK is way way way more expensive than it is here

true. it's all about the maths, statistics and risk.

there is no real economies of scale in singapore to sufficiently balance the risk - from a foreign underwriter standpoint.

in the event of an accident, the insurer usually must mitigate the payout. either by repairing, writing off, exporting etc. given the smallish pool of COE cars here, we can only assume that the maths has been done, and determined that the risk is not worth it... or that the premiums charged would be a deterrent to keeping COE cars.

BTW, anyone know what is the Third Party insurance premium for, say, a $80k COE car? as compared to a Comprehensive for a brand new $80k car?

cheers

 

[jpwong]

Re: Renewed COE BMWs, Good BARGAINS?

I know neither the insurance premium payable for a third party coverage on a $80k COE car nor the comprehensive coverage for a brand new $80k car. What I think is the prices for car insurance do not make much sense.

Example 1:
A 4-year-old car with an OMV of $80000 and a COE of $14000 of residual value left will probably cost about $2500 annually in insurance premium for comprehensive coverage. The car body is estimated to be about $15000. If the whole car is totalled, the insurer's risk is merely about $15000 as the rest is covered by the high OMV and COE when scrapped.

Example 2:
A brand new car with an OMV of $15000 and a COE of $10000 will cost only about $1250 annually in insurance premium for comprehensive coverage. The price of a typical brand new car will cost between $50000 to $60000 generally. If this one-month-old car is totalled, the insurance company will probably replace a brand new car. The paper value of the car is worth only about $20+k and that will mean the insurer's risk is about $30+k ($50+k subtracting $20+k).

My question is this: WHY IS THE INSURANCE PREMIUM FOR THE 4-YEAR-OLD CAR MORE EXPENSIVE WHEN THE RISKS ARE MUCH LESSER?

Any comments?

Other than this anomaly, the variable costs as a percentage of total cost of ownership of using a more expensive car is definitely lower compared to a less expensive car as ERP, COEs, parking, fines and summons are the same regardless of the car you drive.

 

[peckhs]

Re: Renewed COE BMWs, Good BARGAINS?

Opps...i apologize for the confusion caused. Grr..the dealer is at it again! I'm just gonna clarify with him why he said no parf for a 9 yr old e46.

i think it is better to check with LTA then to take it from a dealer....

 

[peckhs]

Re: Renewed COE BMWs, Good BARGAINS?

... yet that is exactly how the insurance market works in the UK, in that the risk is spread amongst the portfolio of customers an insurer has. If the car is trashed, the premiums on the fifty or so cars that aren't trashed cover the loss. Additionally, the car is scrapped proper and sent to a scrap yard to be parted out where much of the residual value can be recovered if the trashed car isn't so trashed. This way, the insurer still doesn't lose out.

So, it's completely viable to insure a fellali with a body value of $250,000 even if the car has no paper value. However, I would say that insurance in the UK is way way way more expensive than it is here

from what i understand, the insurance in UK is much more varied. we have the choice to choose the coverage that suit us best, based on our usage and such, and they are much more comprehensive compared to our local policies...
correct me if i'm wrong

how come suddenly so many 'crayon xiao sin'????

 

[leebmer]

Re: Renewed COE BMWs, Good BARGAINS?

... yet that is exactly how the insurance market works in the UK, in that the risk is spread amongst the portfolio of customers an insurer has. If the car is trashed, the premiums on the fifty or so cars that aren't trashed cover the loss. Additionally, the car is scrapped proper and sent to a scrap yard to be parted out where much of the residual value can be recovered if the trashed car isn't so trashed. This way, the insurer still doesn't lose out.

So, it's completely viable to insure a fellali with a body value of $250,000 even if the car has no paper value. However, I would say that insurance in the UK is way way way more expensive than it is here

isnt the recent revamp of motor insurance market here following what you just mentioned for UK market..i think if u renew your motor insurance in recent months, u should see an average 33% increase in premium..the excuse is they are hit with heavy losses due to overclaim and have to increase premium to cover cost/loss..which translate into higher premium..

i used ntuc last year and was due for renewal this aug..guess what..they increase my premium by 70%..i heard from a broker that it is becoz they suffered bad hits from 2-door category..so hence the hefty increase in premium for this group..i switched to AXA as they quoted $200 increase only..

 

[hoks]

Re: Renewed COE BMWs, Good BARGAINS?

yes you're right on both counts...
i'd like to clarify that what i mean by "dont think too much about value and resale".

I believe we should not think along the lines of "I buy at $X now, and in 5 years I should be able to sell at $(X-Y), therefore I will lose $Z". I think when we buy cars, we should see what we can afford (subjectively) and make the purchase at the prevailing market price. Whether or not you can sell at a "good price" later is not something that one can anticipate with any real certainty. only an educated guesstimate.

i've heard people say and have also read posts that say something like "i will only buy a car that will depreciate less than $Xk a year". i believe that to focus in this approach is fundamentally erroneous in the Singapore context.

cheers

Yup, agree with that...sometimes guesstimate goes wrong though but heck, just enjoy the car

I know neither the insurance premium payable for a third party coverage on a $80k COE car nor the comprehensive coverage for a brand new $80k car. What I think is the prices for car insurance do not make much sense.

Example 1:
A 4-year-old car with an OMV of $80000 and a COE of $14000 of residual value left will probably cost about $2500 annually in insurance premium for comprehensive coverage. The car body is estimated to be about $15000. If the whole car is totalled, the insurer's risk is merely about $15000 as the rest is covered by the high OMV and COE when scrapped.

Example 2:
A brand new car with an OMV of $15000 and a COE of $10000 will cost only about $1250 annually in insurance premium for comprehensive coverage. The price of a typical brand new car will cost between $50000 to $60000 generally. If this one-month-old car is totalled, the insurance company will probably replace a brand new car. The paper value of the car is worth only about $20+k and that will mean the insurer's risk is about $30+k ($50+k subtracting $20+k).

My question is this: WHY IS THE INSURANCE PREMIUM FOR THE 4-YEAR-OLD CAR MORE EXPENSIVE WHEN THE RISKS ARE MUCH LESSER?

Any comments?

Other than this anomaly, the variable costs as a percentage of total cost of ownership of using a more expensive car is definitely lower compared to a less expensive car as ERP, COEs, parking, fines and summons are the same regardless of the car you drive.

My guess is for case 1, the market value of the car @ 4 yrs may not be simply scrap $$ + body $$...though car dealers always like to claim that.

 

[LionFlyer]

Re: Renewed COE BMWs, Good BARGAINS?

would a renewed E36 be a better buy? currently transport-less because my workplace is near my home. but thinking of getting a ride for the weekends only.

 

[ClemZ]

Re: Renewed COE BMWs, Good BARGAINS?

if its just for the weekends, go for those car pool rental schemes...its cheaper than owning a car.

heck, the monthly season parking already covers 1 weekend of car rental

 

[mkl22]

Re: Renewed COE BMWs, Good BARGAINS?

some things to add about 3rd party vs comprehensive.

The price difference between a 3rd party and comprehensive can be just 50bucks.

The other thing about comprehensive insurance is that the insurance company will pay out at minimum the paper value of the car. if you do a 3rd party insurance and if you still owe money to the bank, you will need to redeem the loan in full, then be able to deregsiter the car and get your cash from LTA. so with comprehensive, you do not need to fork out this cash amount.

So even though you have a car close to paper value, a comprehensive insurance might be a better bet if you still have a loan. else a 3rd party will be fine and your maximum loss is just the body value.

I'm paying 1k+ a year for insurance for a car with just 4k body value. Hardly any risks for the insurance company.

 

[bayerische]

Re: Renewed COE BMWs, Good BARGAINS?

insurance companies still YET complain that not making $$$ so must whack up price

 

[swt]

Re: Renewed COE BMWs, Good BARGAINS?

i have been driving a coe car since 2007. bought mine from one of the threads in this forum. did not go through dealer.

coe cars are not problem free just like new cars, probably needs more attention and care, again depending on the condition of the car when you first buy it. and yes, buy only if u intend to keep it all through the coe tenure.

for me, it's affordability, and since being new to these car, also a way to get introduced...