# data[].attributes.body
Car Spillovers:
Positive:
According to the articles, the number of supply and demand of the COE has decreased.
- This means that there will be lesser air pollution emitting from the vehicles and noise pollution produced by the vehicles.
- Lesser traffic congestion and traffic accidents
- Lesser usage of petrol and energy dependence

Negative:
However, this also means that there will be more people taking the public transport instead.
- This causes the public transports to become more crowded than usual
- More delays when taking public transport during peak hours
- Commuters are required to wake up earlier to take the public transport as the time taken to reach work is relatively longer compared to using a car

Production Possibility Frontier (PPF)
Based on the articles, we can assume that the while the number of cars produced will either remain the same or have a small increase in production. The number of computers produced however, will increase significantly as more resources will be added to the production of computers instead of cars due to the decrease in supply of COE. The chart below simulates what might happen in the PPF curve.

# data[].attributes.body
A1
- Singapore's annual car growth rate will be cut to 0% from February 2018 onwards
- No new COE will be issued, one addition of a new car will cause 1 car to be deregistered
- COE supply is fixed

Number of buyers in the market
- Singapore's population is increasing given the flexibility in immigration and efforts of promoting population growth by the government
- fixed supply, demand will definitely increase, demand curve shift right, price equilibrium increase, quantity equilibrium remains unchanged, market equilibrium increase

Tastes and preferences
- other mode of transport is mainly the public transport
- however in recent years,  MRT breakdowns and delays has been frequently happening
- travelling time is unpredictable and can be extremely long and unbearable
- faith and trust of commuters are affected
- if the public transport systems improves and becomes seamless, the demand of cars will decrease and the demand for COE will also follow through, since people can now opt to use public transports instead
- if the public transport system is still not well-liked and preferred, we will continue to see a rising demand for cars and people forking out money to renew COE and bidding for it
- also the arrival of latest model or cars

Expectations of consumer
- private hire companies looking to expand their fleet
- proportion of car owners would become lesser than commuters reliant on such services
- demand and price of cars is expected to increase in the near future
- may cause panic buying now with people rushing to bid for a cheaper COE now before it is too late

Money Income
- despite the high price of COE premiums and financing a car, many Singaporeans are still willing to fork out money to buy one
- strong economy = better pay = better purchasing power
- when the economy is strong, money income increases, stronger purchasing power, demand for car increase, demand for COE increase, number if bids increase, price of COE increase, price of car increase
- when the economy falls into recession, money income decreases, weaker purchasing power, demand for car decrease, demand for COE decrease, number of bid decrease, price of COE falls, price of car decrease

# data[].attributes.body
A2
- factor that determine COE supply are the standard of annual vehicle growth rate based on the vehicle population at the end of the year, replacement of COEs from vehicles deregistered in the preceding three-month period and the changes in the taxi population, replacement of commercial vehicles under the Early Turnover Scheme, and expired COEs.
- rather than purchasing a new car which is more expensive, people rather renew COE
- increase in number of renewed COEs = decrease in supply of COE = price of COE increase = price of cars increase
- price of cars increase = sellers would want to sell more cars = supply of cars increase

# data[].attributes.body
A3
Category A
- the monthly average number of COE available has reduced from 3797 pieces in the 2nd quarter to 3630 pieces in the 3rd quarter
-4.4% drop in quota
-COE prices increased from $44 002 - $46778

Category B
- the monthly average number of COE available has reduced from 2641 pieces in the 2nd quarter to 2570 pieces in the 3rd quarter
- 2.7% drop in quota
-COE prices increased fom %50 001 to %53 711

- Smaller quota = smaller supply = supply curve shift left
- increase in money income and increase in population = more buyers in the market = demand increase
- supply not able to meet demand
- supply curve shift left, demand curve shift right, COE price equilibrium increase
- price of COE increase, quantity demanded for COE decrease, upward movement along COE curve

# data[].attributes.body
Determinants of Price Elasticity of Demand
Availability of substitutes in consumption
- Besides owning a car,  people are now able to opt for private car hire services such as Grab and Uber
- Grab and Uber offer services at a pretty affordable price especially for regulars
- Bike sharing and electric car sharing are also other affordable alternatives  to substitute the use of cars in Singapore
- Given these many substitution, demand of car would be price elastic
- An increase in price of cars would drive people to ditch the idea of purchasing a car and opt for the substitutions instead, causing demand of cars to drop

# data[].attributes.attachment_link.readable_text
The Singaporean Dream got a little more out of reach when the LTA announced recently that they were cutting the vehicle growth rate to zero, down from the current 0.25 per cent, starting in February 2018.

In 2020, the vehicle growth rate will be re-examined, but many fear that the government will then implement a negative vehicle growth rate.

This means that starting in February, no new Certificates of Entitlement (COEs) will be issued for private cars and motorcycles. For every new car to be allowed on the road, another car will have to be deregistered.

Of course, the question on everyone's lips is: how will this affect COE prices? Will they spiral out of control, thus putting cars completely out of reach for anyone but the gilded elite and foreign billionaires?

The direction COE prices take will depend on interaction between various factors affecting vehicle demand. Lets take a look at the factors that will raise and lower the demand for those precious COEs.
1. Population growth
The real problem isn't that the number of cars is going to stay the same from now on. It's that the population is going to keep increasing.

The growing population means that there will, over time, be more and more people fighting over the fixed supply of COEs. While total population growth in 2017 was slower than in previous years, the government has been quite transparent about their intention to continue raising the population through immigration.

Of course, the incomes of new immigrants matter when assessing the effect of population growth on COE prices. But given the attractiveness of Singapore to billionaires and tycoons looking for a low-tax environment in which to stash their wealth, it's safe to say the prognosis doesn't look good.
2. Satisfaction (or lack thereof) with other transport options
Many foreigners ask quizzically why so many Singaporeans are willing to fork out a 6 figure sum to drive a car for ten years when we have such a great public transport system.

The answer, as any Singaporean will tell you, is that the public transport system isn't as great as some guy who's here on a 3-day vacation thinks.

The MRT system has been plagued with breakdowns and delays the past few years, a problem which has been getting worse with time.

Unless you live and work near an MRT station, travelling time on public transport is still considerably longer than it is by car.

On the other hand, the opening of new MRT stations and lines does mean that travelling time in the absence of breakdowns has been cut for many Singaporeans. For instance, the Downtown line has been a lifesaver for residents of Upper Bukit Timah, who previously had to rely on frustrating feeder bus services.

The scramble for COEs will depend in large part on Singaporeans' perception of and trust in the public transport system in the years to come.
3. Growth in alternative forms of transportation
For the time being, it looks as though public transport is going to remain unreliable.

Therefore, the only thing that can coax a fall in demand for cars would be growth in alternative forms of transportation.

The most obvious development we've enjoyed in recent years is the rise of private car hire services like Grab and Uber. However, due to surge pricing, most people won't be able to rely on this option all the time.

The introduction of bike sharing has been an encouraging development that has enabled some people to cut their travelling time to MRT stations, while the first electric car-sharing programme is set to launch in December.

In addition, the authorities have been trying to turn cycling into a viable transport option for Singaporeans, and there has also been a spike in the number of people using Personal Mobility Devices like kick scooters and foldable bicycles, which are now allowed on public transport.

Still, Singaporeans have been slow to adopt these alternative forms of transport, many citing the weather and safety issues as reasons for not wanting to use bicycles and PMDs. And at present, bike sharing and electric car sharing with be largely limited to certain areas.

The development of these alternative modes of transport is likely to have a strong effect on the demand for cars in the coming years.
4. The economy and purchasing power of Singaporeans
No matter how gently or violently COE prices rise, cars will never be cheap in Singapore.

How aggressively Singaporeans bid for COEs or whether they're able to afford to renew their expiring COEs depends on how the economy is doing.

When the economy enjoys strong performance and Singaporeans' incomes grow, COE prices are likely to go through the roof, while they might fall during a recession.
5. Demand from private car hire companies
Private car hire companies have the power to drive up COE prices should they decide to grow their fleets.

As the proportion of car owners in the Singapore population falls, it is likely that commuters will become more and more reliant on private car hire services like Grab and Uber.

This could eventually lead to Grab and Uber holding an even larger proportion of the available supply of COEs, which would create an upward pressure on COE prices and cause individuals to face stiffer competition.
6. Panic buying
All of the above factors point to COE growth in the long term. But in the short-term, LTA's announcement is likely to produce panic buying, as Singaporeans rush to get their hands on a vehicle before it's too late and COE prices spiral out of control. We've already caught a glimpse of this in the most recent bidding exercise today, but this might only increase until people realise there's nothing to really rush for.
This article was first published in MoneySmart.

# data[].attributes.attachment_link.title
6 factors that will affect COE prices now that the vehicle growth rate is going to be 0%

# data[].attributes.attachment_link.description
The Singaporean Dream got a little more out of reach when the LTA announced recently that they were cutting the vehicle growth rate to zero, down from the current 0.25 per cent, starting in February 2018. In 2020, the vehicle growth rate will be re-examined, but many fear that the government will then implement a negative vehicle growth rate.

# data[].attributes.attachment_link.readable_text
Two weeks ago, the Land Transport Authority (LTA) announced that it has revised the annual growth rate for the number of cars in Singapore from the current 0.25% to 0%, with effect from February 2018 onwards. This will only be reviewed again in 2020.

Most news from mainstream media have cantered around how industry experts are expecting COE prices to continue staying high or even increase as a result of COE supply not growing, especially if the demand for COE continues to stay high. But how likely would that be?

Supply & Demand Determine Prices

Prices of COE are determined by supply and demand. If there many available COE and not enough bidders, prices would be lower. If there were limited COE and a high demand, prices would naturally become higher.

It's worth noting that more often than not, COE prices are reflected in the overall price of a car. For example, if car dealers expect COE prices to increase, they will increase the price of a new car as a result of that expectation. The opposite also holds true.

What Determines COE Supply?

COE quotas are announced every quarter by LTA. For the period of November 2017 to January 2018, there will be a total of 25,913 COEs made available, or about 8,637 per month across the five different COE categories.

Here's the formula that determines COE quota.

>> Provision for annual vehicle growth rate based on the vehicle population at the end of the year.

>> Replacement COEs from vehicles deregistered in the preceding three-month period.

>> Adjustment for changes in the taxi population, replacement of commercial vehicles under the Early Turnover Scheme, and expired COEs.

Our Analysis:

The annual vehicle growth rate will be 0% until 2020. That means moving forward, it will be a non-factor. COE quota will be determined by just two factors.

(i) Vehicles that are de-registered in the preceding three-month period

(ii) Adjustment for changes in the taxi population and expired COEs

Over the past few years, the number of car owners who have decided to renew their COEs have increased significantly. In 2015, close to 10,000 car owners renewed their COE, which is more than four times the number of renewed COE in 2014. In 2016, the number went up to almost 30,000, a three-fold increase. It's likely that we will see the number continue remaining high in 2017 and 2018.

The irony of how the current COE system operates is that as COE price goes up, more car owners may choose to renew their COE, as opposed to buying a new car that would cost much more.

This in turn means less vehicles being de-registered, leading to even lower COE supply. As quota declines, COE price increases, further leading to even more people preferring to renew their COE as a result of high price. The vicious cycle continues.

Ironically, this would lead to more older cars on the road in spite of the fact that one of the reasons for having COE is to keep the vehicle population in Singapore young.

What Impacts Demand?

Demand for COE refers to how many people being interested to buy new cars. There are a few factors that can affect demand.
#1 Economic Outlook
When the economy is doing well, people tend to have better paying jobs. This leads to a positive outlook for the future and people being more willing to spend today, including luxury items such as a car. Hence demand increases.

The opposite holds true. During a recession, people are hard hit and may find themselves out of job or having to take a pay cut. Those who are not affected may also be wary to spend.
#2 Arrival Of The Latest Car Model
When the latest car models are introduced to the market, demand for these cars increase. This would increase overall COE demand and thus, price of COE will increase.
#3 Expectations Of Future Price
Since COE price are driven by demand, buyers' expectations of future price matters. Here's one example to consider.

On 19 November 2008, COE price for Category A fell to a record $2. Yes, you read that right, $2.

Though this occurred in the midst of the global financial crisis, it immediately brought buyers back into the market. The rationale here is easy to understand. With COE prices already at $2, the only direction prices are heading is up.

The expectation that prices are going to increase is what ultimately brought buyers back into car showrooms. In the next COE exercise, price of Category A COE increased to $7,721.

Similarly, when Category B COE dipped to $38,610 on February 2016, car buyers immediately flock to showrooms to take advantage of the lower COE price. The effect of this is that prices immediately rebounded back to $46,970 in the next exercise.

People's Perception Matters

How people react to the high cost of COE would determine its future price. On one hand, if the high cost of buying and owning a car in Singapore leads to more people giving up car ownership completely, rather than to renew their COE, demand would decline, leading to lower COE prices.

On the other hand, if the increase (or perceived future increase) in COE price leads to more car owners renewing their COE, instead of giving up their car, future COE supply will decline, and that is likely to lead to higher COE prices.

One action leads to a decline in demand, another leads to a decline in supply.

What do you think is going to happen next to COE prices? Share it with us on Facebook.

# data[].attributes.attachment_link.title
COE Quota Is Cut Again. What Will Happen To Car Prices In Singapore?

# data[].attributes.attachment_link.description
Two weeks ago, the Land Transport Authority (LTA) announced that it has revised the annual growth rate for the number of cars in Singapore from the current 0.25% to 0%, with effect from February 2018 onwards. This will only be reviewed again in 2020.

# data[].attributes.attachment_link.readable_text
SINGAPORE - Certificate of Entitlement (COE) prices for cars finished higher at the close of the latest tender exercise on Thursday (Aug 10) - a change that industry observers attributed to the longer-than-usual break between bidding exercises.

For cars up to 1,600cc and 130bhp - known as Category A - COE premiums rose by 6.3 per cent, from last month's $44,002 to $46,778. COE prices in Category B - cars above 1,600cc or 130bhp - moved up 7.4 per cent from $50,001 to $53,711.

In the open category, which is often used for the purchase of bigger cars, COE premiums climbed by 5.3 per cent from $50,101 to $52,751.

Mr Michael Lim, president of the Singapore Vehicle Traders Association, said he was not surprised by the results.

The interval between COE tenders is typically two weeks, but. instead. there was a three-week gap between Thursday's bidding and the last exercise that ended on July 19, said Mr Lim.

"The dealers will sell more cars over this period. They could have also taken some orders during the National Day public holiday as well," said Mr Lim.

There are two COE bidding exercises every month, typically starting on the first and third Monday, and closing on the Wednesday of the same week. As Aug 1 fell on a Tuesday, the month's first bidding exercise started on Aug 7.

Apart from the longer gap, some observers like Mr Raymond Tang, managing director for Yong Lee Seng Motor, said the increase in car COE prices could be due to the smaller quota.

For the August to October period, there is a monthly average of 3,630 pieces of COE available in Category A, about 4.4 per cent fewer than the quota of 3,797 in the previous quarter. For Category B, the quota fell by 2.7 per cent, from 2,641 to 2,570.

COE quotas are adjusted every quarter, based on factors including the de-registrations in the preceding quarter and the overall vehicle population growth rate.

Meanwhile, COE prices for commercial vehicles saw minimal movement, dropping by $8 from $42,809 to $42,801. COE prices for motorcycles dipped by 2.6 per cent, from $5,851 to $5,701.

Mr Tang also speculated that superstitious buyers could have wanted to register their cars before the upcoming Seventh Month or Hungry Ghost Festival, hence driving up the demand for COEs as well.

Latest COE results:

Source: Land Transport Authority

# data[].attributes.attachment_link.title
COEs finish mixed in the first round of bidding in August 2017

# data[].attributes.attachment_link.description
SINGAPORE - Certificate of Entitlement (COE) prices for cars finished higher at the close of the latest tender exercise on Thursday (Aug 10) - a change that industry observers attributed to the longer-than-usual break between bidding exercises. For cars up to 1,600cc and 130bhp - known as Category A - COE premiums rose by 6.3 per cent, from last month's $44,002 to $46,778.