- Joined
- Apr 9, 2009
- Messages
- 3,070
- Points
- 0
WHEN the Certificate of Entitlement (COE) premiums shot up a fortnight ago, project manager Brian Lim was in a dilemma.
Then, the COE for bigger cars (above 1,600cc) hit a staggering $62,502 - rising by more than 30 per cent compared to the previous bidding exercise. Overall, COE premiums had chalked up their single-biggest increases in more than a decade.
Mr Lim wasn't sure if he should wait or upgrade to a new Volvo S60 model. He currently owns a Volvo S40.
The 40-year-old eventually decided to wait it out.
Unfortunately, the COE premiums defied gravity once again in its latest bidding exercise yesterday - shooting to $72,001, up about 15 per cent compared to the previous round.
The current increases are due to the impending reduction in the next COE quota for February to July 2011, which should be announced next month.
Mr Lim bought the Volvo S40 for about $92,000 more than a year ago, and has been thinking about upgrading for a couple of months now.
A new Volvo S60 currently costs about $170,000.
The good news: If Mr Lim sells his S40 now, instead of suffering the usual yearly depreciation, he could possibly make a profit of a few thousand dollars.
This is because a new S40 costs about $140,000 today.
But the bad news is: Because of the high COE now, he'll have to fork out more for the S60.
He said: "It's crazy. I can possibly sell my old car and not make a loss. But I will have to pay a premium for the new car because of the COE. It's a tough choice. I won't rush into it yet.
"But that's the million-dollar question that everyone seems to be asking right now. Should I buy or wait?"
Associate Professor Michael Li, a transport economist at the Nanyang Business School, advised against rushing into buying a new car now.
