Tuesday, June 12, 2007

GST hikes, Dumb Singaporeans and their Car shopping

Sometimes, I can't help but wonder if Singaporeans do know their mathematics.
Even despite reports saying Singaporean kids are among the world's top few in terms of competence in Maths & Science, I still have my doubts about it, especially after looking at the dumb adults.

The most simple example will be the mad rush to buy cars after the GST hike was announced.
Obviously, their initial thought will be that if they were to buy now, they will save that additional 2% as compared to buying after 1st July.

If we were to base the additional tax hike on the latest prices from Motor Trader Association, (http://www.mta.org.sg/documents/PriceList_002.pdf) a new Toyota Corolla Altis 1.6 (Cat A) will cost approximately $1k more in tax whereby a luxury car (Cat B) like Toyota Camry 2.4 would easily cost $1.8k more.
For the entry level folks, a Hyundai Getz 1.4 will probably be around $700+ more.
For the bengs-wannabe, a 2.5 WRX STI will easily cost $2k more.
And for the high-flyers? a BMW 730 will easily cost $5.5k more.

However, they forgot that other dummies in the nation think alike like him.
In Singapore where they have the COE system to collect revenue for the 'smart' Govt, a surge in demand + those MIW reducing the quota (U asshats!) would mean rising premiums for the dumb buyers and more pocket money for the ministers and their ministerial pay hike govt to spend on other projects.
(what a nice way of putting it across)

http://www.lta.gov.sg/corp_info/doc/COE_Result_2005_2007.pdf
There u go. From there you can see that the average price trend has been rising from 11k+ to 16k+ now for Cat A (<1600cc),>1600cc), a 6k+ hike.

An simpleton upon looking at these figures can easily tell that only buying the more expensive/luxurious cars now, will you then stand to gain assuming the COE price maintains the current rising trend.
Of cos though, if COE prices go back to its original level after 1st July, then those small car owners (>1600cc) will be jumping mad then for buying so early.

A more indepth analysis will be to look at the % of which the respective COE premium hike is as a proportion of the cost of the cars.
For the smaller cars like your typical Vios, Corolla, Getz, Picantos and others, assuming it cost on average between 40k to 50k, it'll be approximately 10% to 12.5% of the car cost.
Whereby for the bigger cars, it can be anything from 6, 7% to as low as 1% or even lower.

So moral of the story? It pays to do your sum before you blindly follow the crowd.
There's always more to just the surface of anything.

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