$2 COE

I love that. Too bad i not buying cars.

But what i so love is how people fail to understand what exactly COE is. Read the forums and you will be so amused.

Firstly, the COE does not affect the value of your car. COE is a RIGHT to drive that particular car. A low COE will not mean lower future value. On the contrary, when your car is placed alongside other similar models, it is at an advantage because your cost of purchasing the car is low. Hence, low COE is always good.

Secondly, the car market is a strange place. How dealers work is that they will refund you the difference between the COE and the rebate level. When you look for cars, there will be a rebate level. That is the COE price they expect to pay. If the COE fell below that price, they will refund the difference. If it is above, the dealer will make good the difference, though exactly how much is not clear.

FInally, the government is not able to control the prices of COE. COE is merely the right to drive on the road. Demand and supply of such rights will determine the true value of the COE. Yes, the government can reduce the supply, but this is on hindsight. If they restrict the COE by too much, there will complaints that the COE is too costly.

At the end of the day, COE is about purchase of rights to drive on the road. It makes no sense to blame anyone except the free market about the prices, because the market will ascertain the optimal for that period, dependent on demand and supply.