Cab Drivers have it harder compared to counterparts from yesteryears. Getting a licence and knowing the roads are one thing, upgrading their skills and expanding their business is a whole different issue. Modern cabbies need to do their sums, put themselves out there through the identification of their target clientele to better cope with the demanding commuters as well as the stringent Government standards. The Taxi Association is trying to provide aid to their cabbies to help improve the taxi industry by suggesting new regulations to the LTA that include relooking the availability standards that require 70 percent of each operator's fleet to clock at least 250km a day and the introduction of a mediation system to help resolve the dispute between their drivers. The union also organises workshops to improve the cabbies’ health and well-being.
Yes it is tougher, but still not as tough as being a cab driver in London. To get there, they have to first possess a motorbike license so that they can spend hours riding through and learning the ...
Yes it is tougher, but still not as tough as being a cab driver in London. To get there, they have to first possess a motorbike license so that they can spend hours riding through and learning the streets. It's only after a stringent test requiring extensive geographical knowledge do they earn their right to be a cab driver.
The Singapore Sports Council has comfirmed that it will not carry on with the re-tender for the Changi Motorsports Hub site. The project has been axed after an extensive international and local market research deemed the concept unviable; potential investors may be turned off by certain conditions attached to the construction of the site. The conditions include the flexibility of lease terms and land use, as well as tax concessions.
There was 7 proposals from six consortia, with ideas that includes an FIA grade 2 or 3 circuit, a CIK graded karting circuit, a racing academy, a dragstrip, and bonded warehousing. To help reduce costs, a theme park, watersports marina, retail and F&B have been proposed.
The 41-hectare site set aside for the Motorsports Hub will be reinstated to authorities.
Like many other motorsports fans, I'm disappointed with this decision. It's a lost opportunity. Perhaps the government had an eye on costs if it were to step in to co-fund the project, but I always...
Like many other motorsports fans, I'm disappointed with this decision. It's a lost opportunity. Perhaps the government had an eye on costs if it were to step in to co-fund the project, but I always believed that building a motorsports hub is a worthy cause to pursue and would have aided racing talent development, not to mention provide a proper venue for enthusiasts to come together to fulfill their interests.
I am guessing the short land lease was a major factor in the developers' bid. It wouldn't be viable to invest a huge sum of funds if the financial returns are going to be limited. And if these costs were to be passed on to us, the patrons, I believe it will give motorsport a premium price tag and be prohibitive to most of us.
Sad news. We'll just have to head across the Causeway and spend our Sing dollars there then.
In the first weekend following the introduction of the cooling measures on the local car market, car dealers have observed a decrease in showroom traffic by around 50 to 80 per cent. Even as some dealers are offering sizeable discounts on their cars, fewer people were out making their rounds at showrooms – a clear indication that buyers are either holding back or have been priced out of the market completely.
The reduction of the maximum period for car loans from ten years to five, coupled with the limitation of the loan amount to either 50 to 60 per cent of a vehicle’s purchase price (depending on the car’s OMV), means that a greater pinch is now felt by prospective buyers who do not have sufficient amounts of cash in hand and thus require a large loan to finance the purchase of a car. Since the period of repayment for the purchase has shrunk, buyers are now looking at a bigger financial outlay within a short period of time.
A simple calculation for a car with a price of $150,000 including COE (and OMV of over $20,000) is shown below, assuming a fixed interest of 2 per cent per annum.
Car price: $150,000 (including COE)
for 10 years
for 10 years
for 5 years
Loan amount including interest at 2% per year
Total payment after 2 years (Downpayment + 24 instalments)
If a buyer took a 90 per cent loan over 10 years previously, he/she would have only needed to part with $15,000 for the upfront payment and $47,400 in total over the first 2 years. Now, he/she has to foot a downpayment of $75,000, and be able to set aside a total of $108,000 over the first 2 years to keep up with the instalments. For those who already have other financial commitments (such as a housing loan), it may be a beyond what they can afford from their monthly salaries.
Despite not being subject to the revision to the ARF structure, used car dealers have been affected badly too. Previously, they could count on a pool of customers who considered used cars as alternatives to new ones because of the high COE prices. While used cars may continue to be a better option for this group of buyers since they are comparatively cheaper and require a lower downpayment than new ones, the loan curb might still prove too prohibitive.
Fearing for a major slump in business, the Singapore Vehicle Traders Association (SVTA) has appealed to the Monetary Authority of Singapore (MAS) to consider easing up on the drastic measures. Their concern is understandably so, but it may not be easy to get the Government to change its stance so shortly after the changes were introduced.
Assuming they manage to ride out the current storm, used car dealers may face a further slowdown in the future. If most people are holding on to their cars as a reaction to the regulation changes, a big question mark hangs over how used car dealers are going to source for cars locally to sell. For now though, it is a matter of reducing what they have in hand first as they seek to avoid having too large a stock of vehicles stuck in their showrooms for too long.
It is still early days to predict what direction the automotive market will be headed to, but judging by the lack of showroom visitors over the weekend, dark clouds loom over it.
I guess we buyers have to take a wait and see approach. It is important to note that prices will definitely come down. But by how much? This still remains to be seen. The affordability of the car w...
I guess we buyers have to take a wait and see approach. It is important to note that prices will definitely come down. But by how much? This still remains to be seen. The affordability of the car will be hanging on this! *Crosses fingers
Motor-vehicle accidents have been making the headlines rather frequently in the past month, with the serious accident involving a lorry and a car along the PIE being the latest prominent example. Crashes involving large vehicles, motorcyclists, cyclists or pedestrians are often the ones with the most severe consequences, but that is not to say that car occupants are immune to the effects of heavy impacts. There have been about 20 fatalities on our roads in just the first quarter of 2013, the highest in any recent years. Can anything be done to keep the statistics in check?
It is easy to attribute speeding as a key factor in accidents. In fact, enforcement against motorists who exceed the speed limit has always been a measure employed by the Traffic Police to deter motorists from travelling too fast. We do not need to have a comprehensive background in physics to know that higher speeds result in heavier crash impacts. However, there are other elements which contribute to accidents. Understanding these factors will put us in a better position to minimise risks and reduce the likelihood of accidents.
Not all accidents are preventable. The sudden appearance of a sinkhole, or a large branch falling in front of a vehicle are instances of pure misfortune. But such incidents account for a very small percentage. Most accidents are avoidable in one way or another. I can think of three main factors which have a part in accidents: the vehicle, the environment and the driver.
We can think of the vehicle as the weapon of the crime, if accidents were to be likened to illegal acts (driving with the intent to hurt is one, by the way). Analogies aside, the vehicle is the object of any accident, and its features are points which we can look at while considering how to reduce accident risk.
The type and nature of vehicle is a good starting point for this discussion. 4X4s have a higher centre of gravity than sedans, which means that they have more chance of rolling over when a sudden directional change is executed. Heavy vehicles such as container trucks have a greater mass than passenger cars, hence they require larger stopping distances. Motorcar drivers must take this into account when filtering into a lane ahead of a heavy vehicle – be sure to give the other driver more leeway to slow down or stop when approaching a red light junction. As for the drivers of these heavy vehicles, they should exercise more caution and responsibility on their part because of the sheer size of what they are piloting.
Visibility is another factor which is related to the type of vehicle being driven. The larger the vehicle, the greater the size of its blind spots. As fellow motorists, we can make the job of heavy vehicle and bus drivers easier by minimising the time we spend in their blind spots.
Never underestimate the importance of tyres – they are the sole contact points with the road itself. Keeping them in good shape is therefore crucial. Tyres are one half of the equation which determines how much mechanical grip is available while cornering (the other half is the road surface). When the grip limit is breached, the vehicle becomes uncontrollable, and its path unpredictable due to sliding. How much the driver steers and the speed at which he is travelling are contributing factors. Hence, the safest formula would be to take a corner at a reasonable speed with an accurate steering input delivered to properly-inflated tyres, since there is not much we can do about the condition of the road surface. Staying within the grip threshold allows the driver to be in control.
If a vehicle is not properly maintained, it will become a moving hazard, especially when it comes to crucial components directly affecting the operation of the vehicle (such as brakes and steering). Ensuring that one’s vehicle is in a road-worthy condition is a basic responsibility of any motorist.
Over the years, cars have become safer. Equipped with features such as ABS (anti-lock braking system), ESC (electronic stability control), blind-spot assist and pre-crash mechanisms to reduce the severity of accidents, modern-day vehicles are much more advanced than their predecessors. Despite this, we must not let our guard down and depend solely on technology to keep us safe.
Apart from knowing the characteristics and limitations of one’s vehicle, being aware of the environment which the vehicle operates in is an added safeguard against accidents. Environment factors include the weather, traffic density and road design.
Wet weather poses a challenge to drivers in terms of reduced visibility and surface grip. If we were to drive at the same speed as in the dry, we will have less time and ability to react to unexpected situations, since braking distances are increased.
Next, traffic density is a possible factor for accidents. As of December 2012, the total vehicle population was 969,910 according to the LTA. Just a decade ago, the figure was 706,956. When there are more vehicles registered, there is a higher chance that more vehicles are out on the roads at a given time. More vehicles mean that there is less road space per vehicle (assuming the rate of new roads being added does not keep up with the rate of vehicle growth).
As more vehicles ply the roads, there will be a larger number of interactions between them. Given that there is effectively less road space per vehicle, drivers have to be more vigilant as we can no longer expect the roads to be as clear as before. The higher figures may translate into a greater likelihood of incidents, even if it is not a certainty.
Likewise, road design is a component of accident risk. Sharp corners, steep elevation, narrow lanes and junctions with limited visibility mean that drivers must proceed with caution. Sometimes, due to geographical limitations, it is not possible to change the layout of the road. So if the speed sign says 40, there is probably a good reason why you should take the corner at that speed or less (because of the tight radius and possibly limited visibility around the sharp bend).
Ultimately, it’s down to the person behind the wheel who has the largest role in many accidents. Tailgating, weaving in and out of traffic, driving too fast for the conditions and being inattentive are main causes for crashes. Reckless behaviours such as running the red light and drink-driving are the most serious among the pile. Defensive driving is thus the best policy to an accident-free motoring experience.
A common reason given by drivers involved in accidents is that it happened too close in front and there was nowhere else to go. I cannot say for sure that pile-ups are entirely avoidable, but leaving oneself with enough time to react to situations ahead often keeps one out of trouble. Even if everything looks okay at one point in time, circumstances can change at the blink of an eye, therefore it pays to adopt an anticipatory approach. A good driver doesn’t just look at what is in front of him/her – he/she is aware of what is going on around and behind, so that in the event of anything unexpected cropping up, the best possible escape route can be taken.
By being alert and careful in manoeuvring, such as checking the blind spot before changing lanes, a driver leaves fewer things to chance. It is essential not to make others take evasive action because you did not make an effort to read the conditions, and in the worst case, it could spark off a chain reaction (remember the accident where a motorcyclist swerved to avoid a taxi on Farrer Road, only for him to lose control and get run over by another car?). Attempt to switch lanes early and not wait until the last possible moment to cut in.
Speaking of being early, motorists can avoid rushing through their journeys by departing slightly earlier. When we rush, we tend to be less patient and take bigger risks than we would usually do. Our brain’s capacity to perceive dangers and react to them is affected because we have become so fixated on the goal of getting to our destination as quickly as possible. As a result, safety is compromised.
In my previous write-up, I discussed about the lack of a permanent motorsports facility in Singapore. Still that is not an excuse to use the streets as a place to get our fix of adrenalin, or to boast how powerful our cars are. Remember, speed gives you less time to react and increases the severity of accidents. Racing drivers can drive fast on the track because it is a closed environment. With other motorists, cyclists and pedestrians around, our roads are definitely not meant for this purpose. This is the type of driving which the authorities are clamping down heavily on, but it still happens as demonstrated by the accident where a biker was killed along Bukit Timah Road while allegedly racing with his friend.
All in all, as motorists, we have a heavy responsibility in our hands – just like what we were told upon passing our driving test. Accidents happen when we let our guard down and leave things to chance. So let us work towards making our roads safer by having a proper understanding of the vehicle, the environment, as well as ourselves.
Most of us might have speculated that COE prices would take a tumble after the new financial measures were introduced, but the outcome of the latest bidding exercise would no doubt have caught some observers by surprise.
It has been a while since COE prices for Category B (used to register large cars above 1.6-litres) fell below that of Category A (for smaller-engined cars). Category B closed at $58,090, as compared to $74,689 for Category A. I am guessing, if two people had tabled bids in the respective categories, Buyer B (with a Cat B COE) would have managed to get his Honda Civic 1.8 for a little less than what Buyer A paid for his Civic 1.6 (in Cat A). Sounds counter-intuitive, but such is the difference in price.
The price disparity is probably due to the stronger recent presence of continental makes in Category A, which could have meant that the bids were more aggressive than in Category B. A look at the number of bids received for both categories showed that 1,180 bids were submitted for the former, versus 1,028 for the latter. I suppose few in the industry would have expected such a low premium for Category B relative to Category A, which explains why the bidding for larger cars were rather conservative. Of course, there are other explanations for that, such as Category B buyers being more patient in the “wait-and-see” game as they are in less of an urgent need for a new car. Or it could be the effect of the higher ARFs for luxury cars.
So, while the Government has achieved its secondary goal of bringing down COE prices to lower economic inflation, the results of this exercise has also confirmed one of the worst fears for many lower-income and middle-class Singaporeans. A potential pitfall was that, all things being equal, the raft of measures would have been more favourable to the rich, since the less wealthy would be driven out of the new-car market because they could not fork out the higher downpayments required.
With Category B COE prices falling to a sizeable $16,000 below that of the Category A premium, the significance of this issue has been magnified. I can anticipate more members from the upper echelons to be thinking about entering the market for their first car or to consider upgrading their current cars, since they are not too affected by the loan measures and the rise in ARF is only a minor concern to them.
While I caution against reading too much into this round of results as it might be an anomaly, we could be headed for some dissent among members of the general society if the trend persists in the upcoming bidding exercises. The perception that cars are only for the wealthy may well be reinforced, and the class divide would represent a step backwards in our ultimate goal of creating a more equal society for all. However, market forces might restore the balance naturally as car buyers move their attention to where the real savings are and ponder about “upsizing” to Category B.
Perhaps other measures should have been undertaken to correct the vehicle market, but only time will tell whether this conjecture of mine is proven right. Policy-making is always tricky and often involves trial-and-error. This latest “experiment” might not have gone down too well in the report cards, though it is still early days as the industry is trying hard to steady itself as it rides through the waves of uncertainty. With that said, I shall reserve my verdict for now.
Local News: COE Results for March Round 1
"So, while the Government has achieved its secondary goal of bringing down COE prices to lower economic inflation, the results of this exercise has also confirmed one of the worst fears for many lo...
"So, while the Government has achieved its secondary goal of bringing down COE prices to lower economic inflation, the results of this exercise has also confirmed one of the worst fears for many lower-income and middle-class Singaporeans. A potential pitfall was that, all things being equal, the raft of measures would have been more favourable to the rich, since the less wealthy would be driven out of the new-car market because they could not fork out the higher downpayments required.
With Category B COE prices falling to a sizeable $16,000 below that of the Category A premium, the significance of this issue has been magnified. I can anticipate more members from the upper echelons to be thinking about entering the market for their first car or to consider upgrading their current cars, since they are not too affected by the loan measures and the rise in ARF is only a minor concern to them."
let's face it: cars here ARE for the rich; they are not meant to be "affordable" to everyone, considering that a Civic costs half an HDB flat
14 Mar 2013
Thumbs up! For the recent Govt measures on car ownerships! In SG, all has equal chances to make their own living, owning a car will give a new sense of achievement to those who worked smart & hard ...
Thumbs up! For the recent Govt measures on car ownerships! In SG, all has equal chances to make their own living, owning a car will give a new sense of achievement to those who worked smart & hard for it!
Likewise in HK, most commuters are taking public transports except for the elite ones & those slightly above average income earners
First, it was the high COE prices. Now, it’s the 50 per cent loan cap and higher ARF. Having one’s own set of wheels may well be a dream too far for many. Especially for car enthusiasts like me, it is an added blow to see our dreams go up in smoke. I used to think that if I can save up enough over 5 years (assuming I live on a diet of porridge and instant noodles), I would be on my way of achieving my goal of owning a car. As COE premiums breached the $80,000 mark, I had to adjust my goal a little farther. But then came the killer blow which meant that I have no choice but to postpone it indefinitely. Only Santa can make my dream a reality now, by leaving a car with my name in the driveway, though I have to wait till Christmas for that.
At what cost, for a car?
Recent reports in the media have highlighted the real cost of owning a car throughout an adult’s lifetime, putting the price tag of owning a humble 1.6-litre sedan for 50 years at a whopping $1.6 million. For people who are using it as an attempt to console themselves of their evaporated dreams, may I just point out that this is a natural defence mechanism – a coping strategy adopted in response to a piece of news which is hard to swallow. However, I would like to challenge this thought.
I believe motorists (and potential buyers) are already aware that we, Singaporeans, are paying a rather hefty sum to buy, operate and maintain our cars – it is not a sudden revelation. Next, not everyone owns a car from the age of 25 to 75, so we may be overestimating the figures if we assume that this is the longevity of our membership in the exclusive vehicle owners’ club. If I were to rope in statistics that 1 in 4 households owns a car, perhaps it is not so exclusive after all. Nevertheless, it brings us nicely to my next point: not everyone shoulders the financial burden of car ownership alone, since the costs (and benefits) are often shared with a spouse or among a larger family. Hence, I found it slightly amusing when the press and common man on the street are riding on the wave to “make sense” of ploughing massive sums into the purchase of a car, patting themselves on the back and saying, “It’s alright, I probably can’t afford it anyway, so it doesn’t make a difference.”
If the policy-makers had intended for this effect, then they have achieved it well. However, buying a car has always been more of a luxury than a necessity for most of us. As such, the rationality of it all may not be as comparable to, say, that of a house. Therefore, trying to make sense of a purchase which is not entirely rational would be like trying to explain why you went for a piece of premium-grade beef (a car) costing $100, when a $30 T-bone (public transport) would have filled your stomach sufficiently (gotten you from point A to B).
Why I (still) want my set of wheels
Despite the convenience of public transport as what our Government highlights to us, I still aspire to own a car. No need for something flashy – I would be happy with a decent hatchback. There is the time-proven perception that a car is a status symbol, and yes, what better way to show that you have made it in life? But bragging rights does not matter to me. It is more of the freedom associated with a car that appeals to me. With a car, I can stay out late with friends without worrying about the last bus or train home (I am sure this echoes the voices of my peers in their 20s). Trains do not operate round the clock, and the rout coverage of night buses can still be improved.
Also, there are times where one wants to head for a picnic at East Coast Park and it just does not make much sense to lug around a large cooler box of drinks and another handful of plastic bags all the way from Jurong West (for example), by bus and train. There is always the option of a cab, though a round-the-island trip can cost you dear if you have others to pick up along the way. One might ask, how often do you go for picnics? Not everyday, but it can be a bit of a hassle to rent or borrow a car, given that one has to first make his/her way to the pick-up point and return it after use. Alright, I admit, these are just weak excuses to justify my love for driving. Is there anything wrong for enjoying being behind the wheel?
Considering others who may need a car more than me
So, it may be just a matter of forgoing a bit of convenience (and perhaps a little part of me as a car enthusiast) in my case, but what about others who have a greater need for a set of wheels?
Having a car can reduce travelling time significantly and make it much easier for families with dual-income parents, school-going children and grandparents who are getting on in age. The same applies for working adults whose occupations require frequent travel. As much as transport planners are trying to reduce the gap between public and private transport, an estimate from my personal experience is that travel time on buses and trains is at least one-and-a-half times that of a journey by car – you can work out the difference there.
Besides, housing regulations dictate that HDB flat owners have to reside in their properties for at least 5 years before they are allowed to sell their homes and move to another location. Frankly speaking, do that many of us stay in the same work location (or job) for that long? What if we have to travel from one end of the island to the other? Would you prefer leaving your house very early in the morning to make a long commute over having a car? I do sincerely hope that with the new MRT lines and bus routes, this is alleviated for many.
Putting things into perspective
Granted, there are alternatives to car ownership, such as leasing or joining a car-sharing club. And these might well be the only viable options for the group which has just been squeezed out of the car market. (I think I belong here.)
Perhaps the only realistic way that I can get behind the wheel of a three-pointed star regularly is to get my Class 4 license so that I can drive a Citaro bus. Or wait till I’m 30 and apply for a taxi vocational license to drive an E220 CDI cab. Or, if I really want to, splurge a little for a day of fun around the Sepang circuit up north in Malaysia.
I am staying optimistic since I still have the abovementioned options open to me, so I believe you will be able to as well! I mean, how bad can it be?
Showroom traffic takes a hit as buyers stay away
Dazed and Confused
Budget 2013 Aftermath
Budget 2013: What now?
The Second Minister for Home Affairs, S. Iswaran, has announced several new initiatives to improve safety on the roads through increased enforcement and education for motorists. This comes after an increase in the number of traffic offenses committed last year, up from 316,214 in 2011 to 327,503 in 2012. Apart from more motorists being caught speeding and running red lights, a spate of high-profile accidents involving heavy vehicles has also prompted the authorities to step up efforts to protect road users.
The new initiatives include:
- Increased surveillance by enforcement officers
- More red light and speed cameras to be installed, with existing ones being upgraded
- Additional demerit point for offences within school zones
- Compulsory Expressway Familiarisation Ride course for new motorcyclists
- Voluntary Safe Driving Course for drivers with demerit points
Unveiling the new Safer Roads Singapore strategy in Parliament, Mr Iswaran declared that there will be an increased presence of Traffic Police officers on the roads with 70 more officers being deployed, bringing the total patrol strength to 210. The number of red light and speed cameras installed across the island will rise from 240 to 300 by the end of 2014, with existing cameras being digitised so that summons can be processed faster.
A tougher stance has been adopted against reckless driving within school zones, with the Ministry of Home Affairs (MHA) punishing motorists with an additional demerit point if offences are committed within zones marked by the distinctive red textured surfaces and ‘School Zone’ signs. The extra demerit point could cause a new driver on probation to have his licence revoked, as he would be slapped with 13 demerit points instead of 12 for running a red light within a school zone.
Besides increased enforcement efforts, the Traffic Police is aiming to improve education for motorcyclists and drivers by offering relevant courses to them. All new motorcyclists will have to attend a mandatory Expressway Familiarisation Ride course from June this year. Previously, the course was optional for new Class 2B licence holders.
A new Safe Driving Course has also been introduced by the Traffic Police. Targeted at offenders who have accumulated 12 or more demerit points, the voluntary course aims to correct unsafe road habits. Participants who have successfully completed it will have 3 demerit points deducted from their record.
I think more can be done to increase passive safety systems on roads and on training new drivers. Focusing on penalties and disincentives is only one way at looking at the problem. Perhaps we can l...
I think more can be done to increase passive safety systems on roads and on training new drivers. Focusing on penalties and disincentives is only one way at looking at the problem. Perhaps we can look into more visible lane markings. This is felt especially on rainy days, and we know we have many, when a driver can't even see the line markings. Or make the driving syllabus cover more extensive real world driving to help new drivers adapt better to going on the road and raising overall skill and expertise level of the average driver.rnrnWe can all do better to make the roads a safer and less stressful place.
I agree with you. Accidents are caused by three main factors: the driver, the environment and the vehicle. Improving road designs to minimize accident 'black spots' would help, and so will technolo...
I agree with you. Accidents are caused by three main factors: the driver, the environment and the vehicle. Improving road designs to minimize accident 'black spots' would help, and so will technology to make cars smarter and safer, but ultimately the one deciding factor lies with the driver.
Ideally, we can achieve a higher level of safety by training/education. However, not all the messages are driven home, and there will be a group of irresponsible drivers who give the majority of law-abiding drivers a bad name, hence punishment seems to remain a necessary part of policy. Think about it, we also get penalized heavily in our insurance premiums when an accident happens, but when we keep a clean record, the reward (no-claim discount) is relatively smaller.
I agree with both of you. The education has to start with at least during the basic theory curriculum. There are issues like giving cyclists/pedestrian space and slowing down at the school zones is...
I agree with both of you. The education has to start with at least during the basic theory curriculum. There are issues like giving cyclists/pedestrian space and slowing down at the school zones isn't stressed, at least during the time I had my driving license.
Following calls from several Members of Parliament (MPs) to review the recently-introduced curbs on car loans, the Government has reacted by launching several initiatives to ease the burden of certain affected groups.
Exemption from car loan measures for the physically disabled
Physically disabled persons or their caregivers (who are either living at the same address, are immediate family members or are appointed by the court) will be allowed to purchase one car without being subject to the restrictions.
Used car dealers to get extension
The Land Transport Authority (LTA) has given used car dealers some reprieve by extending the temporary transfer scheme from 9 months to 1 year. This gives dealers a longer period of time to find buyers for the cars they own, and helps them adapt to the new loan regulations.
Depreciation to be taken into account in calculating loan limit
The Monetary Authority of Singapore (MAS) has announced that it will take into account depreciation when calculating the Open Market Value (OMV) of a used car to determine which tier the vehicle falls under with regard to the loan-to-value ratio.
In a press release, the MAS said that it “will adopt a straight-line depreciation in the value of the original OMV over 120 months (10 years) to derive an applicable OMV for purpose of determining the appropriate loan-to-value ratio.”
This may make a difference for cars with an OMV in excess of $20,000. If purchased as a new vehicle, the loan limit will be capped at 50 per cent. However, with this new ruling, should the applicable OMV for the car (after depreciation is factored in) fall below $20,000, buyers will be able to apply for loans of up to 60 per cent of the purchase price.
Justifications for the tightening of finance regulations
In his round-up speech for Budget 2013, Deputy Prime Minister Tharman Shanmugaratnam explained that the new measures are aimed to relieve inflation. Beyond encouraging financial prudence among buyers, the secondary goal was to cool the COE market and bring prices down. However, he mentioned that the changes are not permanent and will be reviewed later.
The Government is also moving to close loopholes of the new loan restrictions, since credit companies which are not regulated by the MAS are not affected by the changes, unlike banks and finance houses.
Budget 2013 Aftermath
Budget 2013: Motoring Implications
As we gear up for the start of the new Formula One season this weekend, I would like to focus my attention on the hearts of the machines. 2013 has an added significance because it will be the last season featuring the 2.4-litre naturally aspirated V8 engines which the teams have been running for the past seven years. From 2014 onwards, 1.6-litre turbocharged V6 engines will supersede their larger counterparts, hence this season represents the last chance for us to savour the unique engine note of those eight-cylinder powerplants.
You might wonder, what’s all that hype about engines? For discerning petrolheads, the roar from the exhausts gives rise to our adrenalin rush. Some say it sounds even better than a chart-topping hit performed by a pop diva. When I first started watching F1 in 1999, I was fascinated by the high-pitched shrieks characteristic of the 3-litre V10 engines back then. Unfortunately, at the time of the inaugural Singapore Grand Prix in 2008, the teams had already made the switch to the V8s (which are still good sounding, albeit in a different way). Therefore, we never really had the chance to hear the V10s ‘live’ at the Marina Bay Street Circuit. But I am telling you this: if you want to catch the vocals of the 22-strong choir of V8s for the final time, grab yourself a ticket for this year’s race. As much as the manufacturers will try their best to make the new V6s sweet-sounding, the loss of two cylinders will no doubt alter the engine note somewhat.
2013 also marks the sixth iteration of the Singapore Grand Prix. The local motorsports culture has made some headway since we first welcomed F1 to our shores, however, the lack of a permanent motorsports facility till this day is something which enthusiasts (including myself) lament. We were supposed to have the Changi Motorsports Hub up and running, but the plans have stalled since the consortium behind the project ran into financial difficulties. Regrettably, efforts to revive the grand scheme were half-hearted, leaving petrolheads here without a dedicated venue to satisfy their need for speed safely. It’s been years since we last had carpark rallies near the old National Stadium in Kallang. Surely, traffic-light grands prix is a poor and dangerous substitute for a permanent drag strip. If there is any consolation, it will come in the form of recent news about a temporary karting track being planned at the Changi site.
It’s not all about the noise though. Motorists enjoy many benefits from the world of F1 too. The fuels we use are tested in these mean machines (not to mention that we get a free upgrade to V-power from 98-octane petrol as offered at Shell kiosks during race weekends). As teams and manufacturers push the frontiers in the sport defined by cutting-edge technology, we see bits of their know-how being applied to our road cars (think components such as tyres, wheels and brakes).
So while we watch Vettel and company wrestle for the championship, let us not forget how Formula One has contributed to our local motorsports arena, as well as to the car industry and motorists in general. By the way, it has also unearthed the potential of some of our taxi drivers who are inspired by their idols on the grid – how often have we heard others making references such as “he drives like an F1 driver”? Granted, I do not endorse such antics that endanger the lives of others on the roads. Drive safely, everyone!
Many expected that the Government would announce changes to the COE system, following a wave of public feedback and assertions by several Members of Parliament that it was under review. However, it was the new measures unveiled during the Budget 2013 that caught everyone in the automotive industry by surprise, with the revised Additional Registration Fee (ARF) tiers and the limit of bank loans leaving buyers and dealers with an air of uncertainty.
How has the landscape changed?
Up till the previous bidding exercise for COEs, the ARF was tagged at 100% of a vehicle’s Open Market Value (OMV). Now, buyers of cars with OMVs greater than $20,000 will have to fork out a higher ARF consisting of a component which is subjected to up to 180% of the OMV amount beyond the first $50,000.
With immediate effect from 26 February 2013, the maximum tenure of bank loans for new and used cars has been reduced to 5 years, down from the previous period of 10 years. Furthermore, the maximum credit limit has been capped at between 50 to 60 per cent of a car’s total price, depending on the OMV of the vehicle concerned. A more detailed breakdown of the changes can be found in the links at the foot of this article.
What are the reasons behind the changes?
From Big Brother’s point of view, the changes help boost the tax revenue collected from vehicles, make the upper class of society contribute more to taxes, and send a message to car buyers to purchase within their limits by not taking up bigger loans than they can afford. Without needing to do anything to tweak the COE system, these new measures will cool demand for new cars and affect COE prices as a side effect. Hence, it kills two birds with one stone.
Bumpy ride ahead for businesses
Apparently, the headcount of the winged creatures being hit by the stone turns out to be more than two. On the business side, both new and used car dealers are facing a bumpy ride ahead, because it will be harder to shift cars which cost more upfront. Car rental firms may welcome more customers as they find that renting or leasing would be a less prohibitive option than owning a car, though when it is time to replace their fleet, they would not be able to avoid the higher costs eventually. Banks will see their window of opportunity to earn interest from loans narrow down, but they can and will respond by hiking interest rates.
Perhaps the group which is hardest hit is the car buyers themselves. As always, the ones with the cash to splash (as well as those who do not and therefore require large loans) bear the brunt of any new measures being implemented. One would now require deeper pockets than before to finance the purchase of a car, especially for first-time buyers.
To afford the 50% downpayment of a mid-range car costing $200,000, one is looking at a princely six-figure sum as upfront payment. I don’t think many of us have that kind of cash in our bank accounts. Even for the entry-level buyer who is looking at a car costing half as much, $50,000 is no small sum to cough up, not forgetting that we have other expenses to settle with our paychecks.
On the other end of the market, where buyers are wealthy enough to pay for the car in full without requiring a bank loan, the increased ARF would mean a higher outlay for a premium car. This can go as high as $300,000 extra for a million-dollar supercar.
What is means for buyers as a whole is that cars are now less affordable to the masses given the higher barriers of entry into the exclusive ‘ownership’ club.
ARF: Higher initial tax, higher rebate at the end of lifespan
However, there’s a silver lining to the cloud. Given that car owners receive a PARF (Preferential Additional Registration Fee) rebate when they deregister their cars, paying a higher initial ARF means that they will receive more in return when they relinquish their cars. I am going to use two cars as examples to illustrate my point.
Volvo S60 T4 with OMV of $31,981
Original ARF: $31,981
New ARF: $36,773
Additional outlay: $36,773 - $31,981 = $4,792
PARF rebate if deregistered before 5 years: 75% of ARF
Previous PARF rebate at 5 years: 0.75 X $31,981 = $23,985.75
New PARF rebate at 5 years: 0.75 X $36,773 = $27,579.75
“Additional” PARF rebate received at 5 years: $27,579.75 - $23,985.75 = $3,594
Nett Additional outlay for 5 years: $4,792 - $3,594 = $1,198
PARF rebate if deregistered at 9.5 years: 50% of ARF
Previous PARF rebate at 9.5 years: 0.50 X $31,981 = $15,990.5
New PARF rebate at 9.5 years: 0.50 X $36,773 = $18,386.5
“Additional” PARF rebate received at 9.5 years: $18,386.5 - $15,990.5 = $2,396
Nett Additional outlay for 9.5 years: $4,792 - $2,396 = $2,396
BMW 730Li with OMV of $74,365
Original ARF: $74,365
New ARF: $105,857
Additional outlay: $31,492
PARF rebate if deregistered before 5 years: 75% of ARF
Previous PARF rebate at 5 years: $55,773.75
New PARF rebate at 5 years: $79,392.75
“Additional” PARF rebate received at 5 years: $23,619
Nett Additional outlay for 5 years: $7,873
PARF rebate if deregistered at 9.5 years: 50% of ARF
Previous PARF rebate at 9.5 years: $37,182.5
New PARF rebate at 9.5 years: $52,928.5
“Additional” PARF rebate received at 9.5 years: $15,746
Nett Additional outlay for 9.5 years: $15,746
In summary, it means that you actually don’t pay the full difference in ARFs (new versus old) after you receive your PARF rebate. So while it may appear that you are paying $31,492 more for the BMW, in fact, once you deregister the car at 5 years, you receive $23,619 more in rebates, meaning the actual additional cost to you is $7,873 over five years. The longer you keep your car, the more you pay. Think of it as an added component to the annual depreciation, or as increased road tax.
Credit measures that hit the hardest
As seen for the above calculations, the revision of ARF rates is actually the lesser evil of the two changes in my opinion. While the bank loan restrictions may not affect the affluent, the impact would surely be felt by many buyers from the middle-class. They would now have to either put their dreams of a new car on hold, or find alternatives such as used cars or rental cars. Existing car owners may delay plans to upgrade or change their cars, preferring to hold on to their current rides until the COE tenure is up. Hence, we may well see an ageing vehicle population in the coming years.
Lower COEs in the coming months?
Nevertheless, as buyers adopt a ‘wait-and-see’ approach, COE prices in the next tender might fall, opening up the avenue for a group of upgraders and prospective buyers to enter the market. Question is, by how much? This is what everyone’s attention will be on.
Why did the Government not wait until a General Election to roll out this drastic measure and see how voters respond???
2 Mar 2013
Announcing this new measure at such a crucial period will be risky for them.
4 Mar 2013
Can't help thinking that they used this ARF to reduced the number of cars on the road since they can't scrap or alter COE system. In theory, higher ARF also means higher de-reg value, so the rich s...
Can't help thinking that they used this ARF to reduced the number of cars on the road since they can't scrap or alter COE system. In theory, higher ARF also means higher de-reg value, so the rich still 'benefits' from it and the average Joe still can't reach it.
The Singapore Civil Defence Force (SCDF) is exploring the possibility of using a training simulator to enhance response to road accidents. It plans to develop a system which allows various scenarios involving different types of vehicles and levels of damage to be programmed, with an eye on improving the process by which its officers handle emergency situations. This seeks to eliminate some of the constraints encountered in training programmes presently.
The intended system will allow participants undergoing training to physically operate rescue equipment within a virtual environment. If implemented, the SCDF is likely to be a pioneer in this field. By being trained to deal with different scenarios, it is hoped that rescue officers will possess better assessment and decision-making skills, speeding up rescue operations and therefore improving the survival chances of casualties involved in serious accidents.
Of late, the benefits of installing an in-car digital video recorder (DVR) have been underlined, given a spate of high-profile incidents captured on these devices. However, the popularity of DVRs has prompted more food for thought, especially with regard to its implications on driver behaviour.
The good: Handy helper in difficult situations
Motorists have been feeling the pinch of costly insurance premiums. Among any population of drivers, there is always the subset of safer pilots. While one would expect them to be involved in the least number of incidents, sometimes they do end up with the shorter end of the straw, losing their no-claim discounts (NCDs) even though nothing could have been done on their part to prevent a collision. An inherent advantage of DVRs is that the footage captured can serve as evidence in the event of an accident, clearing the innocent party of wrongdoing and protecting his/her NCD.
Apart from safeguarding the interests of the driver who purchased it, a DVR can also come to the rescue of others when a crash has been recorded by chance. The infamous accident where a lorry sideswiped a motorcycle on the PIE is still fresh in our minds. Furthermore, video recordings aid accident investigation and speeds up recovery time- they eliminate the need to note down the process of events in words.
Hidden advantage: Private eyes watching you
The indirect benefit of widespread installation of DVRs comes in the form of heightened citizen surveillance. Motorists are now subjected to public scrutiny through these ‘invisible eyes’. Previously, “forgive and forget” was a common mantra, since there was no way to obtain proof that an inconsiderate motorist had incurred one’s wrath through a piece of poor driving. Now, if someone drives rashly and it happens that the other vehicles passing by are equipped with DVRs, he/she can expect to be in for a tsunami of online criticism. The prospect of legal punishment is a yet another factor which might deter motorists from dangerous driving. Only few clicks are needed before a video is uploaded for everyone to see. Armchair critics are in for a field-day.
The bad: Instilling a false sense of confidence
However, all is not as simple as it appears. Just over a month ago, I had a close encounter on a ride home in a cab along South Bridge Road. Ahead of us, two vehicles were stationary on the second lane from the right. Apparently, another taxi had caused a car behind it to come to an abrupt stop after a passenger flagged for it. The driver of the cab which I was on filtered to the extreme lane and maintained his speed, only applying his brakes when the other taxi nearly swerved into us. All the passengers on board had a big scare, but my cab driver remarked in Mandarin: “No worries, I have everything captured in this if there is an accident”.
As demonstrated by this incident, it seems as if having an in-vehicle DVR could give drivers a false sense of confidence and encourage risk-taking behaviour, even though defensive driving would have reduced the likelihood of any accidents in the first place.
The ugly: Breeding a ‘self-before-others’ mentality
Here’s a thought experiment: What if a driver whose car is fitted with a DVR carelessly collides with a cyclist on a quiet road late at night? The very tool that is supposed to help him has turned against him. It is now of his interest to delete the video clip. Presently, there is no legal obligation for drivers to make the recorded footage available to other parties when an accident happens. Ethics come into play, and not everyone may own up to their mistakes. Also, if a DVR records an accident where the driver of the vehicle of which it was fitted to was at fault (and the other parties involved do not have DVRs), the onus is on him to surrender the incriminating evidence. Could it be that it will soon put motorists at a great disadvantage if their vehicles are not equipped with a ‘third eye’?
Personally, I would not want the situation to go down the road where a ‘me-first’ mentality takes precedence. Instead of sharing information for the greater good of all road users on a whole, everyone’s primary goal is fixated on protecting himself/herself.
Conclusion: A double-edged sword
All in all, the trend of installing DVRs on vehicles comes with drawbacks besides its distinct advantages. Just like when the Internet first became available to the masses, it has opened a potential can of worms. The need for proper measures to safeguard the interests of vulnerable parties is an urgent one. Yet, it remains tricky to tread the thin line between what is private and what isn’t.
Renault’s family sedan has been given a makeover, three years after it was originally launched. First unveiled at last year’s Istanbul Motor Show, the latest version of the Fluence features Renault’s new styling identity, with LED daytime running lights and the reworked grille giving it a dynamic and modern look. This brings it up to date with its siblings such as the Twingo and the Clio.
On the inside, the 2013 Fluence gets a new digital instrument cluster and interior trim. It is also equipped with Renault’s R-Link multimedia system, which integrates navigation, radio, hands-free mobile phone connectivity and audio streaming.
Besides the styling tweaks, the Fluence also receives a more powerful drivetrain consisting of a 115bhp 1.6-litre engine mated to an X-tronic CVT transmission, improving performance and responsiveness while keeping fuel consumption and CO2 emissions low.
The Renault Fluence prides itself as one of the biggest in its class. With a wheelbase of 2,702mm, passengers can enjoy their journeys in plenty of comfort. A large 530-litre boot makes the Fluence a hugely practical car, while a generous standard equipment list should appeal to buyers.
The 2013 Renault Fluence is now available for booking. First deliveries are expected in the fourth quarter of the year.
Renault Fluence ZE Road Test
Renault Fluence 1.6 Road Test