Why bankers love high COEs...

Singaporeans have gone mad, at least when it comes to paying for a new car. When this headline below came out last year, I thought -- wow! -- surely the COE quantum (the premium for a certificate one or one's car dealer has to bid for to get the "privilege" of buying a car) will start to level off...

After all, when I bought my little Suzuki Swift Sport in September 2010, the COE was already at a then fairly high $33,089. All in, I paid just under $70,000 for the 1600cc car (all cars under 1601cc are informally labelled "small cars", regardless of their actual size).

Well, just today, the newspapers showed that Singaporeans will pay the sky for their cars:

I have previously written an article in The Sunday Times showing how a COE can be obtained for just $2, if only people would "connive" to make it happen (the authorities actually are quite helpful here, providing real-time updates so you can match your bid to the actual number of available COEs).

I won't go into the details here of how it can be done, but suffice for me to say that it has happened before, ie, COEs for small cars went down to $2 in November 2008 (see my blog entry on Nov 3, 2010).

At current COE premiums, my little Suzuki -- if it were new -- would have to be priced at a six-figure sum. What I want to say here is that the only people who truly benefit from such ludicrous COEs are the banks happily dishing out their car loans. It gives real meaning to the phrase "Laughing all the way to the bank".