With the year end bonus to be received by workers next month, demand for new cars will rise significantly.
Cat A
COE will most likely rise to $72,000 at least while Cat B will likely rise to $75,000 at least in the first Dec bidding. In the 2nd Dec bidding, Cat A will likely rise further to $76,000 while Cat B will rise to $80,000.
By Dec 2015, Cat A should rise to $90,000 while Cat B should rise to $95,000.
Cat A and Cat B COEs reached $90,000 plus in Jan 2013 and this should be achieved again soon.
The high demand for new cars are due to many factors such as:
1. 100,000 current car owners changing to new cars in 2015.
2. Another 100,000 current car owners changing to new cars in 2016.
3. Rise in salaries over the last 10 years. A dual income family would have witnessed a big increase in their household income over the last 10 years.
4. Rise in property prices over the last 10 years which allows many families to flip their BTO flats and make profits of at least $150,000 or more.
5. Young graduates earning more over the last 10 years.
6. Increase in population and aspiring car owners.
7. NEW cars are STATUS SYMBOLS.
8. Many families owning more than one car. Many have two cars while others can have 3 or 4 cars in a household.
9. Cars as a percentage of family's wealth is now smaller. 10 years ago, a family's net worth could be $500,000 and a $100,000 car is 20% of net worth. Today, the family's net worth could rise to $1m and so the $100,000 car is only 10% of net worth so it is more affordable.
10. Cars as a percentage of household income is now smaller. 10 years ago, a family's household income could be $50,000 pa and the $100,000 car is 2x annual income. Today, the family's household income could be $100,000 and the $100,000 car is only 1x annual income. So cars are becoming more affordable today.