With the bumper crop of COEs to be released,
                 industry experts advise buyers to get in ahead of
                 the open bidding as prices will soften a little

                 By KARAMJIT KAUR

                 WANT a new set of wheels? This is the time to visit
                 the showrooms and pick one out, say experts.

                 Don't wait too long. When open bidding starts in the
                 third quarter of the year, it is anybody's guess how the
                 market will move.

                 The recovering economy will also fill pockets and
                 push prices up. So, get ready to make your buys
                 between next month and August. April is when the
                 first batch of certificates of entitlement (COEs)
                 released will be put up for tender and August is a
                 month or two before the expected introduction of
                 open bidding for COEs on a trial basis. Industry
                 experts and car dealers, reacting to the news about
                 the bumper crop of COEs to be released in the next
                 quota year, said that while prices were not expected
                 to crash with the huge supply of COEs, they would
                 soften a little.

                 In all, 109,452 COEs will be up for tender for the
                 year beginning in May until April 2001.

                 This is a whopping 61 per cent more than the 68,191
                 COEs released in the last quota year.

                 When he announced the quota size in Parliament on
                 Friday, Communications and Information Technology
                 Minister Yeo Cheow Tong said it would be much
                 larger than before because many people were
                 expected to deregister their vehicles next year.

                 Mr David Tay, president of the Motor Traders'
                 Association, said: "With open bidding, the tender
                 exercise will be done fortnightly, instead of once a
                 month.

                 "Although the quota is the same, when you split it and
                 if demand picks up, prices will go up.

                 "There will also be a lot of uncertainty with the new
                 system.

                 "That's why people who want to buy cars should do
                 so now and not wait until the third quarter."

                 It is also a good time to buy because of low interest
                 rates.

                 For a seven-year loan, the rate is less than 3 per cent,
                 compared to 3.5 per cent before.

                 The stronger US dollar and yen may raise the vehicle
                 import price, but the effect will be marginal, said a car
                 dealer who did not want to be named.

                 "This is because the COE accounts for about 30-40
                 per cent of the cost of picking up a vehicle," he said.

                 While car dealers were ecstatic about the COE
                 quota, some were surprised.

                 A few had expected the Government to redistribute
                 excess COEs to the following year to prevent sharp
                 fluctuations in the quota size.

                 Dr Winston Lee, a motoring expert, suspected that
                 the proposed release of the COEs at one go was a
                 deliberate move.

                 He said: "With open bidding, the tendency will be to
                 bid higher. On the other hand, more COEs will ease
                 prices a little. This will help counteract any increase
                 from open bidding."

                 The open-bidding system will mean greater
                 transparency and better access to real-time
                 information on the bidding exercise.

                 In such a system, bidders state a reserve price, the
                 maximum they are willing to pay. They can also track
                 prices submitted by other bidders.

                       Adapted from The Straits Times, 12 Mar 2000.