Sunday, March 19, 2017

Making Motorcycles cost more - Singapore

Recently, with the government's attempt to reduce the Motorcycle COE prices to make smaller motorcycles more affordable, they created a tiered system to tax the motorcycles.

The current ARF will apply to motorcycles with OMVs up to $5,000. After that, the next $5,000 will be subject to a rate of 50 per cent, and the remaining OMV beyond $10,000 will be subject to a rate of 100 per cent.


On the surface for people who do not know about motorcycles, this looks like a good idea, however, if anyone actually met up with motorcycle dealers, riders and the distributors, this is a DISASTER.



So, most motorcycles WILL COST MORE.

The CB400 is simply a workhorse. If the machine price costs S$7000, with 50% for the $2000 above $5000, YOU WILL AT LEAST PAY $1000 more for a very common workhorse motorcycle which is one of the most reliable bikes.

So with COE today, this bike can be around $18,000!

And by the way, if you think this is ok, this motorcycle is around $10,000 in 2007

Looking at other motorcycle prices, The Yamaha T-max is considered a "luxury" Motorcycle because the motorcycle machine price is around $12,000

So the additional tax is $4,500 (for machine price of $12,000) so every Yamaha T-max 530 will cost $4,500 MORE



My Heritage Softail Classic, NOT EVEN a Luxury motorcycle has a machine price of $22,000 (OMV Price)

The motorcycle on the road back in 2007 is about $40,000 And today, it is $55,000.

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The government decided to charge motorcycles COE from $1 and more after 1994, and when they limit the number of COE for motorcycles, the price of the COE increased sharply.

FACT:

Motorcycles are not a luxury. It rains almost every week, and in Singapore, the weather is not predictable and you get caught in the rain more often than you plan.

The danger is real. There are a lot of bad drivers who do not check their blindspot. Recently, a van rammed 8 motorcycles on the BKE, killing 2. Whether you are riding a big bike or a small bike, you dies when you get hit hard.

Motorcycle do not really take up a lot of space on the road. During traffic jams, most motorcyclists do "lane splitting" and filter between the cars. This reduces the jam significantly as they are not part of the traffic.

Furthermore, it is a more efficient way of transport when most people travel alone and riding a motorcycle saves space and reduces traffic jams.

If you increase the price of new motorcycles, people who cannot afford to buy a new motorcycle will renew their COE and continue to ride, thus making the COE quota to decrease, and COE premiums to increase.

Singapore already has one of the most expensive cars in the world. This move will make motorcycles most expensive as well.

There is no such thing as a luxury motorcycle. Motorcycles are essential for delivery today in future business as eCommerce picks up. With higher motorcycle prices, delivery charges will increase and it will cause inflation.

Today, COE price is $7,483. It is the highest ever.

The finance minister did not solve the problem. He made it worse.

A small motorcycle like FZN150  costs $14,300 on the road, where a similar motorcycle costs $8,000 in 2007.

People who need to get places and CANNOT AFFORD cars, NEED to ride motorcycles. The public transportation system does not bring you to many places, and motorcycles is still a necessity.

WHY TAX PEOPLE WHO CANNOT AFFORD CARS BY CALLING IT "LUXURY MOTORCYCLE" which is simply a way to tax the poor more.

So sadly, Singaporeans and motorcyclists have to "eat it" and pay more again, while policymakers continue to make millions by not solving problems and using the only book they know.

"If there is a problem, charge more...."


-- Ironbowl





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