More owners hold on to older cars, spend more to maintain them amid high COE prices
As long as COE prices keep climbing, workshops will see more customers wanting their cars to run and look as good as possible, said observers.
Car grooming and servicing firms in Singapore are seeing brisk business, with at least one getting a nearly 60 per cent jump in customers over the past year.
SINGAPORE: Car grooming and servicing firms in Singapore are seeing brisk business, with at least one getting a nearly 60 per cent jump in customers over the past year.
This comes as more owners are holding on to their older cars, instead of buying a brand new one amid record high Certificate of Entitlement (COE) premiums.
They are also spending more to keep these vehicles running, or at least look new with fresh coats of paint.
CAR COE PREMIUMS HIT NEW HIGHS
Just five years ago, car COEs cost about S$25,000 (US$18,000).
Today, that price is more than four times higher for less powerful cars. For more powerful cars, the cost is about five times more.
In the latest tender on Oct 4, premiums for larger and more powerful cars in Category B rose to S$146,002, from S$140,889 in the previous tender.
Open category COEs, which can be used for any vehicle type but end up being used mainly for large cars, crossed S$150,000 for the first time, rising to S$152,000 from S$144,640.
On Sep 20, COE prices for larger cars in Category B and the Open Category topped S$140,000 for the first time.
For Category A cars, or those 1,600cc and below with horsepower not exceeding 130bhp, premiums closed at S$104,000, down from a record S$105,000 in the previous exercise.
OPTING TO HOLD ONTO EXISTING CARS
As COE premiums keep climbing, some drivers who bought their cars at lower COE prices are opting to hold onto them, instead of scrapping them and getting a new car.
Over the last few years, the number of drivers de-registering their cars has been falling.
In 2017, 80,788 Cat A and B cars were de-registered. This figure dropped to 24,938 last year.
Car workshops are also seeing more car owners bringing older cars in for servicing.
Alan's United Auto has seen a 30 per cent increase in customers requesting major servicing since the middle of this year. Such servicing includes engine, suspension or gearbox overhaul.
“It's a trend that more older vehicles are actually coming in to do major overhauls or have us check on the vehicle, rather than disposing of them once they find any issues with the car,” said Ms Khong Shi Jie, business administrator at Alan's United Auto.
“They're actually willing to pay more to make sure the car can still work for them for at least a few years, (while) they hope for the COE to drop.”
SPENDING ON COSMETIC SERVICES
Besides bringing their cars to workshops for the essentials, such as replacing filters, changing the brake pads or checking tyre treads, some Singaporeans are splurging on cosmetic services, including fresh paint jobs and installing custom parts.
With the increase in demand, Yap Motor Repair Service, which has one mechanic and 18 workers at its paint shop, has had to shift gears and refocus its business.
“There's a greater demand for cosmetics,” said Mr Keith Yap, business executive at Yap Motor Repair Service.
“Some younger generations of Singaporeans feel like (their) car is good to go, with another one to two years (of COE remaining, so they) might as well just spray a new colour, drive around and show (their friends and family),” he added.
“The car is going to get scrapped anyway. There's no point in doing major servicing.”
Major service centres are also seeing the same trend.
Cycle & Carriage Singapore has reported a 60 per cent jump in customers asking to visit their body and paint department compared to last year.
Senior manager Carmel Chua, head of service operations at Cycle & Carriage Singapore, said the company manages the increase in demand by ensuring that its workforce is upskilled through training sessions.
It also has a mentorship programme where seasoned technicians guide their less-experienced colleagues before they can work on a car on their own, he added. "Mentorship is critical in ensuring that we establish the maximum high-quality output."
Eurokars Services said that it is seeing customers spend up to three times more on refurbishing their older cars.
The company is retraining their mechanics to expand their skill sets.
“The next step is to further give our technicians opportunities to widen their job scopes,” said Mr Alvin Lee, senior body and paint manager at Eurokars Services.
“One of the initiatives is that we have some cross-divisional training that allows mechanics to be trained as a groomer to take care of our customers' vehicles, and this will eventually shorten the lead time for repair works.”
