The rise in COEs and vehicle prices is a result of a volatility skewed and opportunistic pricing due to the reduction of the COEs issued monthly. This pricing scourge is not an anomaly with any need to call for action.
The COE pricing band widens because the government is controlling the car population and COEs. With the free float pricing mechanism for COEs, the prices will tend to settle northward with a limited COE quota. The broad implications using pricing as a tool to control congestion will only lead to higher prices and a resultant smoother traffic flow.
Personally, I do not anticipate a straight line escalation of prices or expect wild fluctuations or rapid appreciation of the COEs. There is a secondary used car market to meet the demand of car owners. There should not be any campaign against the current free float pricing policies. Let the market decides the prices as it will settle at a level where price meets aspirations to own a new car.
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