CERTIFICATES of entitlement (COE) took a heavy tumble at the latest tender on Wednesday, with the premium for bigger cars diving to just $200.

The impact of worsening economic sentiment brought all other premiums to new lows, barring the occasional freak result.

COE for cars up to 1,600cc, which make up the bulk of certificates auctioned each fortnight, closed at $2,693 - half its previous value.

Before hitting $200, the COE for cars above 1,600cc was $3,089.

The Open COE, which can be used for any vehicle type but ends up mainly with car buyers, collapsed to a record low of $3,200.

Demand for commercial vehicles has also softened as businesses hold back on new purchases in light of the severe slowdown. The COE for vans, trucks, lorries and buses sank to $2,900, also one of the lowest ever.

The motorcycle COE finished at $900 - the first time it has gone below $1,000 since March 2008.

The collapse came just a day before Thursday's Budget, which many expect will unveil measures to contain cost and bolster confidence.

Motor traders reckon the market could worsen after Chinese New Year.

Singapore Vehicle Traders Association president Mr Neo Nam Heng said 'the COE system is on the verge of collapse.'

'Let's hope that demand can still exceed supply until the new reduced quota is released in April,' he said. 'A collapse will be detrimental to government revenue.'