Certificate of entitlement (COE) premiums ended mostly higher at the latest tender yesterday as renewed buying interest fanned bidding.
COE prices for cars up to 1,600cc and 130bhp rose by 2.3 per cent to finish at $57,498, and that for cars above 1,600cc or 130bhp climbed 2.2 per cent to end at $62,140.
Premiums for Open COE, which can be used for any vehicle but ends up mainly for bigger cars, shot up by 5.4 per cent to close at $61,001.
It's not going to last. In the long term, more COEs will come and prices will drop again.
MR NEO NAM HENG, chairman of the Prime group of motor companies, on the rebound
Industry players said a sizeable drop in prices last month had drawn more people to showrooms. Car COE premiums had each fallen by more than $10,000 from June.
Said Motor Traders Association president Glenn Tan: "There's been a lot of buying interest since last month. But I believe that as long as the COE supply continues to grow, prices should trend downwards in the long run."
Mr Tan however, said the fall would be gradual and that a crash is unlikely in the near term: "I don't expect prices to halve by the end of the year."
Mr Neo Nam Heng, chairman of the Prime group of motor companies, said: "This is a normal rebound. After so many rounds of price drops, it is natural for buyers to be pulled to showrooms.
"But it's not going to last. In the long term, more COEs will come and prices will drop again."
Next year's COE quota is expected to hit 100,000 - up from around 70,000 this year.
Meanwhile, the commercial vehicle COE price fell by 5.7 per cent to close at a 13-month low of $46,501 yesterday. Dealers said this was primarily because the enhanced Early Turnover Scheme had just kicked in.
The scheme encourages businesses to replace old, polluting diesel vehicles with new ones at subsidised rates. Buyers who subscribe to the scheme also need not bid for a fresh COE. The premium for motorcycles dipped by 1.4 per cent to finish at a five-month low of $6,112.