Certificate of entitlement (COE) prices ended mostly higher at the latest tender yesterday as the year-end sales race fuelled bidding.
COE prices for cars up to 1,600cc and 130bhp dipped 1.2 per cent to close at $67,089. For cars above 1,600cc or 130bhp, COE premiums finished 2.1 per cent higher to end at $74,389 - an eight-month high.
Prices of the Open COE, which can be used for any vehicle type but ends up mainly for bigger cars, rose 4.1 per cent to also hit an eight-month high of $76,904.
Commercial vehicle COE prices slid 7.7 per cent to end at $60,001, while motorbike premiums inched up 0.5 per cent to close at $4,210.
Mr Ron Lim, general manager of Nissan agent Tan Chong Motor, attributed the gravity-defying premiums to a last-ditch attempt by dealers to meet annual sales targets. Dealers were also trying to clear a sizeable backlog of orders.
So despite COE supply in the November to January quota period being double what it was a year ago, premiums remain high.
Industry watchers said dealers have also found ways around the car-financing curbs put in place last February. This has led to more consumers being able to afford a new car.
Fatter profit margins have also allowed dealers to bid more aggressively for COEs. For instance, the most recent list price of the popular Toyota Corolla is $124,888 - $13,100 less than it was 24 months ago, when the COE premium for the car was $25,000 lower.
Mr Lim said COE supply has to reach "a critical mass" before a meaningful price correction will take place. According to projections, this should happen from February, the start of the next quota period.
And for the first time in a long while, it will be a quota that is free from the clawback of COEs the Land Transport Authority oversupplied in earlier years.