Certificate of entitlement (COE) premiums ended mostly lower in the latest tender yesterday as buying sentiment remained weak.
The COE price for cars up to 1,600cc and 130bhp tumbled by 7.3 per cent to end at $28,000 - the second time since July that it has fallen below $30,000. The COE price for cars above 1,600cc or 130bhp fell by 2.2 per cent to close at $31,307.
The premium for Open COE, which can be used for any vehicle type except motorcycles but ends up mostly for cars, inched upwards by 0.6 per cent to end at $32,000.
Mr Neo Nam Heng, chairman of diversified motor group Prime, said: "Market sentiment has been very weak in the past several weeks."
He attributed this to several reasons, including looming economic uncertainty and the "dumping" of used cars by Uber's Lion City Rentals. He said the latter "has flooded the market with cars with zero mileage", and that has affected sales of new cars.
Mr Neo added that the new Vehicular Emissions Scheme - which metes out tax rebates or surcharges according to a car's emissions - has rendered many parallel imports unviable. This, in turn, pared down competition for COEs.
Lastly, he said, the Japanese yen has appreciated significantly, resulting in importers having thinner margins to bid for COEs.
Industry watchers expect the soft COE prices to whip up buying interest, although some quarters reckon that they will also encourage more people to revalidate the COE of their old cars for another five or 10 years.
The commercial vehicle COE premium was 0.4 per cent higher at $27,104, while the motorcycle premium continued to tumble. The two-wheeler COE shrank by 4 per cent to finish at $4,214 - nearly half its value in the first quarter.