Certificate of entitlement prices finished mostly higher in the latest tender, as the market anticipates a smaller supply of COEs.

The premium for cars up to 1,600cc and 130bhp inched up 1.3 per cent to $26,659, at the close of March's second bidding exercise yesterday.

COE prices for cars above 1,600cc or 130bhp ended at $39,401, a 6.6 per cent rise from $36,961 two weeks ago.

Prices for open category COEs - which can be used for any vehicle type except motorcycles but end up mostly for bigger cars - closed at $41,000. This is a 9 per cent increase from the $37,620 registered at the previous bidding exercise.

Singapore Vehicle Traders Association president Michael Lim said dealers are likely rushing to bid for COEs now, as they anticipate a smaller supply in the quarter of May to July, compared with the current February-April period.

The COE quota is revised quarterly and is determined largely by the number of vehicles deregistered in the preceding three months.

Mr Lim said: "The number of cars being scrapped in the past two months has fallen."

Data from the Land Transport Authority, for example, shows there were around 4,690 cars above 1,600cc or 130bhp that were deregistered in January and last month.

In the same period a year ago, more than 5,480 of these cars were taken off the road.

Yong Lee Seng Motor's managing director Raymond Tang believes more drivers are opting not to deregister their cars but to renew their COEs when they expire after 10 years. Motor traders also say there is a higher demand for cars above 1,600cc or 130bhp, compared with those of smaller capacities and lower horsepower.

Mr Tang noted that many of the popular car models are hybrids, such as the Honda Fit Hybrid, which, though regarded as a small car, exceeds the 130bhp criterion.

Meanwhile, COE prices for commercial vehicles increased by $11 to $27,021. Motorcycle premiums fell by 3.7 per cent to $3,469.