The number of motorists who renewed their vehicle certificate of entitlement (COE) plunged by 30 per cent in the second quarter, with the sharpest monthly fall in June.
This is the first significant pullback in three years, but motor traders are divided on whether it signals the end of a trend.
Car COE revalidations - which allow motorists to keep their wheels beyond 10 years by paying a prevailing quota premium (PQP) - were more than halved in May to 3,282.
In June, the number again contracted by more than half, to 1,141.
Motor traders attributed the sharp fall to a smaller population of cars approaching 10 years old. This in turn was a function of the number of new cars registered in 2009, nearly 30 per cent fewer than in 2008.
Mr Ron Lim, head of sales and marketing at Nissan agent Tan Chong Motor, said: "I suspect it could be a situation of many revalidations being brought forward in March and April, when PQP was low."
He said the market may have anticipated that PQP would rise with the shrinking COE supply. As it turned out, the August-October quota is about 17 per cent smaller. The June PQP - at about $42,900 for big cars and $30,500 for small cars - was nearly $11,000 higher than in January for bigger cars and $5,000 higher for smaller cars.
Mr Neo Nam Heng, chairman of diversified motor group Prime, said used-car dealers who have been buying up old vehicles, revalidating the COEs and putting them up for sale are holding back now.
"These dealers are not buying more cars when the PQP is so high," he said, but they will "come back to the market again" when their current stock of low-PQP cars run out.
Industry watchers reckon it is still too early to say if the trend of motorists keeping their cars beyond 10 years - which started to take off in 2015 - will continue.
They point out that on a monthly basis, revalidations in the first half of this year still far exceed the monthly figure of 2018 - a record year.
While the number may continue to trend downwards in the next few years on the back of fewer older cars - again a function of the cyclical new car market - it should pick up again from 2024.
Mr Neo has another hypothesis - that fewer people actually want to own cars now. He said that despite the recent increase in COE premiums, car prices are still relatively low, but "the market is very quiet". He cited the popular Honda Vezel, at around $90,000 today, is drawing fewer inquiries than when it was more than $100,000 two years ago.