Certificate of entitlement (COE) prices for cars tumbled at the latest tender yesterday as a larger supply of COEs kicked in, a day after the Government amended laws to keep a tighter rein on private-hire operators.
The COE premium for cars up to 1,600cc and 130bhp fell by 4.9 per cent to end at $48,401, while that for cars above 1,600cc or 130bhp ended even lower at $48,209, down by 8.7 per cent.
The price for Open COE, which can be used for any vehicle type but ends up mostly used for bigger cars, closed 7.7 per cent lower at $48,556.
Bidding for car COEs has been fuelled aggressively by the advent of private-hire players like Uber and Grab. Since their arrival in 2013, the rental and private-hire car population has trebled to more than 50,000 as at end-2016.
With tighter regulations expected, people will not find driving a private-hire car for a living, or to supplement their income, as attractive as before, said industry watchers.
Mr Neo Nam Heng, chairman of diversified motor group Prime, said: "Ten to 30 per cent of drivers will fail to secure a vocational licence. Also, some drivers will feel uncomfortable about having to display a decal on their cars."
Vocational licensing and tamper- evident decals are among requirements that the private-hire industry will have to meet by this year.
However, Mr Neo said the new rules and regulations were unlikely to have pulled the COE prices down. He said a bigger quota - 12 per cent more car COEs from this month to April - and weaker consumer sentiment on account of economic jitters were bigger reasons.
"The next thing to watch is interest rates," Mr Neo said, adding that a rate hike would translate to higher cost for motor firms and dampen buying further.
The COE price for commercial vehicles ended 4 per cent higher at $48,901, while the premium for motorcycles climbed 5.9 per cent to hit a five-month high of $6,412.