Certificate of entitlement (COE) prices continued to slide, with the car premiums hitting their lowest in nearly a decade yesterday.
The premium for cars up to 1,600cc and 130bhp took the biggest tumble, falling by 26.7 per cent to $25,000.
The COE price for cars above 1,600cc or 130bhp dropped by 8.6 per cent to $31,000.
The premium for Open COEs, which can be used for any vehicle except motorcycles, but which is used mostly for cars, fell by 9.9 per cent to $31,001.
All the three premiums are now at their lowest since March 2010.
Industry players attribute the sizeable falls to an emission ruling that went into effect on Sunday. New cars are now measured for the particulate matter they produce, on top of carbon dioxide, carbon monoxide, hydrocarbons and nitrogen oxides.
Many models are not able to meet the new standard, deemed to be among the world's most stringent.
Mr Neo Nam Heng, chairman of diversified motor group Prime, had been predicting this outcome for months.
"A lot of models which previously qualified for tax rebates are now subject to tax surcharges, especially those brought in by parallel importers," he said.
For example, the Toyota Prius Alpha went from having a $10,000 rebate to a $20,000 surcharge, he said.
Popular cars such as the Toyota Sienta Hybrid and Honda Shuttle are similarly affected.
"Manufacturers will try to make their cars meet the standard," Mr Neo added. "Meanwhile, there will not be any big fluctuations to premiums in the next quarter or so."
Commercial vehicle COE premiums eased by 2.8 per cent to a 14-month low of $31,092. Motorcycle premiums fell by 5.4 per cent to a seven-month low of $6,514.
Volkswagen was the first to publish price reductions yesterday. VW models up to 1,600cc are now $6,000 cheaper, while those above 1,600cc are less costly by $3,000.