Certificate of Entitlement (COE) prices for cars continued to tumble at the latest tender exercise, with premiums for small cars hitting an eight-year low.
At the close of bidding yesterday afternoon, COE premiums for cars up to 1,600cc and 130bhp dropped by 6.4 per cent to $34,110 - the lowest since November 2010.
For cars above 1,600cc or 130bhp, COE prices tumbled from $36,000 to $33,900, falling by 5.8 per cent.
COE premiums for this category continue to remain at an eight-year low, surpassed only by March 2010's price of $26,389.
In the open category, which can be used for any vehicle type except motorcycles, COE premiums fell 7 per cent, from $37,000 to $34,400 - also maintaining at an eight-year low.
Industry players say the falling COE prices for cars are due to the Vehicular Emissions Scheme (VES) being tightened from July 1, adding a fifth pollutant of particulate matter into the measurement.
This will result in certain models of cars becoming more expensive, as they will attract surcharges starting from $10,000.
Mr Ron Lim, head of sales and marketing at Tan Chong Motors, said demand for COEs would have been higher earlier with dealers trying to sell off their vehicles affected by the VES.
But this is the last COE bidding exercise before July 1 and the prices now are more reflective of the current buying sentiment.
Mr Lim added: "With the impact of the VES coming into play and the dust settling, we will see if consumers will bite from here on."
Managing director of used-car dealer Yong Lee Seng Motor, Mr Raymond Tang, said dealers could also be holding off their bids, in the expectation that COE prices will further soften next month.
Mr Tang expects COE prices to either maintain at their current levels or move up in the next round.
Meanwhile, COE prices for motorcycles also dipped, from $7,001 to $6,889, a marginal drop of 1.6 per cent.
In the goods vehicles and buses segment, however, COE premiums advanced by 7 per cent, from $29,902 to $32,001.